The Balkans in the New European Economic Space: Problems of Adjustment and Policies of Development

Europe is undergoing simultaneous processes of integration and systemic transformation. Within this process, the Balkan region can be seen as being on the periphery of both processes. On the one hand, the process of economic transformation is both slower and less deep in the Balkan region, and also, consequently, less successful than it is in transition economies located nearer to the center of Europe. On the other hand, the Balkan region is also on the periphery ofEurope inphysicalterms,andthese two forms of marginalization are functionally related. This article examines the nature of this interrelationship and proposes a number of policy measures that can be implemented by the Balkan countries and by the European Union that could address both the physical and the economic marginalization of the Balkan region.