Croatia Joins the European Union: Implications for the Balkan Countries

On July 1, 2013 Croatia was all festivities, celebrating their induction as the 28th member of the European Union (EU). Joining the EU will provide Croatia with more legal stability, a larger market for their goods, and a projected $18 billion earmark between 2014 and 2020. While this ensures great things for the Croatian economy, we cannot forget about the implications, good or bad, on the relationship between Croatia and the other Balkan Countries.

Prior to becoming part of the European Union, Croatia was a member of the Central Europe Free Trade Agreement (CEFTA). Besides trade with the European Union, Croatia’s largest trading partner is Bosnia and Herzegovina, one of the current members of the CEFTA. With Croatia now being a part of the EU, trade between the Balkan countries has now become more challenging. Croatian brands dominated in the CEFTA market, but with the newly imposed tariffs on their trade, these products are expected to become more expensive on the CEFTA market. While a lot of people are hearing the great news of the new 500 million consumers Croatia will have in the EU, they are giving up an already loyal customer base of 27 million. This could be a harsh blow to the Croatian economy because in the European Union their products are going to be unfamiliar, and less demanded compared to the established brands of the EU countries.  

There is however a positive side for other Balkan countries. This comes from the possible expanded market for Balkan countries and hope at some point to also be included in the European Union like Croatia. Some of the Balkan countries, including Macedonia, are looking at this change from an optimistic view, seeing this as a chance to integrate products into the European market. There is a lot of opportunity to find a demand for their products within the 500 million consumers in the European market; this could add a lot of extra profits for some of the CEFTA countries. John O’Brennan, the Director of European Studies for Project Syndicate, discusses how some of the outside countries view the likelihood of joining the EU in the future. While the European Union has complicated and slowed down the process, the western Balkan countries are still optimistic that one day it will be their turn to become a member of the European Union, following in the footsteps of their neighboring country, Croatia. What do you think the outlook for Croatia is, now that it is part of the European Union?  Also, how will this impact other countries on the waiting list to become a member of the European Union?