SERBIA ON TOP OF THE LIST FOR EU ENLARGEMENT IN WESTERN BALKANS

The first EU-Serbia Intergovernmental conference held in Brussels on 21 January 2014 marked the official opening of accession negotiations between the EU and Serbia. A the technical level, the negotiations have been in progress since September 2013. The Government of the Republic of Serbia has established the institutional structure for the European integration process, consisting of: the Coordination Body for the Process of Accession of the Republic of Serbia to the European Union, the Coordination Body Council and the Negotiating Team for Accession of the Republic of Serbia to the European Union.

The key component of successful accession negotiations for Serbia is not only the mere comprehension and adoption of the EU acquis, but also its sustainable implementation and the extent to which it is embedded in the value system. Therefore, Serbia should perceive positively the long-lasting, complex and demanding negotiation process as a chance and incentive, i.e. to embrace the EU’s reluctance to enlarge due to its internal functioning problems coupled with unfavourable public opinion, and the fact that it insists on sustainability of reforms in the candidate countries. Examples of failed reforms in Bulgaria and Romania in the areas of rule of law and public administration, consequently impeding these countries to fully take advantage of EU structural funds and the EU membership in general, and the denial of European values in the Croatian society upon accession, are illustrative examples to Serbia that membership itself does not bring benefits unless Serbia prepares thoroughly during the pre-accession phase for the rights and obligations of EU membership.

Thus, in parallel to the adoption and implementation of the EU acquis under each negotiating chapter, Serbia should significantly improve its administrative capacities in order to assure that the undertaken reforms are sustainable and substantially implemented. This will be difficult to achieve bearing in mind the current policy making system in Serbia and the manner in which policies are being implemented. Laws and regulations are adopted without evidence base, conducted analyses, consultations with the stakeholders and cost-benefit calculations. By bringing a certain regulation in line with the EU acquis, Serbia did fulfil its formal obligation, but such a law may be of poor quality and barely implementable due to the aforementioned characteristics of the system. If this problem is translated into the process of accession negotiations, Serbia will not be capable to negotiate transitional provisions unless it defends its national position with arguments and evidence. Likewise, given that public policies nowadays have a cross-cutting nature which implies the competences of more than one line ministry, it will be necessary to substantially improve the coordination of line ministries and governmental institutions.

If Serbian officials present non-harmonised or contradictory positions, Serbia will undoubtedly seem unprofessional to the European interlocutors. Conversely, if it presents and defends its positions with a single voice, Serbia can significantly raise its credibility, as the consistency in implementation of the agreed obligations would increase trust and sympathies on the EU side. 

Lastly, one cannot address the systemic problems without considering the question of bearers of the negotiations and the necessary reforms. Even though the Serbian administration may at first sight appear to be large in size, it does not have the sufficient number of experts in European affairs. What is more, it is plagued by a high level of staff turnover as the well-performing civil servants have the tendency to turn to the private or international sector due to a lack of incentives or promotion opportunities in the civil service. For the accession negotiation process and the subsequent membership to be successful, the role of civil servants in gathering intelligence from first hand experience, networking with the relevant stakeholders and being regularly in contact with the EU officials is of utmost importance. In that vein, the Serbian Mission to the EU in Brussels should increase the number of civil servants to be able to fulfil its mandate successfully (The Mission currently counts 18 people and one Counsellor is in charge of 15 chapters of the acquis)) . The hope remains that the challenges of the EU membership negotiations will influence the Serbian political elite and the decision makers so that they realise the importance of investment in human resources.

Last but not least it should be pointed that in the current context, the European Union is losing interest in integrating new members. In addition, European countries are wary of institutional corruption and the presence of organized crime in Serbia. On Serbia’s side, while Belgrade is interested in becoming part of the European Union, it will not do so at the cost of hurting Serbian-Rusian relations. As a result, Serbia's main foreign policy challenge is to remain attractive for both the EU and Russia so it can continue to benefit from both relationship

