Monthly Journal
December 2023
International Press Review
The most relevant events of the area through international sources
Belgrade refuses to abide by the ‘normalization’ agreement with Kosovo
Euractiv
Serbia has formally rejected compliance with agreements, including the so-called Ohrid agreement, aimed at normalizing relations with Kosovo, brokered by the EU but never undersigned by Belgrade and Pristina. According to international media, Prime Minister Ana Brnabic conveyed this refusal to the European External Action Service in a letter. Serbia accepts the agreement on the path to normalization only without any de facto or de jure recognition of Kosovo, Belgrade said. Serbia will also continue to explicitly refuse to recognize Kosovo’s UN membership or its territorial integrity. The letter emphasized that the Ohrid agreement and the annex are not legally binding treaties, and it asserts that Kosovo remains an integral part of Serbia, which is under international administration as per UN Security Council Resolution 1244 from 1999.
Kosovo asks EU and US to ‘protect’ the agreements reached with Serbia
Koha
Kosovo’s Prime Minister, Albin Kurti, emphasized the need for the European Union and the United States to safeguard the respect of the agreements so far reached with Serbia, at the same time accusing Belgrade of violating the Brussels and Ohrid accords, reached in spring, without consequences. Kurti said that Kosovo should be guaranteed unhindered membership in international organizations and claimed that he aspires to see Belgrade and Pristina coexist as normal neighbours with good relationships. He criticized, at the same time, Western diplomacy for being too lenient on Serbian President Aleksandar Vucic. According to Kurti, there is a parallel to be drawn with the Ukraine war, i.e. that “pampering” autocrats is ineffective.
European public opinion divided on enlargement
Euronews
A European Council on Foreign Relations (ECFR) survey across six EU countries revealed that there is no clear majority support for the accession of any current candidate country to the EU, despite greater openness towards Ukraine, Moldova, and Montenegro. Views varied based on whether respondents were from “older” or “new” member states, with people in Germany, France, and Austria showing more scepticism than Romanians and Poles, especially regarding the enlargement of the EU towards the Balkans. Notably, over one-third of respondents opposed EU accession for Kosovo (37%), Serbia (35%), and Albania (35%). An ISPI specialised survey among international affairs specialists showed even more scepticism: enlargement was the last item on six proposals to strengthen the EU, with 5% of experts agreeing against 35% in favour of a reinforced CFSDP (ISPI Expert Panel 2023).
Bulgarian Parliament overrides presidential veto on military aid to Ukraine
Ukrainska Pravda
The Bulgarian Parliament, with 162 votes in favour and 55 against, overrode President Rumen Radev’s veto on supplying armoured personnel carriers (APCs) to Ukraine. Pro-Russian representatives expressed concerns about the intention to send APCs, echoing the president’s statement that they could be used to protect the Bulgarian border, but they were overvoted. President Radev had initially vetoed the bill, citing insufficient familiarity among MPs with the specific terms of the supply to Kyiv.
Trump’s return to the White House could lead to NATO weakening in Europe
New York Times
Current and former European diplomats had expressed growing concern over potential consequences if a second Trump presidency were to materialize, fearing an American retreat from Europe and a weakening of NATO, the New York Times wrote. This apprehension could potentially extend to the Balkans, particularly in Kosovo, where the NATO presence is essential for maintaining security. As reported by NYT, numerous European diplomats highlighted concerns by their respective governments. The diplomats worry that Trump’s return could not only mean abandoning Ukraine but also usher a broader American withdrawal from the continent and a significant reduction of support for the Atlantic Alliance, as anonymously reported.
Dodik claims he will declare independence if Trump wins the elections
Radio Free Europe
Bosnian Serb leader Milorad Dodik, nationalist and pro-Russian president of Republika Srpska (RS), expressed regret for not declaring the secession from the rest of Bosnia and Herzegovina and the independence of RS during Donald Trump’s first term and suggested he would consider these steps if Trump won again. Dodik, known for threatening secession and the collapse of united Bosnia-Herzegovina, said he believes Republika Srpska will eventually be independent. Over the past 18 months, he has taken steps to establish separate institutions, rejecting the authority of the UN-backed international overseer and aligning ever more closely with Moscow.
Bosnians more concerned about corruption than ethnic tensions
N1
In December, a Transparency International survey in Bosnia and Herzegovina revealed that only 5% of citizens believed ethnic issues were the country’s primary problem. The majority expressed concerns about corruption, unemployment, and poverty. This was consistent with the European Commission’s reform priorities, which emphasized the necessity of enhancing the fight against corruption for Bosnia and Herzegovina to make progress towards EU membership. Addressing these socio-economic challenges is crucial for advancing the country’s integration efforts, Brussels noted on several occasions.
North Macedonia heading to crucial elections in 2024
Balkan Insight
In 2024, North Macedonia will hold presidential and parliamentary elections, crucial for determining the Balkan country’s future path towards the EU. The first round of presidential elections will occur on the 24th of April, followed by parliamentary elections and by a presidential run-off on 8 May 2024. The opposition had long called for snap elections, accusing the government of betraying national interests and fostering corruption. To prevent another blockage by the EU member state Bulgaria, a two-thirds majority in parliament is needed to support a key constitutional change, acknowledging the country’s Bulgarian minority in the state’s founding peoples, a move that is opposed by the current opposition.
