June 8 (SeeNews) - The European Union (EU) plans to set up a regional economic area in the Western Balkans, upgrading the existing Central European Free Trade Agreement (CEFTA), in order to encourage private investments in the region, enlargement commissioner Johannes Hahn said on Thursday.
The EU plans to endorse the concept of Western Balkan regional economic area, upgrading CEFTA, at its Trieste summit, as an important milestone for the preparation of EU accession, Hahn said at a conference in Belgrade, as quoted in a statement by the European Commission (EC).
CEFTA is a trade agreement between non-EU countries, members of which currently are Albania, Bosnia and Herzegovina, Macedonia, Moldova, Montenegro, Serbia and Kosovo. Once a participating country joins the European Union (EU), its CEFTA membership ends.
The bloc has allocated 1.3 billion euro ($1.46 billion) worth of grants and aims to leverage up to 13.5 billion euro of investments from the public and private sector in key energy, environment and transport investments in the Western Balkans by 2020, Hahn said.
"What really matters is private investment. And private investment is still lagging far behind in the Western Balkans; especially cross-border investment is four times lower than in the EU," Hahn noted.
Across the Western Balkans, the boosting the rule of law is probably one of the most powerful levers to improve the business environment, as the informal economy reduces tax revenues, leads to unfair competition and negatively affects workers' skills as well as the quality of jobs, he added.
($ = 0.892021 euro)