serbia insight sep 2010

7/28/2019 Serbia Insight Sep 2010

http://slidepdf.com/reader/full/serbia-insight-sep-2010 1/4

1

Issue 01 – Summer 2010

Government of SerbiaEuropean Integration Office

Editorial If you want to know which path to take, you have toknow where you are headed

It is my true pleasure to intro-duce to you the first issue of

Serbia InSight, a quarterly news-letter aimed at providing short and accurate information about Serbia’s achievements on its way to the European Union.

The Government of the Republic of Serbia has placed EU integration at the top of its politicalagenda, initiating a number of economic, socialand political reforms that have already brought uscloser to the EU. Being in office as the Deputy Prime Minister for European Integration for over three years now I can say without any doubt that Serbia has taken firm and strong first stepstowards the EU membership.

Last year, 2009, was particularly fruitful. In Oc-tober, the European Commission issued a very

positive Progress Report for Serbia. In December,the Council took the decision to unfreeze the

Interim Trade Agreement. And after decades of a very restrictive visa regime, starting from 19December 2009, Serbian citizens are able totravel freely to countries of the Schengen area.

Serbia has had quite a few challenges in the previous years, particularly with regard to eco-nomic and social developments. The drop of GDP in 2009 by 3%, the increase in unemploy-ment rate from 16.6 to 19.2%, the uneven re-

gional development are just a few facts that

point out the importance of economic reformsand the need to invest in infrastructure and knowledge-based economy. Serbia has made anenormous effort to stay on track and keep the

prospect of enhanced economic convergencewith the EU alive. We concluded EUR 3bn Stand-by Arrangement with the IMF and adjusted fis-cal expenditures by more than EUR 1bn. As aresult, Serbia was one of the first countries inthe region that went out of recession and theonly country in the world whose risk category with the OECD was upgraded in February 2010– from category 7 to category 6. We are particu-larly pleased that our strong commitment to

implementing economic reforms has been rec-ognized by the EU and supported by EUR 200mnmacro finance assistance, along with over EUR1bn of EIB infrastructure loans.

Serbia’s process of European integration is now supported by more than 70 percent of the popu-lation. Having the support of a vast majority of citizens, on 22 December 2009 President Boris

Tadic handed over the application for EU mem-bership to Swedish PM Reinfeldt. The positiveassessment of Serbian cooperation with the

ICTY by the chief prosecutor of the ICTY SergeBrammertz in June 2010 led to the decision of the Council to start the SAA ratification pro-

cess. Having in mind all these achievementsand a solid administrative capacity, Serbia isnow completely ready to become a candidatecountry, and our midterm goal is to start theaccession negotiations with the EU.

Albeit dealing with the very sensitive issue of our Southern Province of Kosovo and Metohija,Serbia has shown a highly constructive and “European” approach to the matter. Further-more, Serbia is steadfast in seeking a mutually acceptable solution through negotiations and

peaceful, political means.

On behalf of the Government of Serbia and allSerbian citizens, I can undoubtedly say that

we will continue to work hard, engaging all possible resources to lead Serbia to a better,brighter, EU future.

Sincerely,

Božidar ÐelicDeputy Prime Minister for European

Integration and Minister of Scienceand Technological Development

Commission welcomes the Council

decision to initiate the SAA ratificationOn 14 June 2010, the EU Council of Ministers decided to un-freeze the process of ratification of the Stabilisation and Asso-ciation Agreement (SAA) between the EU and Serbia, and thisdocument has so far been ratified by Spain, Malta, Bulgariaand Italy.

The decision was adopted following the report of the ICTY chief prosecutor, Serge Brammertz to the EU ministers, expressinghis contentment with Serbia’s cooperation with the Interna-tional Criminal Tribunal for the Former Yugoslavia and statingthat the arrest of the remaining fugitives is the only option.

European Commissioner for Enlargement, Stefan Fule also wel-comed the unfreezing of the SAA ratification process, notingthat such a decision brings Serbia closer to the European Union

and creates a stronger, legally binding and institutionalisedfoundation for their mutual relations. He also expressed hopethat the Council would address the European Commission witha request to prepare the opinion on Serbia’s application for EUmembership.

