European Union leaders will meet in the coming weeks to discuss once again the stalled aspirations of Balkan countries to join the bloc.
But the results of several recent studies, which address the extent of money laundering in the region, are unlikely to convince France and the Netherlands, which along with several other member states want to delay EU enlargement, officials say.
Albania, Serbia, Northern Macedonia and Montenegro are EU candidate countries. They have expressed disappointment over the blocking of their membership applications. But opponents of EU enlargement are using a study that suggests the real estate market in the Western Balkans is being used to launder money from drug and migrant trafficking, boosting property prices in the region.
The Global Initiative Against Organized Crime, a Geneva-based international non-governmental organization, says dirty money is being pumped into real estate markets and the construction industry in the Western Balkans.
“The dirty money being earned and laundered in the region is strengthening an ecosystem of crime and corruption.” said Kristina Amerhauser, one of the authors of the report published last month by the organization.
In their report “Current Prices: An Analysis of the Flow of People, Drugs and Money in the Western Balkans”, the authors say that it is impossible to give a concrete figure on how much dirty money earned in the Western Balkans and abroad has been laundered in real in the region ”, but they estimate the figures range between $ 2.2 billion and $ 5.6 billion.
While the amount of money may seem small compared to some much richer regions, the researchers point out that “these amounts are extraordinary, especially when put in perspective.”
“For example, in 2021, the budgets of the Ministries of Interior of Northern Macedonia and Albania amount to 168 million euros each ($ 200 million); The Kosovo Police budget is only 87 million euros ($ 106 million). ”
Real estate
Large sums of dirty money are being thrown at property markets across the region “while prices are being artificially raised by criminals who want to launder their money there”.
As real estate prices fell across the region during 2020 due to the pandemic, many countries marked significant increases since 2017.
Last year, the Albanian economy shrank by an average of 10.2%, but the real estate market continued to expand by 5.5%.
The economic crisis caused by the pandemic had little impact on the market of houses or apartments in the Albanian capital. In Tirana from 2017 to 2020 prices doubled. The growth was driven “mainly by cash investments in construction and real estate by organized crime and the corrupt.”
Also in Serbia, the real estate industry recorded an extremely high and unexplained growth between 2018 and 2020. The construction industry continued to expand despite last year’s pandemic and the contraction of the economy as a whole.
reaction
Northern Macedonia has launched several money laundering investigations involving real estate and major infrastructure projects, including an investigation into former Prime Minister Nikola Gruevski and his business associates.
Major public infrastructure projects have attracted the attention of anti-corruption activists.
“Respecting European standards has proven to be a special challenge for the Western Balkan countries in recent years when it comes to major projects in areas such as infrastructure and energy.” says Marko Pankovski of the Societas Civilis Institute for Democracy in Skopje.
In an article on the European Western Balkans portal, Mr. Pankovski adds that, “Despite the efforts of civil society, the ruling parties seem determined not to make the contracts of these projects completely transparent and to be subject to the control of independent institutions.” . “It is not difficult to understand what is the main reason for non-compliance with the standards, the ruling parties make sure that the money ends up in the pockets of their collaborators, which often causes prices to swell.”
France has been one of the main opponents of the membership of the Western Balkan countries in the European Union.
French officials argue that the EU has had some bad enlargement experiences with Central and Eastern European countries as well as ongoing problems with corruption and the rule of law in countries such as Romania and Bulgaria.
They say this happened after the EU membership of those countries that some officials call “unprepared” was allowed. They fear that the countries of the Western Balkans have turned into states captured by corrupt politicians and linked to organized crime.
Supporters of EU enlargement argue that membership in the bloc will help Balkan countries in their anti-corruption efforts.
In 2019, after French President Emmanuel Macron vetoed, European Council President Charles Michel wrote in revolt on Twitter, “I would send a message to our Macedonian and Albanian friends: do not give up! You did your part and we did not. I have no doubt that you will become a full member of the European Union. ”
The then president of the European Commission, Jean-Claude Juncker, said the stalemate in membership talks was “a major historic mistake”. / VOA /
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