The Western Balkan economies face many common problems including high unemployment, especially among youth, widespread corruption, and inefficient public sector management. All have seen economic impacts from the European crisis due to integrated markets. Unemployment is extremely high in many countries, especially long-term and youth unemployment. Public finances are poorly managed with unrealistically optimistic budgeting and growing debt. Reforms have been slow despite EU integration goals for the region. Youth unemployment needs to be addressed to prevent further issues related to visa liberalization.

1. Economy situation in the Western
Balkan Region , possibilities and needs
of agriculture employment of young
people

2. The Western Balkan Economies - Informal, with Huge Unemployment and
Unreforming
The countries from former Yugoslavia and Albania have a lot of common
problems, but also some differences, which are rather to be qualified as
insignificant. All of them suffer from extremely high unemployment,
especially among the young people, of widespread corruption, a growing
public sector, unjustified optimism when planning the budget and, in
general, of bad management of public finances. All of them are in one way
or another affected by the crisis in Europe because their markets are to a
lesser or greater extent integrated with the EU's single market. In general,
the Commission's document reports that all have maintained their political
consensus in terms of the fundamentals of the economic and fiscal policy,
excluding Bosnia and Herzegovina. But the wording is rather non-specific.

3. Short problems analysis
Macedonia focuses more on political issues
and ethnic issues than on reforms

Macedonia is one of the poorest in the region with an average income per capita, measured by
purchasing power standards, of 35% below the EU27 average (the analysis was made before Croatia
joined in the EU on July 1st, 2013). The analysis points out, however, that this level was maintained,
which means that in 2012 there was no change in the purchasing power of the Macedonians.

Macedonia has a relatively good macro economic picture. Although the EU reports that the external
imbalances increased in 2012, they still are 3.9% as the increase is from 3% in 2011. The reason
is mainly in the trade deficit which has reached 24 per cent of the GDP and is funded mainly by
credit because the net foreign direct investments declined in 2012 by two thirds to 1.4% of GDP.

4. Montenegro

Montenegro's fiscal policy is also very instable and, according to the report, the multilateral introduction of the euro shows
that the government has a very narrow space to conduct monetary policy. Montenegro's budget deficit remains high and
in 2012 it was 5.6% of GDP, which is well above the set target in the budget - 2.4%, revealing serious problems with
budgeting in Podgorica, as in all the other capitals in the Western Balkans. In an attempt to impose on itself fiscal discipline,
the Montenegrin government proposed in July the introduction of a fiscal rule which is valid for the EU, too - a 3% budget
deficit and no more than 60% public debt. The draft law, however, is not yet approved by Parliament. It envisages the
establishment of an independent fiscal council that will evaluate the government's economic and fiscal policies, as is set in
the fiscal compact, which most of the EU member states signed two years ago. The size of the government is huge,
compared to other countries in the region - 47% of GDP. It has grown from 45 per cent in 2011.

Montenegro's government debt is also worrying because in 2012 it increased to 54 per cent of the gross domestic product.
A huge burden for the budget are more than 30 companies with majority state-owned stakes. The process of privatisation,
however, is going very slowly. Montenegro's economy is undergoing a process of restructuring from production (mainly of
aluminium) toward energy. In general, the economy is shifting from production to services. Russia is the biggest investor in
the country, while the EU is responsible for 50% of the investments. The EU's share in Montenegro's trade marked a decline
in 2012 to 36.8% compared to 41.3 the previous year. Instead, the trade flows with the CEFTA countries are increasing.

5. Serbia - big and hesitating

This is the biggest economy in the region which also went through a recession in 2012, when it
shrank by 1.7%. Unemployment in Serbia, too, has reached record heights of 23.9% as here, too, the
youth and long-term unemployment are huge across the country. One of the main reasons the
Commission revealed is the clumsy labour legislation. The fiscal discipline is also quite unstable. In
the election year (2012), the government spending skyrocketed and entirely deleted the not very
bold previous efforts for fiscal consolidation. The deficit instead of the expected 4.25% reached
6.4% of GDP, but without taking into account the money for bank recapitalisations and called
guarantees. In 2013, the expectations, again, were far from reality. According to the Commission,
the main problem is not only bad budgetary planning, but also the inefficiency of spending and the
high spending on wages and pensions.

