The European Commission has set itself an ambitious deadline. In early November it announced that accession negotiations with Montenegro, Albania, Moldova and Ukraine could be wrapped up within two years—a timeline that would make previous enlargement rounds look positively leisurely.

A new study commissioned by Brussels itself, however, suggests this optimism may be premature. The Vienna Institute for International Economic Studies (wiiw) has taken a hard look at three candidates—Ukraine, Serbia and Montenegro—and found that, whilst membership is theoretically possible, the gap between rhetoric and reality remains uncomfortably wide.

The rationale for speed is geopolitical rather than economic. “Against the backdrop of increasing geopolitical competition between the major powers, the EU would be well advised to stabilise its immediate neighbourhood in the east and southeast through a rapid round of enlargement,” says Michael Landesmann, an economist at wiiw and co-author of the study. Translation: better to have Ukraine inside the tent than outside it, Russian tanks or no Russian tanks.

But geopolitical expediency has a habit of colliding with economic reality. The wiiw analysis compared the current state of Ukraine, Serbia and Montenegro with the situation in Romania, Bulgaria and Croatia before their accession, and found that all three suffer from significant economic and institutional shortcomings. More troubling still, the study calls for stricter measures than in previous enlargement rounds—a sign, perhaps, that earlier accessions were perhaps too lenient.

Ukraine’s oligarch problem

Ukraine faces the most dramatic challenges, and not merely because of ongoing Russian bombardment. The country’s structural weaknesses run deep. Foreign direct investment stands at the lowest level in the entire region—a reflection not just of security concerns but of endemic corruption and weak rule of law. “Despite its weak institutions and major shortcomings in terms of the rule of law and the fight against corruption, significant progress has been made,” says Richard Grieveson, deputy director of wiiw. “In these areas, Ukraine is comparable to Romania and Bulgaria at the beginning of their accession process and is therefore not a negative outlier.”

This is damning with faint praise. Romania and Bulgaria entered the EU in 2007 with serious governance problems. Some persist to this day. Ukraine’s competitive advantages lie in agriculture and forestry, food processing, metal production, IT services, and increasingly defence technology—particularly drones. Yet without foreign capital to build internationally competitive sectors with higher added value, these strengths remain underdeveloped.

The war has made matters worse. Since 2022, up to seven million people people—often young and highly qualified—have left Ukraine. The resulting labour shortage threatens post-war reconstruction before it has even begun. Meanwhile, the government runs an annual budget deficit exceeding 20 per cent of GDP, whilst public debt spirals upward. Olga Pindyuk, a Ukraine expert at wiiw, emphasises the urgency: “The Ukrainian government should work closely with EU countries to do everything possible to encourage as many people as possible to return and to offer them prospects.”

The study’s most pointed recommendation concerns Ukraine’s post-war governance. After martial law is lifted, wiiw calls for restoration of civilian public procurement and irreversible judicial reforms—measures explicitly designed to prevent “any resurgence of the oligarchs and the hijacking of the state by special interests”. It is a reminder that Ukraine’s EU ambitions rest not merely on beating Russia militarily, but on defeating its own kleptocratic traditions.

Serbia’s Vučić problem

Serbia presents a different puzzle. Its macroeconomic fundamentals look decent: public debt and budget deficits are stable, the trade deficit manageable, and exports now account for roughly 55 per cent of GDP. Growth has averaged a respectable three-four per cent annually. The country has successfully attracted foreign investment and integrated into European supply chains.

However, Serbia’s accession prospects are undermined by one man: President Aleksandar Vučić. “The biggest problem for Serbia on its path to EU membership is undoubtedly the low motivation on the part of its authoritarian president to implement the reforms required for accession,” says Branimir Jovanović, a Serbia expert at wiiw. Under Vučić’s rule, Serbia has declined across World Bank rankings for rule of law, governance and anti-corruption measures. Ongoing protests against corruption and nepotism suggest the population is ahead of its leadership on reform.

There is also the China question. Beijing has become Serbia’s largest foreign investor, accounting for roughly a third of all foreign direct investment—equivalent to all EU countries combined. As Brussels increasingly views China as a geostrategic rival, Serbia’s cosy relationship with Beijing could prove awkward. Chinese-backed infrastructure projects that looked pragmatic a decade ago now resemble potential liabilities.

Serbia also faces a looming demographic crisis. Between 2009 and 2023, the population shrank from 7.3 million to 6.6 million—a loss of 700,000 people to migration and low birth rates. Labour shortages loom. Innovation remains weak despite rising research spending, and roughly 20 per cent of the population lives in poverty.

Montenegro’s tourism trap

Montenegro, the smallest candidate at just 620,000 inhabitants, has paradoxically advanced furthest towards membership. It could realistically join within five years.

Again, however, there are problems, with the tiny Adriatic republic facing outsized challenges. Its economy depends heavily on tourism—a fragile foundation that the Covid-19 pandemic exposed brutally. Public debt stands at 124 per cent of GDP, the highest in the region. The country narrowly avoided default during the pandemic.

Shortcomings in rule of law, corruption, governance and administration remain significant. Montenegro’s progress has been impressive, but the final stretch requires reforms that may prove politically difficult. Tourism-dependent economies rarely reform themselves voluntarily.

Optimism misplaced

The wiiw study reveals an uncomfortable truth: the EU wants to expand quickly for geopolitical reasons, but the candidates are institutionally unprepared. Previous enlargements suggest that admitting countries before they have irreversibly embedded reforms leads to long-term problems. Delaying risks losing Ukraine to Russian influence and allowing the Western Balkans to drift further into China’s orbit.

Brussels has set itself an two-year timeline that assumes political will can overcome institutional deficits. The evidence suggests it is wildly optimistic. Ukraine must simultaneously rebuild from war, restructure its economy, eliminate corruption, reform its judiciary and convince millions of émigrés to return. Serbia must persuade an authoritarian president to relinquish power and pivot away from China. Montenegro must diversify its economy whilst managing crushing debt.

These are not challenges that dissolve on convenient timelines. The EU may discover that geopolitical urgency and institutional readiness operate on different clocks. Fast-tracking accession might stabilise the neighbourhood. Or it might import instability into the union itself. Previous experience with Romania and Bulgaria suggests the latter risk is not theoretical.

The Commission’s optimism is understandable. But as the wiiw analysis makes clear, wanting something urgently does not make it achievable quickly.

Photo: Dreamstime.