Massive internal trade barriers and security so fragmented you’re at the whim of your larger neighbors?
Every jurisdiction needs to limit immigration more (which EU's dispersed jurisdictions make impossible, by statute) before any one country can tackle any of their other lacks/disputes. The current EU setup is the inverse of USA's, where the feds technically regulate most immigration issues (instead of EU's individual memberstates having most power), but not all.
Balkanisation refers to fences within one’s borders. It’s fragmentation that leads to less wealth, less security and eventually a loss of sovereignty to a powerful neighbor who notices.
Looking at it from the Slovene POV (which ultimately benefited from the dissolution of Yogoslavia, occurring within my/most lifetime), local industries/GDP benefitted greatly.
Currently, the rest of ex-Yugoslavia countries don't seem to do as well as Slovenia, and the main difference is date of joining the EU...