Significance: The European Commission has today presented its annual progress report on aspiring European Union (EU) member states.

Implications: As in past years, the report is a mixed bag. Whereas some countries (such as Montenegro) have moved closer to realising their EU ambitions, others (such as Turkey) have been subjected to a barrage of criticism.

Outlook: The annual progress report is an important gauge of the EU's thinking on aspiring member states, while it also provides a road map for relations in the coming year. However, with familiar themes such as corruption and judicial reform dominating the report, questions are inevitably raised about the ability of the bloc to prompt domestic change in sovereign nations.

In a much-anticipated announcement, European Union (EU) enlargement commissioner Stefan Füle today presented the European Commission's annual progress report on applicants looking to join the 27-member bloc. The report covers candidate countries Croatia, Former Yugoslav Republic (FYR) Macedonia, Iceland, and Turkey, as well as the five potential candidate countries—Albania, Bosnia and Herzegovina, Montenegro, Serbia, and Kosovo. Füle stressed that through the reports the bloc was looking to strike a balance between vigorously applying entry criteria and offering aspiring member states the "tangible" prospect of accession. The winner of this year's report round appears to be Montenegro, for which the Commission recommends opening EU membership negotiations. In contrast, Turkey is once again the biggest loser, with little change to the status of the country's 13-year candidacy. Croatia and Iceland are once again held up as examples, while Bosnia, Serbia, and FYR Macedonia are identified as laggards in the reform process. Reflecting conclusions drawn in previous years, the Commission is only partially satisfied with the record of the countries aspiring to become bloc members.

A Country Breakdown

• Albania: Disappointingly for Albania, the Commission has failed to recommend candidate status for the country, citing the country's ongoing political crisis as the major factor in the delay. Füle was unapologetic, stating that Albania needs to overcome the political deadlock that has engulfed the country since June 2009 and that the bloc has already given the country 12 clear priorities that need to be fulfilled before a date for the start of accession talks can be set. At the core of these demands is the need to strengthen Albania's democratic institutions and legislative processes.

• Bosnia and Herzegovina: Bosnia and Herzegovina has been criticised for its lack of general progress this year, with the Commission condemning the lack of forward momentum in political and economic reform. The report stresses the country's poor governance and the need for politicians to abandon the nationalist rhetoric that intensified in the run-up to the 3 October 2010 election. The report also states that the country is no closer to fulfilling the conditions for the closure of the international Office of the High Representative (OHR), a body that is increasingly opposed by Bosnian-Serb politicians as a form of colonialism-"lite". Füle stressed the need for Bosnia to form a government rapidly in the post-election period, one that would have the authority and commitment to push through EU-mandated constitutional reforms, as well as pursuing judicial restructuring and intensifying the fight against corruption. In addition, the report criticises Bosnia for its "fragmented and rigid" labour market conditions and the lengthy delays in the privatisation process.

• Croatia: As was widely expected, Croatia has been held up as an example of a functioning democracy making the final preparations for EU membership. The report fails to set a firm date for Croatia's accession but does state that the country is in the "final phase" of negotiations. To date, Croatia has closed negotiations on 25 of the 35 chapters. Despite the overall positive nature of the report, the Commission does highlight the need for Croatia to step up its judicial reform and maintain the current pace of fighting corruption and organised crime. The report also praises Croatia's post-crisis economic recovery programme, while highlighting that growth this year is likely to be sluggish.

• FYR Macedonia: The same issue as last year features strongly in the report once again, namely FYR Macedonia's ongoing name dispute with Greece. The report recommends that FYR Macedonia start accession talks as soon as the name dispute is resolved. Despite receiving a recommendation from the Commission for the start of accession talks in the 2009 report, there has been virtually no progress as a result of the blockade imposed by Greece, which is insisting that the name issue be resolved first. Although the Commission continues to recommend the start of accession talks, it does state that FYR Macedonia needs to step up judicial and public-sector reforms and encourage greater political dialogue and media freedom. The report highlights FYR Macedonia's lack of progress in clamping down on political and economic corruption.

