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Geoeconomics, Albania most connected to the EU in the region, but there are challenges

2025-10-07 07:18:36, Ekonomi CNA

Geoeconomics, Albania most connected to the EU in the region, but there are

Albania's economy has stronger ties to the EU than other Western Balkan countries, according to the Geoeconomic Connectivity Index published by the Vienna Institute for International Economic Studies.

The study estimates that Albania has the strongest ties with the EU compared to most other countries such as Bosnia, Serbia, North Macedonia, Montenegro – while accurate data was missing for Kosovo.
The report also highlights that China has strengthened trade ties with Albania and other countries in the region. For example, in 2023, for Albania, China was among the countries with the highest trade growth. From Albania's perspective, this presents a challenge, as the depth of ties with the EU must be maintained in order not to be influenced by Chinese strategies.

The report shows that while for a period the EU held a clear advantage in trade (imports, exports, trade relations) in the Balkans, a downward trend has been observed since 2021. Albania, although relatively well connected to the EU, may face challenges in maintaining its share of trade with the Union.

While the EU remains the main investor, including in Albania, the report highlights that its role in new investments (greenfield FDI) has weakened after 2021.
This means that Albania may not attract enough new European capital, compared to investments coming from China or other actors, which has consequences for infrastructural and technological development and regional competitiveness.

In terms of policy and regulatory approximation – political, monetary, fiscal synchronisation and legal convergence – the EU has remained dominant in the region. For Albania, this implies a strategic importance for harmonising laws, standards and regulatory mechanisms with the EU, in order to maintain integration and the benefits from trade and investment agreements.

The report suggests that when EU ties with the region falter, countries like China can exploit the gaps left. Strengthening policies that encourage European investment (not just trade), especially in strategic sectors such as infrastructure, technology and energy, is recommended by the Vienna experts.
Also, increasing the competitiveness of Albanian firms in European markets is essential to maintain and expand trade exposure with the EU.

The report suggests careful monitoring of strategic contracts or infrastructure projects coming from outside the EU, to ensure that they do not create harmful dependencies and do not harm the national interest./ Monitor.al