" I have just returned from Prague where we held 16 hours of talks with the political leaders from Bosnia and Herzegovina trying to find solutions for the issues which are blocking this country´s progress on the European path.

20 years ago, countries of former Yugoslavia affected by conflict. Since then, important changes; common EU perspective played an important role in stabilising the region. The EU's engagement in the Balkans based on peace, values and reconciliation was one of the main contributing factors for the award of the Nobel Peace Prize to the EU last year.

We talk a lot about the transformative power of enlargement. One of the lessons learnt is that we have not only to see the bigger picture, but we also need to tackle also the issue how it is perceived by the public. The enlargement will not be successful if we only focus on the big picture and do not think about the views and concerns the citizens have in this regard and how they perceive enlargement.

Now facing tough economic and political situation. Within the EU, there are growing concerns about taking on new Member States – people focus on the negative aspects and overlook the benefits. At the same time, in the enlargement countries, there is a need to do more to deliver on reforms and meet the accession criteria.

Last year was very important in terms of visible results of enlargement:

Croatia has completed long hard road of reforms is now the 28th EU Member State. Shows that enlargement perspective is credible and that EU delivers when conditions are met.

Serbia and Kosovo reached an historic breakthrough with their agreement on normalisation of relations. EU processes – accession negotiations for Serbia and SAA negotiations with Kosovo – will support continued normalisation and reforms. Excellent example of the pull of the EU and of what can be achieved provided the political leaders show courage and vision.

Enlargement policy does not exist in a vacuum. Copenhagen criteria and EU values remain at its core, but it evolves, building on past experience. Lessons of previous enlargements clearly point to importance of addressing the fundamentals first. Crucial to demonstrate credibility and sustainability of process. Short cuts don't help the EU or the countries themselves. The process is more sophisticated and rigorous. Pace depends on countries' own merits in tackling difficult and deep reforms.

Rule of law remains at the heart of the process. New approach to rule of law being implemented. Need reforms (judiciary, fight against corruption and organised crime) to be deeply embedded. Implementation is key. You need to get under your skin – and not only at the end of the process. There is a need for track record of investigations, prosecutions and convictions.

Rule of law also important for economy. Economic crisis underlines need for all countries to strengthen their economic governance. Work on economic criteria and improve economic competiveness as early as possible.

Need to strengthen democratic institutions and ensure inclusive democratic processes. Need parliamentary/electoral reform, public administration reform (depoliticisation), and stronger civil society.

Need to strengthen fundamental rights, especially so that freedom of expression and rights of vulnerable groups (esp. Roma and LGBTI) are respected in practice not just in law.

Need to stimulate regional cooperation and renew efforts to overcome bilateral disputes and improve good neighbourly relations.

Focus on economy – strengthening functioning market economy – inspired by crisis and need and interest in WB of boosting economic performance. EU progress is good for business, growth and further reform.

I am more and more concerned about the growing difference between what we negotiate with the candidate countries and what is being negotiated in Brussel in terms of economic governance. We need to make sure that the candidates deliver not only on the rule of law. We need to ensure that they are as competitive as possible after they join the EU.

Political reforms and economic dynamism were mutually reinforcing. Difficult political reforms are easier to accomplish when the economy is in good shape.

Therefore, we need to work on economic criteria and improve economic competiveness as early as possible.

As Commission, encouraging countries:

To coordinate structural reforms (do more on education, research, develop infrastructure). Competitiveness demands engagement of many ministers and agencies.

Get public finances in order (which will pave way for budget support)

We will be measuring and rewarding real not "tick box" reform. To achieve this, the Commission is asking the countries to present annual comprehensive programmes which will outline how they plan to become functioning market economies and increase their competitiveness.

The Commission will engage in dialogue on these programmes and issue a number of country specific recommendations.

We will provide substantial technical assistance to the countries to help this process. We will work closely with IFIs to leverage substantial support for investment. Important role for IFIs planned under IPA2 (launch in 2014) and the Western Balkans Investment Framework.

Looking at what is to come next:

Albania - Prospect of candidate status has had the desired effect and conditions have been met (three key measures; June elections; good progress on organised crime and corruption). New government is clearly prioritising and delivering on organised crime and corruption. Commitment confirmed at High Level Dialogue on the Key Priorities launched few weeks ago. Granting candidate status would be also encouragement to continue efforts. I have been impressed by the progress made, by inclusiveness of reforms, and opposition playing constructive role. I am impressed by the way how the partners are tackling pour recommendation to fight corruption and organised crime. I hope the Member States will take that into a due consideration

The former Yugoslav Republic of Macedonia - Concerned about domestic political situation, tensions between government and opposition. No tangible results on the name issue within the process under UN auspices. Commission recommended opening of negotiations for the 5th time. Prospects for December Council discussions (and beyond) are gloomy.

Situation difficult in Bosnia and Herzegovina: lack of implementation of Sejdić-Finci ruling, of EU coordination mechanism and of SAA adaptation seriously hampering the country's progress on EU path.

Montenegro: Negotiations ongoing. Moving forward on rule of law in line with the new approach crucial.

Serbia: Date for IGC at the latest in January. Are we going to be ready in December? You bet.

Kosovo: SAA negotiations ongoing. Reform efforts key.

Conclusions:

It is time to be bold. We see our colleagues to deal with economic and fiscal vision. They are bold in defining the future face of the EU. The European Parliament is also a good platform to present ideas about political union. We need to participate in that discussions to make sure that whatever future European Union there will be, it is enlargement-friendly. It is about time to discuss how to make sure that enlargement continues hand in hand with the integration allowing those who want to go deeper, to go deeper."