• Iceland: In its first progress report since applying for EU membership in July 2009, Iceland receives an overall positive assessment. The positive report was widely expected, given that 75% of the country's laws are already harmonised with the bloc thanks to its membership of the European Economic Area (EEA) and given that the country has a functioning democratic system. The report does, however, highlight that Iceland needs to take action to harmonise its laws with the bloc in the areas of fisheries, agriculture and rural development, environment, free movement of capital, and financial services. The report also indicates that the island economy must focus on bringing about an economic recovery in order to be able to deal with the competitive pressures and market forces present in the EU. Iceland is praised nonetheless for acting on Commission recommendations to strengthen the independence of the judiciary, as well as fundamental rights.

• Kosovo: The report for Kosovo indicates that progress has been made over the past year. However, any EU future remains somewhat dubious, given ongoing divisions within the bloc over recognising Europe's newest state. The Commission has pledged to start talks with Kosovo in the near future on visa liberalisation, an area of concern for the local government given that it is now the only country in the Western Balkans not given the privilege of visa-free travel to the EU's passport-free Schengen zone. The report highlights ongoing concerns over implementation of the rule of law, freedom of expression, and corruption, declaring that there is a lack of political will to address these issues.

• Montenegro: Seen as the overall winner of this year's assessment process, the EU has recommended that Montenegro be granted candidate status, although no date has been set for the start of accession talks. Füle underscored that the country needs to fulfil seven priorities that it has been set in order to qualify for a start date. Amid the positive assessment, the Commission has raised the need to strengthen democratic institutions and the rule of law, specifically to overcome politicisation of the judiciary, as well as the provisions of a functioning market economy.

• Serbia: Serbia has been criticised for failing to live up to the Commission's expectations and for failing to implement critical reforms. Specifically, the report highlights the lack of judicial reform and progress in the battle against corruption and organised crime, as well as the country's ongoing problems in the formation of a functioning market economy, delays in the privatisation process, and excessive bureaucratic obstacles for businesses. In a repeat of a familiar theme, the Commission underlines the need for Serbia to engage in full co-operation with the International Criminal Tribunal for the former Yugoslavia (ICTY), although it does state that there has been some improvement in the level of co-operation. The report also calls on Serbia to improve technical co-operation with Kosovo and strengthen minority protection in the country. The one positive area of assessment was Serbia's efforts at improving regional relations, which have been deemed successful. The Commission will issue a recommendation on Serbia's application for candidate status in 2011.

• Turkey: Despite having started accession talks on the same day as Croatia, Turkey's accession bid is proving fraught with obstacles. The report emphasises that Turkey's EU bid has over the last year come to a virtual halt because of complications over the Cyprus issue. Eighteen of the 35 policy chapters have been blocked by France and Cyprus over political issues, while only one of the 13 chapters that have so far been opened has been closed. The Commission criticises Turkey for failing to open up its ports to Cypriot vessels and planes, pointing to this as one of the major factors in the stalled relations. However, Turkey has rejected this, stating that it will open its ports only once the EU opens direct trade with the Turkish Republic of Northern Cyprus (TRNC). The Commission does praise Turkey for amending its constitution but highlights that more changes are required, specifically on parliamentary representativeness and minority representation. In addition, Turkey has been criticised for frequently limiting the freedom of expression. In an attempt to reach out to Turkey, Füle highlighted the importance of Turkey for the EU, declaring that the country's accession would strengthen the bloc's weight in world affairs.

Outlook and Implications

The 2010 progress reports have once again seized on familiar themes in the long and winding road of EU accession. As expected, the Balkan countries and Turkey have not fared well in dealing with corruption, organised crime, and judicial reform. The EU has attempted to strike a positive note with its report, underlining the "tangible" prospect of membership repeatedly in a bid to retain political momentum among the aspiring member states. This, however, is unlikely to work with all aspiring states, with a number of countries struggling to maintain popular support for the tough reforms needed as part of the accession process. Albania and Bosnia are too consumed with internal political troubles to truly focus on their EU aspirations; FYR Macedonia's bid is going nowhere fast as a result of the bullying behaviour of Greece; while the differences between Turkey and the EU over Cyprus are unlikely to be resolved quickly or easily. At the same time, support for membership among the Turkish and Icelandic populations is waning fast; for Icelanders the prospect of giving up sovereignty over key policies such as fisheries could simply prove too much. Croatia and Montenegro are looking like the only real short-term candidates from the Western Balkans, while Croatia and Iceland are realistically the only countries tangibly close to joining the EU. The EU should be able to absorb these countries in the foreseeable future without too much difficulty. However, this is dependent on the states maintaining the pace of reforms—something that has in the past proven surprisingly difficult for the Balkan nations.