Thewesternbalkans
EU-Serbia relations
Serbia is a part of the European Neighborhood policy and Enlargement negotiations. The status of Serbia is candidate country. Serbia opened EU accession negotiations in January 2014 and has embraced the goal of EU membership as its top strategic priority.
Serbia – along with the other Western Balkans countries – was identified as a potential candidate for EU membership during the Thessaloniki European Council summit in 2003. In 2008, a European partnership for Serbia was adopted, setting out priorities for the country’s membership application, and in 2009 Serbia formally applied. In March 2012 Serbia was granted EU candidate status.
In September 2013 a Stabilisation and Association Agreement between the EU and Serbia entered into force.
In line with the decision of the European Council in June 2013 to open accession negotiations with Serbia, the Council adopted in December 2013 the negotiating framework and agreed to hold the 1st Intergovernmental Conference with Serbia in January 2014.
So far, 22 out of 35 chapters have been opened (including all chapters under cluster 1 on the fundamentals of the process and cluster 4 on Green agenda and sustainable connectivity), two of which are provisionally closed.
Trade relations. During 2022 year the EU exports to Serbia were 24,480 million Euros and the imports from Serbia were 18,188 million Euros. The total trade was 42,668 million Euros. Individual EU member states traditionally top the list of Serbia’s most important trade partners in goods, notably Germany, Italy, Hungary and Romania. Serbia exported almost 13% of total exports to Germany alone and another 8.5% to Italy in 2022.
Investments. Under the EIP for Serbia, the EU has already mobilised €5.7 billion in investments, out of which €1.1 billion in grants. The EIP flagship projects in public sector for Serbia, endorsed between 2020 and 2023, support sustainable transport, clean energy, environment and climate, digital infrastructure and human capital.
So far, Serbia has received over 3.7 billion euros in donations from the European Union: to strengthen the rule of law, undertake administration reforms, foster environmental protection etc. Through the Instrument for Pre-accession Assistance (IPA), Serbia can receive over 200 million euros per year. By using that money, many things are built among others – roads and bridges, as well as new landfills in several municipalities in Serbia. One of the main purposes of the IPA instrument is to build administrative capacities for accession funds intended for EU member states through the Cohesion Policy of the European Union.
From 2000 untill now, EU support to the transport sector in Serbia has exceeded 420 million euro in grants. The Union is also the biggest donor in the energy sector, in which it has invested over 830 million euros so far.
According to the data of the Delegation of the European Union, the EU invested about 2.8 billion euros in grants and another 6.5 billion euros in soft financing of about 300 projects, all that in the period between 2007 and 2020.
Through the IPARD programme (Instrument for Pre-accession Assistance for Rural Development), a special part of the IPA funds, additional 230 million euros that have been set aside for farmers by 2020 remained mostly unspent.
Serbia also receives an indirect aid through EU programmes, such as “Erasmus Mundus” or “Tempus” Fondation, funds for support programmes for civil society and refugees within the Regional Housing Programme and so forth.
The war in Ukraine intensified the questioning of the use of common funds. The European Parliament has recently adopted a resolution on a new EU enlargement strategy. It calls for a reconsideration of “any bilateral and EU funds for Serbia that would benefit the Serbian authorities, in particular, any pertaining to projects financed under the Western Balkan Economic and Investment Plan, in order to ensure that all EU expenditure is fully in line with the EU’s strategic goals and interests“ having regard to a compliancy with The Common Foreign and Security Policy. Although EP resolutions are not obligatory, they present probably the last warning that Brussels is about to change its attitude towards Belgrade if it remains neutral on the war in Ukraine.
The carrot-and-stick approach is nothing new. In May the German Bundestag suggested to withhold funding of candidate countries which refuse to impose sanctions on Russia. There’s only one on the list – Serbia.
Serbia’s approach to bilateral and multilateral economic and political relations.
The country’s experience since the Cold War shows that balancing the interests of major economic, political and military players in the international arena brings success. Politically, Serbia seeks and maintains good relations with the USA, negotiates for EU membership, participates in the NATO program ” Partnership for Peace”, maintains good relations with Turkey, and tries to be a loyal partner with Russia and China.
In the economic field Serbia has been a Party to the Central European Free Trade Agreement (CEFTA) since December 2006. CEFTA is a regional free-trade agreement composed of the following members (which, together, have a total population of nearly 20 million): Albania, Bosnia and Herzegovina, Northern Macedonia, Moldova, Montenegro, Serbia, and UNMIK/Kosovo.