Another factor for the growing of spending and debt is that the state holds majority stakes in many
sectors like energy, transport and telecommunications. Serbia has a debt ceiling of 45% of GDP, but
it violated it when in 2012 the debt reached 60 per cent. As in all the other countries in the region, in
Serbia too, the banking sector is dominated by foreign banks. Here, too, there is significant growth
of non-performing loans - up to 19.9% in June 2013. The economy is dominated by services,
although the share of agriculture remains big. EU remains a major trade partner to Serbia in 2012
with 58.1% share of the overall export and 58.2% of the imports.

6. Albania awaiting the candidate status

Generally, the Albanian economy was sheltered from the recession, but the dynamics of growth
slowed down in 2012 to 1.6% of GDP which is a serious decline compared to 3.1% in 2011. The
country, however, has serious imbalances. The current account deficit, although declining, was
10.5% of GDP in 2012. In 2011 it was 13 percent. The unemployment, too, is high, although not as
much as in the above mentioned countries - 13%. In the first half of 2013, the number of
unemployed slightly declined to 12.8%, but the long-term unemployment covers two thirds of all
unemployed which reveals structural problems. The problem is, though, that statistics is very poor,
apart from the very large informal sector which prevents the more precise number of jobless
people.

The fiscal discipline is relatively strict in Albania where the budget deficit increased from 3% the
previous year to 3.4 per cent in 2012. The debt, however, is quite high and in 2012 reached 62.9% of
GDP, exceeding the 60% threshold, abolished in December 2012. In the banking sector the situation
is also worrying and quite telling for this is the level of non-performing loans - 24.4% in the second
quarter of 2013. In general, Albania's economy is services-oriented. The second important sector is
agriculture. The production base is not diversified, the problems with electricity supply and the size
of the informal economy remain the main challenges for the Albanian economic development. The
GDP per capita remained at 30% below the EU average in 2012.

7. Bosnia and Herzegovina - the biggest
challenge before the enlargement policy

The Dayton invention is the only exception in terms of national consensus for economic
development. "[...] despite some slight improvement, the consensus on economic and fiscal policy
essentials remains weak", is said in the Commission's report. In 2012, the Bosnian economy shrank by
1.1%, but in 2013 an improvement started. Bosnia, however, is among the countries that have
serious imbalances. The current account deficit in 2012 reached 9.5% of GDP and is funded mainly
by foreign borrowing, as the World Bank is the biggest creditor.

In terms of unemployment, Bosnia is not an exception from the general picture in the Western
Balkans with levels of 28.6% in 2012. Instead, the number of employed in the public sector is
growing. The management of the public finances in general is bad. The public debt is growing and
in the end of 2012 it was 44% of GDP. The business is having hard times to survive in the difficult
political environment and still needs registration in the two state entities - Republika Srpska and the
Bosnia and Herzegovina Federation. In the former, the registration of firms was significantly
reduced from 23 to 3 days and the price also dropped to 200 euros. But in the Federation, the
establishment of a company is much more complicated and expensive. The share of non-
performing loans is also high and growing. In the second quarter of 2013 they reached 14.3%.
Bosnia and Herzegovina's public sector is huge and inefficient, as many of the competences overlap
or are duplicated.

8. Kosovo - a young, dynamic and full of unemployment
country

Kosovo has the most dynamic economic growth than all the others in the region, but it felt the cold from
Europe's economic troubles, not very strongly though. From 4.4% the economic growth declined to 2.5% in 2012.
The country has gross domestic product per capita of 11% of the EU27 average. Unemployment is 35.1%, but
comparisons with previous periods cannot be made due to recently introduced changes in the methodology and
the high level of informal economy. Kosovo and Bosnia and Herzegovina - the two most difficult solutions from
the war in former Yugoslavia - have the biggest problems with statistical data and generally the analysing of the
main macro economic indicators.

