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Books on Serbia


Key Economic Data
  2003 2002 2001 Ranking(2003)
Millions of US $
GNI per capita
 US $ 106
Ranking is given out of 208 nations - (data from the World Bank)

Update No: 184 - (26/05/13)

Summary: A breakthrough agreement has been reached on Kosovo. Whilst stopping short of recognizing independence, it does constitute a major improvement in relations between the two states, that should hasten Serbia’s progress towards EU membership.

A major event to have occurred in this past month in Serbia is a landmark agreement on Kosovo. The authorities in Belgrade had long refused to accept the sovereignty of the majority Albanian state which claimed independence in 2008, and this has soured potential EU membership. On April 19, this changed with an EU-brokered agreement to normalize relations which has been described by welcoming EU observers as a “game-changer”. Another significant step forward for pan-Balkan relations has come in the form of an apology from one time hardline Serb nationalist President Nikolic, for the 1995 Srebenica massacre which claimed the lives of 8,000 Muslim men and boys. Both these moves would indicate a changing tide in terms of Serbian national identity and a desire to move beyond the regressive rhetoric of the conflict years, which claimed so many lives. Economically speaking, Serbia finds itself in troubled waters and is hoping that EU accession will improve its image to investors. In the meantime, Russia continues to provide economic support.

The decision to normalize relations was agreed by Serbia's Ivica Dacic and Kosovo's Hashim Thacic, under the mediation of the European Union foreign policy chief, Catherine Ashton, in April. It was heralded as a major breakthrough. Belgrade has steadfastly refused to recognize the independence of this state which claimed its independence in 2008, despite the EU repeatedly insisting that an improvement in ties must be signalled if progress towards EU membership is to be made. Whilst the agreement does not mean Serbia recognizes Kosovo as an independent state, it does concede that the government in Pristina has legal authority over the whole territory, including the areas of northern Kosovo which are home to over 40,000 Serbs. It is the welfare of these Serbs (along with the historical and psychological import of Kosovo to Serb nationhood) that has concerned the authorities. As part of the 15-point deal, four Serb municipalities in the North will merge. In this region there will be Kosovar police but with a Serb commander and with regard to the justice system, it will be Kosovo-led but Serb judges will be included. Equally vital is the agreement on both sides that neither will attempt to hinder the other’s attempts to gain EU membership. Swedish Foreign Minister Carl Bildt, a former UN and EU envoy in the Balkans, stated of the agreement, the product of ten high level meetings, that “the Rubicon has been crossed […] There is no way back."

The process has not been without its critics. The leader of the Serbian Orthodox Church, Patriarch Irinej, said it seems to "mark the pure surrender... of our most important territory in spiritual and historical terms." On May 10, more than 3,000 people gathered in a Belgrade square to protest against the agreement. Serbs in Kosovo have also rallied in protest against the move and representatives of the community even sent a letter to Moscow, traditionally a backer of Serbia, to protest against what they viewed as an attack upon their nationhood. The outcry has been such that Serbian Deputy Prime Minister Aleksandar Vucic suggested Belgrade might hold a referendum on the matter.

Serbs on the whole are not necessarily convinced that EU membership is worth the sacrifice on Kosovo. Apparently just after the agreement, a poll showed that popular support for EU membership was at an all-time low of 41%. “Asking a Serbian if he chooses the EU over Kosovo is the same as asking him to choose whether he wants his left or right leg amputated,” said Marko Blagojevic, programme director at the Belgrade-based Centre for Free Elections and Democracy, when asked to evaluate the popular outcry at the decision. Problems were also anticipated by Carl Bildt who also pointed out is that “implementation will not be easy.” These words seem to have rung somewhat true so far. On a trip to Belgrade on May 20, Germany’s Foreign Minister Guido Westerwelle asserted that, "An agreement on the implementation of the Brussels agreement and the start of its realization is a key condition for Serbia's further progress on its European path. “ He asserted that for Germany to recommend that its parliament accept the prospect of Serbian accession to the EU, ‘visible’ progress would have to be made. A first session on May 21 ended regretfully without agreement. The two sides have until June 15 to make progress. It is hoped that given the notable steps forwards, the rhetoric of conciliation can be made a reality.

Serbia’s quest to join the EU has long been hindered by the Kosovo issue, but Prime Minister Ivica Dacic has consistently stressed the necessity of the Balkan state achieving EU accession. He has told voters that any delay in the negotiations on EU accession would hold "disastrous consequences for our people and our country." The economic benefits of membership are inestimable. Serbia’s economy suffered badly in 2012, with unemployment at around 25% and public debt at about 60% of GDP. EU membership would certainly boost much needed investor confidence. It is not particularly reassuring for citizens, many of whom consider the thriving black market as a more palatable method of dealing with economic woes than awaiting long-term trickle down effects. The $12 billion black market currently accounts for about a third of the $37 billion economy!

In the meantime Serbia has interestingly solidified ties with Russia, which is the biggest investor in its economy. Back in April Moscow granted Serbia a $500 million loan to help shore up its budget deficit. Cultural, religious and historical ties have helped sustain fraternity between the states. On May 22, President Nikolic and President Putin met and agreed to usher in a ‘new era of cooperation’. A strategic partnership document will be signed on the 23rd. It will be interesting to see what Moscow makes of Serbia’s less trenchant stance upon Kosovar independence.

The normalization agreement is not the only historic moment that the month of April bore witness to. In a televised interview on May 7, President Tomislav Nikolic offered a public apology for the Srebenica massacre, one of the key traumas of the Balkans conflict, stating: "I am down on my knees because of it. Here, I am down on my knees. And I am asking for a pardon for Serbia for the crime that was committed in Srebrenica. I apologise for the crimes committed by any individual on behalf of our state and our people.” Given that until five years ago Nikolic was a high-ranking member of the ultra-nationalist Serbian Radical Party, the gesture should not be underestimated. As little as one year ago, he was still denying that any crimes were committed by Serbia during the conflict.

Zeljko Komsic, the Croat member of fellow balkans state Bosnia's presidency said he was “deeply surprised" by the apology, adding it would improve ties between the two countries. Mr Nikolic did, however, stop short of calling the massacre genocide, as it was a charge that ‘remained to be proven’. Survivors and relatives of those who perished at Srebenica have not been placated by the President’s apology and will not be until he acknowledges genocide. However, there are many that can see that the apology is a step closer to this goal.

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