Six Western Balkan states to create regional economic area with EBRD's help

BELGRADE (Reuters) - Six Western Balkan countries are set to form a regional economic area, getting rid of non-tariff trade barriers and harmonizing laws in order to attract more investment, the European Bank of Reconstruction and Development said on Wednesday.

Albania, Bosnia, Kosovo, Macedonia, Montenegro and Serbia, all hoping to join the European Union, will launch the project at a meeting with EU officials and financial institutions next week in Trieste, EBRD Vice President Pierre Heilbronn said.

The aim is to create a single market of 20 million people with support from the EBRD, which has so far invested 10 billion euros ($11 billion) in the region.

Heilbronn said removing non-tariff trade barriers would be a first step in an initiative the EBRD and its stakeholders hope will re-engage Balkan states unnerved by the EU’s fading enthusiasm for enlargement and exposed to Russia’s growing influence.

When asked what would was necessary to make the scheme work, he said: “To have as little as political interference as possible, to be as pragmatic and as practical as you can be at the same time you need ownership by the government ... and EU presence is important.”

“Investors we meet every day have competing choices for their investment, they look at Asia ... and in the Western Balkans they see small countries with different rules,” Heilbronn said by phone.

“This region is very important for Europe,” he said.

However, not all Western Balkan countries are wholly supportive of the idea.

Kosovo fears being roped back into a Serbian-dominated union of the kind it fought to leave. Others worry it will only slow their accession to the EU, or worse still replace it.

Editing by Louise Ireland