Dirty Money Put in Construction Threaten Bid of WB towards EU Accession

European Union leaders are scheduled in the next few weeks to discuss once again advancing the long-stalled applications from Balkan states to join the bloc. But recent studies exploring the scale of money-laundering in the region are unlikely to assuage France and the Netherlands, which among other member states want to delay EU enlargement, say officials.

Albania, Serbia, North Macedonia and Montenegro are all EU candidates and have expressed frustration with their stalled applications. But opponents to EU enlargement are already seizing on a study suggesting that the real estate market in the Western Balkans is being used to launder proceeds from drugs trafficking and migrant smuggling, prompting soaring property prices in the region.

The Global Initiative Against Transnational Organized Crime, an international non-governmental organization headquartered in Geneva says illegal money is flowing into the real estate markets and the construction industries of the Western Balkans. “The dirty money being made and laundered in the region is perpetuating an ecosystem of crime and corruption,” said Kristina Amerhauser, one of the authors of a report the NGO published last month.

The authors say in their report, "Spot Prices: Analyzing flows of people, drugs and money in the Western Balkans," it is not possible “to put a concrete number on how much illicit money generated in the Western Balkans and abroad is actually laundered in the region,” but they estimate the range is between $2.2 billion and  $5.6 billion.

While that might look small compared to some much wealthier regions, they note “these numbers are remarkable, especially when put in perspective.” They add: “For example, in 2021, the budgets of the interior ministries of North Macedonia and Albania each amount to €168 million  [$200 million] ; the Kosovo police force has only €87 million [$106 million] at its disposal.”

While real estate prices dropped across the region as a whole in 2020 because of the pandemic, many places still showed significant gains since 2017. Last year, the Albanian economy contracted on average by 10.2 percent, but the real estate market continued to expand by 5.5 percent.

France has been a leading opponent of states of the Western Balkans joining the EU. French officials argue that the EU has suffered some bad experiences with the enlargement to Central and Eastern Europe countries as well as continual problems with corruption and the rule of law in countries such as Romania and Bulgaria.

Advocates of EU enlargement counter that being member states will help Balkan countries in their anti-corruption efforts.

And the pandemic and economic slump had little impact on the residential property market in the Albanian capital of Tirana, which saw prices double from 2017 to 2020. The hike is “largely driven by cash from organized crime and corruption which has been invested in construction and real estate.” /Excerpts taken from VOA- argumentum.al