Tadic ’s address to the MP’s

“Kosovo and Metohija is an exceptionally important issues and therefore, atthis point in time, we must find a solution therefore”, Serbian President BorisTadic said at the session of the Assembly dedicated to state policy regardingKosovo, held on 26 July upon the conclusion of the International Court of Justice whereby it was estimated that Kosovo's Declaration of Independenceof 2008 did not represent a breach of international law.

“Serbia must demonstrate by its actions that it leads a serious policy, thatit belongs to the international community and to the European integrationprocess. Only the Serbia that strives to resolve the problems is significantto the EU and the international community. Any other Serbia will be the onethat will endure isolation and backlog. Serbia in isolation and backlog is nota democratic country and it is certainly not a country capable of catching upwith technological development.”

Tadic's message to Serbs and Albanians in Kosovo was that Serbia would not

waive its legitimate interests in this territory and that it will find a solutionthrough peaceful policy rather than war.

Serbia’s position in the UN General Assembly and its regional policy must dem-onstrate once again that Serbia is a factor of peace and stability said presidentTadic and concluded that there is no alternative to Serbia’s EU membership.



2

Regional Cooperation

First official visit of Croatian President toSerbia

During the first official visit of Croatian Presi-dent Ivo Josipovic to Belgrade, on 18 July,described by Serbian President Boris Tadic ashistorical, the two presidents agreed that therelations of their countries have been im-

proved after the problematic past, as well asthat the countries are on the right track toresolve a number of open issues such as thereturn of refugees to Croatia, protection of their property, script and language.

Tadic underlined that the issue of mutual charg-es should be resolved out of court, adding thatit is exceptionally important to achieve an at-mosphere of reconciliation, to find the miss-ing and to undertake the graves exhumation.

The most significant progress in the relationsbetween these two countries is anticipated inpolice and prosecution cooperation and in thefield of economy.

Agreement on extradition between Serbiaand Croatia

On 29 June, Serbia and Croatia concluded theAgreement on mutual extradition, which will enable the two countries to extradite theircitizens charged or sentenced for the acts of organized crime and corruption. This is a his-torical step having in mind that no otherstates in regional and in worldwide legal prac-tice are known to have concluded a similaragreement. This paper contributes to two ob-

jectives of Serbia's policy – European integra-tion and intensified fight against organised

crime and corruption. Additionally, a Regional centre for combating organised crime is to beestablished by the end of the year, which will be composed of joint operational teams in-cluding prosecutors from Serbia and Croatia.

Agreement on military cooperation betweenSerbia and Croatia

Agreement on cooperation in the defence areahas been concluded between Serbia and Croatiaon 8 June, which is highly significant for normal-ization of relations between the two countriesand for stabilization of the South-East Euro-pean region. The agreement has further profes-sional and political significance and it opens the

possibility for an ever stronger military cooper-ation, cooperation in the area of defence indus-try, as well as possibility for a joint action of Serbia and Croatia in the third markets. Theexchange of experience on participation in peacemissions, cooperation in military educationfield and joint projects of defence industries arethe issues of interest for both countries.

Visit to Srebrenica – reconciliation act

On 11 July, during his second visit to the com-memoration ceremony for the Muslims murderedin Srebrenica by the Army of the Republic of Srpska, Serbian President Boris Tadic stated

that he would never give up the search andimprisonment of culprits for this crime, nota-bly Ratko Mladic .

He said that 11 July is extremely difficult for thevictims' families and for all people in the ter-ritory of the former Yugoslavia, and estimatedthat this page of history cannot be closed un-til all responsible persons are sentenced.

Tadic attended this year's commemoration inPotocari with a strong support of the Govern-ment and the Assembly, which adopted a Dec-laration condemning the crime committed inSrebrenica on 30 March.