Key Points

1. There is an indisputable commitment to EU enlargement to the Western Balkans and  Serbia is on the top of the list. There is a clear support and commitment to Serbia becoming a part of the European family.
2. Harmonization with European standards is in the interests of the citizens of Serbia. Serbia’s European path is a process that requires time it is necessary to work on it – not only members of the government should do so, but also the whole society.
3. Full economic success requires the continuation of reforms and, above all, work to strengthen the rule of law. Rule of law reform is essential in order to create a predictable business environment.  Privatization and restructuring of large companies needs to be completed as well as  public administration reform. Public administration reform is about the changes that Serbia needs to make in its public institutions. It is about guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities. Among others, candidate countries need to establish a professional civil service capable of taking policy decisions and providing public services. Public administration must perform at central, regional and local levels. It needs to be efficient, merit-based, transparent and accountable at all levels. It is also about horizontal administrative capacity, which is necessary to implement and enforce EU law in all sectors. Serbia needs a reform of the tax administration to ensure better collection of taxes and strengthen the fight against the gray economy.
4. The Serbian government should be more active in the area of public investments, especially now, when public finances are in a better condition. Unemployment in Serbia has long been a problem and the special needs of providing more opportunities to young people should be taken into account. 
5. The European Union plays a key role in supporting the Serbian economy and is by far the most important trade partner of Serbia and its investor. Last year, the EU invested EUR 1.5 billion in Serbia.

50 Largest Serbian companies by revenue and employees (Excluding banks)

1. Nafta Industrija Srbije (Petroleum), Novi Sad
2. Elektroprivred a Srbije (Electricity Utility), Belgrade
3. Fiat Automobili Srbija (Automotive), Kragujevac
4. Telekom Srbija (Telecommunications), Belgrade
5. Delhaize Srbija (Retail), Belgrade
6. Srbijagas (Natural gas), Novi Sad
7. Tarkett (Manufacturing) Backa Palanka
8. Mercator-S (Retail), Novi Sad
9. IDEA (Retail), Belgrade
10. Delta Holding (Holding), Belgrade
11. Telenor Serbia (Telecommunications), Belgrade
12. Autoritas Investments (Consulting), Novi Sad
13. HIP Petrohemija (Petrochemicals), Pancevo
14. YugoRosGaz (Petrochemicals), Belgrade
15. Imlek (Food), Belgrade
16. Victoria Group (Wholesale), Belgrade
17. Knez Petrol (Petroleum wholesale), Sabac
18. Nelt Co. (Wholesale), Belgrade
19. OMV Srbija (Petroleum wholesale), Sabac
20. MK Group (Holding), Belgrade
21. Lukoil Serbia (Petroleum wholesale), Belgrade
22. Hemofarm (Pharmaceuticals), Vrsac
23. Tigar Tyres (Manufacturing), Pirot
24. Interkomerc (Electrical devices wholesale), Belgrade
25. Coca-Cola HBC-Srbija (Beverages), Belgrade
26. RTB Bor (Copper mining), Bor
27. Veletabak (Cigarettes wholesale), Novi Sad
28. Beogradske elektrane (Electric utility), Belgrade
29. Serbian Railways (Rail transport), Belgrade
30. Putevi Centar (Holding), Belgrade
31. Putevi Srbije (Road construction), Belgrade
32. DIS (Retail), Velika Plana
33. Phoenix Pharma (Pharmaceuticals wholesesale), Belgrade
34. Metro Cash & Carry (Meat packing), Belgrade
35. MPC Holding (Holding), Belgrade
36. Mercata (Retail), Belgrade
37. Russian-Serbian Trading Corporation (Wholesale), Novi Sad
38. Sunoko (Sugar), Novi Sad
39. Philip Morris Operations (Tobacco), Nis
40. IM Matijevic (Meat packing), Belgrade
41. Posta Srbije (Postal service), Belgrade
42. Vip mobile (Telecommunications), Belgrade
43. Energoprojekt Holding (Construction), Belgrade
44. Zelezara Smederevo (Steel), Smederevo
45. Grand Prom (Manufacturing), Belgrade
46. Farmakom M.B. (Electricity trading), Sabac
47. Farmalogist (Pharmaceuticals wholesale), Belgrade
48. Atlantic Brands (Wholesale), Belgrade
49. EKO Serbia (Petroleum retail), Belgrade
50. Gen-I (electricity trading), Belgrade