The Balkans: How to stabilize the 'powder keg' of Europe

For decades, the Balkans have been considered Europe’s trouble spot – a region marred by ethnic conflicts, political instability and economic underdevelopment.

Western engagement has largely focused on Serbia-Kosovo relations and the long-stalled accession process of the European Union (EU). However, the geopolitical and economic importance of Southeastern Europe’s dynamics extends far beyond Brussels’ policy frameworks.

Regional players could instead lead by leveraging their historical, economic and cultural ties to make them credible intermediaries between the Balkans and the West. For example, Czechia, Romania and Greece can act as stabilizers, advocates and economic engines for the region.

Far from being a geopolitical backwater, Southeastern Europe is a critical energy and security corridor linking Europe with the Middle East, North Africa and the Caucasus. The region is also a key transit hub for energy pipelines, trade routes and military operations.

Energy infrastructure such as the Southern Gas Corridor and the Gas Interconnector Greece-Bulgaria help reduce European reliance on Russian gas. Meanwhile, the North Atlantic Treaty Organization (NATO) bases across the Balkans and ports such as Piraeus, Constanza and Rijeka reinforce Western strategic influence. The region also manages migration flows away from Europe.

Economically, Southeastern Europe has faced significant challenges, particularly following the 2008 financial crisis, which led to a period of stagnation. However, the region has shown resilience.

Serbia, for instance, attracted foreign direct investment in sectors such as automotive, IT and telecommunications. Serbia’s machinery sector has also seen substantial investments from global companies such as Fiat and Bosch, which have fueled growth and positioned the country as a key player in manufacturing.

Kosovo’s developing economy offers mining, agriculture and renewable energy potential, positioning itself as an emerging market with untapped resources.

The region’s strategic energy corridors and role as a trade and logistics hub further enhance its economic significance. The Port of Thessaloniki and the Danube River connect Central and Eastern Europe with global markets. The ongoing development of transportation networks, such as the Pan-European Corridors IV, VII and X, linking Western and Eastern Europe, underlines the region’s growing importance as a transit and trade hub.

These infrastructure projects also represent opportunities for cooperation, potentially fostering more integrated economic policies and reducing longstanding rivalries.

Despite signs of economic resilience, the younger, educated population has been leaving in large numbers, seeking better opportunities in Western and Northern Europe, with Germany being a prime destination.

This exodus is driven by limited job prospects, lower wages and concerns about political instability at home, weakening economic potential and the region’s ability to innovate and address structural challenges. It also exacerbates the gap between Southeastern Europe and more prosperous parts of the continent.

Resolving this brain drain is crucial for ensuring sustainable economic growth and retaining the talent needed for development.

Western engagement with the Balkans has long been shaped by EU accession negotiations, which have become slow, bureaucratic and detached from reality.

The process has stalled for years, creating frustration and pushing some countries – e.g. Serbia – toward alternative partners, including Russia and China.

The EU’s biggest failure in the Balkans is not opposition but neglect. Serbia-Kosovo negotiations have reached a dead end, dominated by domestic political grandstanding rather than meaningful diplomacy. Meanwhile, Russia and China are exploiting the vacuum, using investment, media influence and political partnerships to gain leverage.

This is where regional players such as Czechia or Romania can step in. These countries have political credibility in Brussels and the Balkans, economic interest in regional stability and a shared historical experience with transition economies and EU integration.

By lobbying within the EU for more flexible engagement, facilitating investment and offering diplomatic mediation, they can push the region forward where larger powers have failed.

The West’s response to Russians and Chinese should not be defensive or reactive but offer an alternative vision. Western investment in strategic sectors – defence, energy, infrastructure – counters Russian leverage.

France’s sale of Rafale jets to Croatia and Serbia strengthens military ties. Lithium mining projects in Serbia position the Balkans as a key player in Europe’s green energy transition. Russia’s power in the region is not inevitable. It thrives only when the West is passive.

The most effective response to Balkan instability is not top-down management from Brussels but engagement from trusted regional actors. Local players are uniquely positioned to drive economic development, political stability and EU integration.

Czechia has a strong diplomatic presence and a good reputation in Bosnia and Moldova. Croatia understands Balkan challenges firsthand and serves as a model for post-war EU integration. Romania is becoming an important military and energy hub in NATO and Black Sea security. Greece is crucial in regional trade, energy supply and maritime security.

These countries do not carry the historical baggage of larger European powers and can push for reforms without being seen as neo-colonial actors. Their economic strength, diplomatic leverage and EU membership make them well-placed to engage with their Balkan neighbours in ways that larger powers cannot.

The West has spent too much time viewing the Balkans as a problem to be managed. It is time to recognize the region’s strategic value and invest accordingly. The Balkans can be an engine of growth, security and political integration for Europe by shifting the focus from passive stability to active engagement.

The EU must rethink its enlargement process, Western investment must compete with Russian and Chinese influence and regional players must take the lead where Brussels has failed. If properly engaged, the Balkans are not a liability to Europe – they are part of the solution.