The deepening of the analysis of the economies in the enlargement countries in the Western Balkans will
probably support the European Commission's and EU's efforts to prepare them and themselves for the next
enlargement wave. When will it be is too early to forecast, but it is certain that it will depend mainly on the efforts
of the candidate countries to fulfil the growingly more precise criteria and the assimilation of the lessons from
previous enlargements. Youth unemployment should be among the biggest concerns for the EU in the context of
the visa-free regime and also against the backdrop of the hysteria with the abolishment of labour restrictions for
Bulgarians and Romanians from January 1st. The conclusions in the same vein of the December EU summit
welcome the Commission's efforts to increase the dialogue on the economic governance with these countries.

In this regard, the Council will be discussing how exactly to improve the bilateral and multilateral dialogue with
them, including through cooperation with the major international financial institutions. The key, however, should
be money for reforms. Otherwise, it could hardly be expected the Union to open its doors again in the coming
decades, especially bearing in mind that the Union already has quite enough problems of its own that stemmed
from previous enlargements.

9. Europe- agriculture
The agricultural sector has some special characteristics that make it more
difficult, compared to other sectors, to know precisely how many people it
employs. Firstly, in most Member States agriculture is still dominated by
family farms, where family members provide labour input at different times of
the year. Secondly, many farmers and farm workers pursue agriculture as a
part-time activity and have other more or less important sources of income.
Thirdly, agriculture is characterized by seasonal labour peaks, where large
numbers of workers may be hired for relatively short periods. Finally,
statistical data sources with different methodologies and purposes reflect all
these situations differently, resulting in figures that may differ greatly from
one source to another.
This Brief presents the most recent data on agricultural employment in the
European Union to address the key question of the number of people
employed in agriculture and the main characteristics of this agricultural labour
force. It explores and compares the different Eurostat data sources for this
information: the Farm Structure Survey, the Economic Accounts for
Agriculture, the National and Regional Economic Accounts and the Labour
Force Survey, to identify the most appropriate sources.

10. How manu people work in agricututre in
Europe?

In 2010 there were 12 million farms in the European Union. Nonetheless, most data sources tend to

agree in saying that around 10 million persons1 are employed in agriculture, representing 5% of total

employment2

. On the other hand, the Farm Structure Survey (FSS) indicates that 25 million people

were regularly engaged in farm work in the EU during 2010.

These very different and somehow contradictory figures are explained by the special characteristics

of agricultural employment but also by divergences in scope, methodologies and definitions. In

particular, the FSS collects information about some categories of workers which are not included in

other employment data sources, mainly family and part-time workers.

Effectively, in most EU countries the bulk of farm work is carried out by the holders and their family

members (mainly their spouses): together, they account for 92.2% of those working on the farms, to

very similar shares (46.6% for the holders, 45.6% for their family members). Hired non-family

workers only represent 7.8% of those regularly working on the farms.

However, for many of the 25 million regularly working in agriculture, farm work only represents a

minor activity: according to the FSS, more than half of them (13.8 million persons) spent less than

25% of their working time on farm work. Agriculture was a full-time activity for only 14.3% of them,

being the main economic activity3

for a further 28.5% of the total (7.1 million persons)4

.

As a result, when converted into full-time equivalent jobs (called annual working units or AWU in

agriculture), these 25 million persons only represented 9.8 million AWU, which is close to the figures

provided by other data sources1 and can therefore be considered a good estimate of the total number

of people employed in agriculture in the EU.

11. Problems can be solved

In period of world crises, we have empty villages, the cities become to
small for the people, to much unemployment, and food deficit…

The possibilities which NEA suggests like solutions are in agriculture
reforms in the region.