Fight against organized crime is the mostimportant task of the countries in the region

During the conclusion of the Agreement on JointContact Centre for Police and Customs Coop-eration between Serbia and Bulgaria on 26 April,

Serbian Prime Minister Mirko Cvetkovic stated

that fight against organised crime is one of themost important tasks currently faced by thecountries of the SEE region. The Agreement stip-ulates cooperation between intelligence andcounterintelligence services of the two countries,and it is aimed at ensuring information exchangeand a more efficient fight against smugglingof drugs, cigarettes and human trafficking.

Enacting of the Law on ReSPAEstablishment

By adopting the Law on ReSPA Establishmenton 29 June, Serbia met the obligation to ratifythe Agreement Establishing the Regional School for Public Administration. As this process is also

finalized in Albania, Macedonia, Bosnia andHerzegovina and Montenegro, ReSPA obtainedthe status of international organization withthe seat in Danilovgrad, Montenegro. The ob-

jective of this school is to educate civil ser-vants in line with the principles of EuropeanAdministrative Space and to develop adminis-trative capacities and human resources, thusstrengthening cooperation between the publicadministrations in the region and improvingthe relations with the EU countries and mem-bers of European Economic Area.

Elections in National Minority Councils

The turnout in direct elections in National Mi-nority Councils in Serbia, held on 6 June, inaccordance with the new Law on National Mi-nority Councils, was 54.5 percent. The National Councils were elected by 19 minorities (Croatian,Macedonian, Slovenian, Albanian, Askali, Bos-niak, Bulgarian, Bunjevci, Vlach, Greek, Egyptian,Hungarian, German, Roma, Romanian, Ruthenian,Slovakian, Ukrainian and Czech), and 237.792voters out of 436.334 registered in special lists voted. The largest turnout was achievedby the Greek minority – 77.05 percent and theleast turnout was among the Askalis – 38.85percent. The Head of OSCE Mission to Serbia,Dimitrios Kypreos assessed that the electionswere regular, held in a fair atmosphere, as well as that they demonstrated the state dedica-tion to promoting the status of its minorities.

EU assistance to the civil society in Serbia

The European Union provided the assistance of 5.3 million EUR for development projects in 25media companies and 32 organisations of civil society in Serbia. This grant to media andcivil sector, dedicated to promotion of report-ing on Serbia's European integrations and co-operation between non-government organiza-

tions and the EU is implemented through theprojects “Strengthening of dialogue betweenthe civil society organizations in Serbia andEU“ and “Support to media in the field of Eu-ropean Integrations“.

Support to Serbia’s EU membership – 65 percentThe support of Serbia’s European Union ac-cession is constant – both last year and thisyear; 65 percent of population would providea positive answer to the referendum question“Do you support Serbia’s EU membership?”,which is indicated by the results of the publicpoll ”Citizens’ opinion on Serbia’s Europeanintegration process“ held in June this year.

There is also an increased number of personswho deem that the reforms necessary for EUaccession should be carried out to create a bet-ter Serbia and not because they are the re-quirements imposed by the EU. Such opinion

is supported by 72 percent of the interviewed,which is nine percent more than in 2009, while81 percent of population considers that thewhite Schengen list is important for Serbia.

Political Notebook

If a referendum on our country’sEuropean Union membership was organised

tomorrow, how would You vote?

Doesn't know –refused to answer

6%

Iwouldn't

vote14%

I wouldvote

against15%

I wouldvote for

65%



3

Interim Agreement between EU and Serbia

smoothly implementedThe first meeting of the Sub-committee fortrade, customs and taxation within the In-terim Agreement between the EU and Serbiawas held in end-June 2010, after the InterimAgreement (IA) entered into force in Febru-ary 2010. Undisturbed implementation of theIA was confirmed at the meeting, as well asSerbia's progress in the process of accession tothe World Trade Organisation (WTO).

Representatives of the European Commissionand Serbian officials underlined the large sig-nificance attached to the Central EuropeanFree Trade Agreement (CEFTA) and regional cooperation. The European Commission wel-

comed the activities under Serbia’s CEFTApresidency, encouraging all signatories to theAgreement to efficiently, smoothly and legallypromote its implementation.