Goods originating from Serbia and exported to the EU customs area are subject to preferential customs regimes. Serbia’s Stabilization and Association Agreement with the EU and Interim Agreement on Trade and Trade-Related Issues opened the door for Serbia to begin systemic reforms and harmonize its legislation with EU standards. Under this agreement, Serbia has abolished tariffs on most goods imported from the EU.
In 2023 the value of overall Serbia’s exports amounted to EUR 28631.8 million, which was 3.7% increase, compared to the same period last year. The value of imports amounted to EUR 36859.5 million, which was 5.5% decrease when compared to the same period last year. Trade relations with the EU amounted to 60% of overall Serbia’s trade.
Serbia has concluded bilateral free-trade agreements with the Russian Federation, Belarus, Kazakhstan, Turkey, and the European Free Trade Association (Norway, Switzerland, Iceland, and Liechtenstein). Serbia is also a beneficiary of Japan’s GSP (preferential duties on importation to Japan).
In October 2019, Serbia signed a Free Trade Agreement with the Eurasian Economic Union (EAEU), which came into force in July 2021, replacing Serbia’s bilateral FTAs with EAEU member states Russia, Belarus, and Kazakhstan. Serbia, together with North Macedonia and Albania, is a member of the Open Balkan initiative, which is intended to provide greater opportunities for trade and student exchanges and encourage EU integration in the member states, inter alia. This economic zone prepares the countries to become members of the EU. On July 29, 2021, three member countries signed an agreement to open their national borders to each other’s citizens and products on January 1, 2023, without restrictions.
Last year Serbia signed Free Trade Agreement with China and confirmed its balances approach to the East and West.
Comments:
For the US, the Western Balkans are an ordinary point on the globe, regardless of the declarations of increased interest in the region and the fact that Washington assigned a special envoy (Gabriel Escobar), whose level is Deputy Assistant Secretary for the Bureau of European and Eurasian Affairs. We do not expect a change in the US policy towards Serbia and for the near future it will leave to EU to lead the process of Euro-Atlantic integration of Serbia.
For the European Union, the Western Balkans are a border area, and the countries are candidates for membership with the Union, which makes relations with them a strategic priority. At the same time, in Brussels, they pay great attention to the transatlantic cooperation and cannot afford a serious divergence in their positions with the USA towards the Western Balkans, respectively Serbia. In this regard, common priorities were formulated such as the democratization of Serbia, removal of the influence of Russia and China, normalization of relations with Kosovo. Generally speaking – they are working for continuation of the geopolitical processes that started to give real results after 1989.
In this connection, we cannot expect any problems and difficulties in the EU-US relations because of Serbia.
If we say that USA and EU are the blue on the map but Russia and China are the red, the current situation in Serbia looks like “the fifty shades of purple”. All of the above international powers have their influence on Serbia and Aleksandar Vucic but in the same the latter succeeds until now to balance between them and their pressure in his personal and Serbian interest.
In our opinion there is very little time for any serious change in the situation having in mind the upcoming elections for the European Parliament and the US Presidential elections, and A.Vucic will use this time to reaffirm his position in Serbia as the only factor of stability and reliability for the foreign factors.
It is clear that there are two main problems in the integration of Serbia in the EU – the normalisation of relations with Kosovo and the reluctance of Belgrade to take an anti-Russian position. Added to these problems was the conclusion of a Free Trade Agreement with China, which conflicts with the commitments undertaken by Serbia in the Stabilisation and Association Agreement with the EU.
In the same time just a few days ago the prime minister of Serbia said openly to the ambassadors of the member states in Belgrade that the inclusion of the Ohrid Agreement in the negotiating Chapter 35, the way it is proposed by the EU Commission, without taking into account the red lines of the Serbian government about the recognition of Kosovo and its membership in UN will mean the END of negotiations for the membership of Serbia in EU.
Until now formally EU was pursuing a “carrot and stick” approach towards Serbia, but lately Brussel was offering more “carrots”, leaving the stick behind the door due to a fear of pushing Belgrade away from the EU and into the hands of Russia, but after the above ultimatum it might simply say “the decision is yours and it is an invitation not an order to join the club”. Such an approach might push the Serbian leadership to think more clearly for the future of their country or if they can’t it might push the common people to do something about it.