EBRD: Serbia has highest economic growthin the West Balkans

In 2010, Serbia will have the highest rate of economic growth in the West Balkans region,states the latest report of the European Bankfor Reconstruction and Development (EBRD)with regard to economic prospects of Central and South-East European region. According toEBRD estimate, this was partly as a result of the recovery of metal prices, as well as theimplementation of the comprehensive infra-structure development programme.

OECD: Serbia – regional leader in foreigninvestment promotion

Serbia received a highly positive mark of theOrganisation for Economic Cooperation andDevelopment (OECD) in most areas affecting thecreation of a positive climate for foreign directinvestments. In the analysis made by the OECDInvestment Committee entitled “InvestmentReform Index 2010”, the first since 2006, it is

demonstrated that Serbia made significant prog-

ress in several sectors, the most highly ratedbeing the promotion of foreign investmentsand access to funds for company support.

The analysis was prepared for CEFTA countries,Romania and Bulgaria, with more than 100indicators processed with regard to invest-ment climate, human resources, bureaucraticprocedures, infrastructure in place, quality of legislation, operation of institutions, protec-tion of property rights.

Serbian export to CEFTA regionin 2009 twice as high as import

In 2009, Serbia had the 1.33 billion USD sur-plus in trade with CEFTA countries, the Repub-

lic Statistical Office reports.This surplus mostly resulted from the exportof agriculture products, cereals and beverages.Serbia’s export to CEFTA region in 2009 was2.63 billion USD and it was twice as high asimport, which amounted to 1.3 billion USD.

Most imported products from CEFTA region weresteel, mineral coal, vegetables and fruits, corkand wood. In 2009, the overall Serbian exportwas 8.34 billion USD and the import amountedto 16 billion USD.

During this year's presidency of CEFTA, Serbiawill initiate the negotiations on service lib-eralization, which is to contribute to export

increase.Furthermore, in the upcoming period, CEFTA mem-bers should also reach an agreement on appli-cation of uniform public procurement conditions,as well as on harmonization of competition pol-icies, incentives and investment protection.

“Panasonic” to construct a new plantin Svilajnac

By 1 May 2010, Japanese company “Panasonic”will build a halogen lamp production plant in Svi-lajnac, with an investment worth 15 million EUR.

This will be the first "Panasonic“ plant in the

Balkans and the largest one in Europe, whichwill cover the area of 18 thousand square me-ters and employ 300 persons.

“Panasonic” will come to Svilajnac upon rec-ommendation of German factory "Reum" whichis constructing a production plant for plasticcar parts in this town.

New factory in Niš

By mid-2011, Italian company “Daitek” will construct a car parts factory in Niš, the valueof construction being 12 million EUR. Com-pany "Daitek“ is the first Italian investor inthis town, it has 7 factories worldwide withthe annual turnover of 270 million EUR. The

Niš factory will employ 400 people and it will supply clients such as “Mercedes”, "Renault",“General Motors” and “Fiat”.

Parts for “Kia” and “Hyundai” from Raca

Only three months following the arrival of theSouth Korean company "Jura” to Raca, the fac-tory employed 300 persons and initiated serial production of car parts for world renowned carproducers “Kia” and “Hyundai”. The total value of investment in Raca is 8 million EUR, and “Jura”received the grant from the Programme forPromotion of Direct Investments amounting to4.5 million EUR through Serbian Agency for For-eign Investments and Export Promotion (SIEPA).

The state-of-the-art factory for brandyproduction opened in Serbia

The “Zaric” distillery which opened in Kosjericin June represents an ultimate state-of-the-art facility for brandy production in the regionand generates benefit for 1500 families. Thetotal investment value is 3 million EUR andthe fruit processing facility will produce 3 mil-lion litres of brandy annually, 60 percent of which will reach the consumers in Germany,Austria, Slovenia and Australia.

Economic Notebook

Indicators of Serbia’s external position2001 2002 2003 2004 2005 2006 2007 2008 Q1

2009Q2

2009Q3

2009Q4

2009

EXTERNAL LIQUIDITY INDICATORS (in %)

Forex reserves /GDP 10.3 13.6 16.3 16.3 24.2 38.4 32.6 24.2 24.4 27.4 30.5 34.5

Debt repayment/GDP 0.8 1.4 2.0 3.9 4.6 7.0 9.8 10.5 10.0 12.4 10.2 10.5

EXTERNAL SOLVENCY INDICATORS (in %)

External debt/GDP 98.3 67.2 62.3 54.3 64.2 63.3 60.2 64.5 64.5 66.9 69.7 74.1

External debt/exports of goods and services 463.9 344.8 281.6 232.3 245.1 214.2 204.8 214.7 221.9 236.0 252.7 269.0

FINANCIAL RISK EXPOSURE INDICATORS (in %)

Forex reserves/M1 135.9 143.3 195.3 221.0 291.1 356.5 306.9 300.3 366.2 372.4 383.4 393.3

Forex reserves/reserve money 136.3 132.0 168.0 166.2 170.3 177.8 173.9 140.6 160.9 177.1 193.3 190.3

OPENNESS OF ECONOMY (EXPORTS + IMPORTS)/GDP 60.3 59.4 63.6 73.2 73.4 80.4 82.1 83.4 76.2 71.8 68.3 69.7

MEMORANDUM: (in EUR million)GDP (in EUR million) 12,821 16,028 17,306 19,026 20,306 23,305 28,785 33,418 6,732 7,495 7,993 8,166

External debt 12,609 10,768 10,857 10,355 13,064 14,884 17,789 21,800 21,445 21,687 21,784 22,787

Central bank foreign exchange reserves 1,325 2,186 2,840 3,117 4,935 9,025 9,641 8,160 8,113 8,885 9,523 10,602

Data downloaded and use allowed. Due to technical reasons, NBS makes no warranties as to the accuracy or completeness of the information.



800 million EUR for Serbian science

Research projects and scientific infrastructurewill have a boost of 800 million EUR in the nextfive years.The Government of the Republic of Serbia in December 2009, adopted the na-

tional Strategy of Scientific and Technological Development of the Republic of Serbia 2010–2015. Furthermore, the Assembly adopted anew legal framework for science and innova-tion that enables the implementation of theStrategy and the accompanying Action Plan.

In order to enhance the working conditions of researchers and scientists in Serbia, the Gov-ernment has signed a Financial Agreement withthe European Investment Bank regarding a 200million EUR loan for R&D infrastructure. TheFinancial Agreement has a clause that bindsthe Government to invest further 200 millionEUR from alternative sources of finance (theBudget, the Council of Europe Development

Bank etc).Initiative for R&D infrastructure investmentincludes various projects from renovation andrebuilding of the existing network, acquisitionof equipment for research institutes, build-

ing apartments for researchers, formation of centres of excellence for young talents andinvestment in projects that will enable a sig-nificant brain gain.

Master Plan for Serbian Infrastructure adopted

On 19 June, the National Infrastructure Coun-cil adopted the Master Plan for Serbia whichwill designate the investment in traffic infra-structure in the upcoming 10 years.

The general guidelines of the plan refer to thekey modes of transport, the priority being giv-en to Corridors 10 and 11 in the areas of roadand railway traffic. In the field of air trafficthe airports adaptation is foreseen, whereasin the waterway transport the emphasis is puton Corridor 7 i.e. the river Danube.

In the following ten years, the Serbian infra-structure development programme will receiveone billion to one and a half billion EUR per

year. One part of the funds will be ensuredfrom European and World Bank funds and therest from commercial funds.

The amount allocated for Serbian roads main-tenance is 5.5 million and 3 millions for new

constructions, primarily for Corridor 10 andhighway Belgrade–Cacak.

Project for regional managementof solid waste in Sremska Mitrovica

The project for regional management of solidwaste will be realized in Sremska Mitrovica andŠabac. The aim of the project is to ensure thesystem for underground disposal of solid waste,which would significantly improve the qualityof life, sanitary protection and prevent furtherpollution of areas along the river Sava.

Project value is cca 11 million EUR, 7.3 millionof which is invested by the European Union,2.3 million allocated from the budgets of Srem-ska Mitrovica and Šabac and 87 million RSD

from the Environmental Protection Fund.The Project also envisages the increased cov-erage of solid waste collection services to 100percent by 2010 in urban areas and to 50 per-cent in rural areas.

4

National Programme forIntegration of the Re-

public of Serbia with theEuropean Union (NPI),representing a detailedplan for meeting all cri-teria required from acountry to become anEU member state, was75% fulfilled in the pe-riod from July 2008 toJune 2010. Out of 157laws planned for adop-

tion, 134 were adopted along with 271 of theplanned by-laws. The adoption of laws, regula-tions and rulebooks significantly modified thefunctioning of agriculture, transport, it regu-

lated the protection of competition, introducedthe system for state aid control, regulatedroad safety, established a legal framework forcombating organised crime and corruption.

The objective of the NPI is for state institu-tions to monitor their own progress in the EU

accession process in a clear and measurablemanner. This instrument visibly demonstrates

everyone's output and what remains to bedone. On the one hand, the institutions arethus stimulated to meet their obligations,but on the other hand it is clear now thatseveral “champions” will not suffice for Ser-bia's progress as they cannot enter the EUindividually, it is instead necessary to havea functioning whole. However, I would liketo praise the work of the National Assembly,whose prompt functioning the stimulus forthe Government's work on realisation of theearmarked European goals.

Finally, the NPI is not only about the figures.What is even more important is the enforcement

of the adopted regulations, which substan-tially change the citizens’ lives. They will thusunderstand that the changes they wish to seein Serbia will not happen at the moment of EUaccession but rather by overcoming the ob-stacles and through economic and political reforms that lead towards membership.

Milica Delevic,

Director of the European

Integration Office

Agenda

16 September, BrusselsOpen Hearing in the EU Parliament

– Serbia 10 years after – moving ontowards the EU

16 September, BrusselsExhibition of photographs – Beautiful Serbia, author: Dragoljub ZamurovicLocation: Mission of the Republic Serbiato the EU, 53, Boulevard du Regent,B-1000 Brussels

16–17 September, BrusselsEnhanced Permanent Dialogue betweenSerbia and the EU – Agriculture,Fisheries and Food safety, veterinary andphytosanitary policy

30 September, Belgrade

Enhanced Permanent Dialogue betweenSerbia and the EU – Economic andFinancial Issues and Statistics

4–5 October 2010, Belgrade4th EP-Serbia Interparliamentary meeting

5 October 2010, BelgradeInternational Conference – Serbia’sEuropean Path – 10 Years After

Useful links

Government of the Republic of Serbia

www.srbija.gov.rs

Serbian European Integration Office

www.seio.gov.rs

National Assembly of the Republic of Serbia

www.parlament.gov.rs

Delegation of the European Union to the Republic

of Serbia

www.europa.org.rs

Mission of the Republic of Serbia to the EU

53, Boulevard du RegentB-1000 Brussels, Belgiumtel: +32 (02) 649 82 42E-mail: [email protected]

Viewpoint

According to the results of the Report onImplementation of the Amended National Programme for Integration of the Republic of Serbia with the European Union (NPI), pre-pared by the European Integration Office, theimplementation of the NPI in its entirety was

73 percent in the second quarter of 2010.Taking into account the regulations plannedfor adoption in the period from July 2008 toJune 2010, the National Programme was 75%implemented in its entirety – 404 regulationswere adopted out of 537 planned for adop-tion. The number of laws planned for adop-

tion was 157, 134 of which were adopted i.e.85 percent. Out of 380 by-laws planned foradoption 271 were adopted i.e. 71 percent.

The NPI is a precise plan for fulfilling the cri-teria necessary for a country to become anEU member state, starting from political andeconomic criteria through to the detailedstandards applied in the Union in the areassuch as trade, agriculture, environmental pro-tection and transport etc. The objective of theNPI is to enable state institutions to moni-tor their own progress in the EU accessionprocess in a clear and measurable manner.

In the second quarter of 2010, NPI was 73 percent entirely implemented

serbia insight sep 2010

Documents