Census in Montenegro finally begins
European Western Balkans
In December, Montenegro finally commenced its national census after multiple postponements, prompted by concerns from the opposition Democratic Party of Socialists (DPS) regarding its fairness. The small Balkan nation, with just over 600.000 people, is a NATO member and EU candidate. It included a significant ethnic Serbian community constituting approximately 30% of the population. There are apprehensions in certain sectors of the Montenegrin society that pro-Russia and pro-Serbia forces might attempt to artificially increase the count of individuals identifying as Serbs, raising questions about the accuracy of the census results, with potentially significant political effects.
Sofia scraps controversial tax on the transit of Russian gas
France Presse
Bulgaria has scrapped a controversial tax on the transit of Russian gas through its territory after Hungary threatened to veto Sofia’s Schengen membership bid. Lawmakers in Bulgaria voted to abandon the 20 leva (10 euros) per megawatt-hour tax on Russian gas from the TurkStream pipeline to Hungary and Serbia. Although approved on the 13th of October, the tax proved challenging to enforce as the Russian giant Gazprom never paid the sums requested by Bulgaria. Hungary and Serbia, reliant on Russian energy and with strong ties with the Kremlin, criticized the tariff as a “hostile move” jeopardizing their energy security.
The Insight Angle
Milena Mihajlovic
A co-founder and currently Program Director at the European Policy Centre (CEP) in Belgrade, Serbia – one of the leading think tanks in the Balkans – she is a recognized expert in public administration reform and European affairs. She served as Special Adviser to the Serbian Deputy Prime Minister in 2014-15 and previously as a civil servant in the EU Integration Office of the Serbian Government. Mihajlovic is a co-author of the Template for a Staged Accession to the European Union, a comprehensive proposal for reforming the EU’s enlargement policy. She earned her BA degree in European Studies and International Relations from the American University in Bulgaria and pursued her MA at the College of Europe. She also worked as a consultant for the World Bank and for the OECD.
With the enlargement process to the Western Balkans (WB) currently at a standstill, the EU appears poised to propose an alternative approach to bring the Balkans closer to the bloc. This involves providing increased funds and implementing a phased and gradual accession process, particularly in specific segments of the single market, in exchange for the implementation of reforms. Do you believe this idea of a ‘staged accession’ will be effective, and what are the potential advantages and drawbacks associated with it?
Various ideas on gradual integration have been floated in the last few years. While the proposed phasing-in into the Single Marked is based on the logic of sectoral advancement towards membership, the ‘Staged Accession Model’ favours horizontal progression, based on reform performance across all clusters of membership negotiations, with special emphasis on the fundamentals (rule of law, democracy, etc.). This means that candidates must improve across the board in order to unlock new benefits (increased funding and participation in the work of EU institutions), thus stimulating a balanced progress towards membership. The Model also tackles the question of EU’s absorption capacity, by stipulating specific limitations for new members in the first ten years after accession – most notably the temporary limitation of the veto power in the Council. While concerns have been raised that this might create second-class membership due to the temporary differentiation created between ‘old’ and ‘new’ members, the transitional nature of the proposed limitations guarantees full membership after their expiration.
A rising sense of Euroscepticism is evident in some parts of the region, both among local leaders and the general population. In this context, focusing on economic aspects rather than full political membership might open up more opportunities for external powers like Russia or China in the Balkans. What are your thoughts on this?
Non-democratic actors like Russia, China, Turkey, and Arab countries are already present in WB with large financial and infrastructural projects. Their influence often undermines EU’s efforts to support democratization and fight against corruption in the region, while their propaganda strengthens Euroscepticism in the population. Serbia is the starkest example of such influence, with Russian state media starting operations in the country. These influences have been exacerbated with the increasing East-West polarization since the start of the war in Ukraine. If economic integration without political integration at the helm was a possibility before the war, today it is difficult to imagine it. A large part of EU sanctions against Russia are of economic nature, making foreign and economic policies deeply intertwined. For that reason, I do not believe that a focus on economic integration without a firm promise of full political integration into the EU is a feasible strategy for either the EU or the region.
Regarding the recently unveiled EU ‘Growth plan’, do you think it could realistically yield positive effects in the region? If so, what specific benefits do you anticipate?
The announcement of the Growth Plan is a step in the right direction, although we are concerned by reservations several member states have voiced over the adoption of the proposed funding increase (as part of the medium-term budget review). Connecting funding with reform achievements is an inherent part of our Staged Accession proposal, for which we believe the EU should allocate even higher funding in the next Multiannual Financial Framework. Increasing the funding substantially but progressively towards membership will certainly help in closing the economic gap between the WB and the EU average, as well as make the cost of non-integration more politically visible in the region. It will also help countries gradually build up the administrative capacities towards maximum absorption of EU structural funds after accession. The proposed market integration measures will help create additional tangible benefits for the region’s citizens, though the associated costs and risks for domestic economies need to be carefully analysed and communicated, too.
Conversely, influential figures such as former EC President Prodi argued that the Balkans should be immediately fully integrated into the EU, with all existing issues, citing geostrategic reasons. He suggests that the integration would not pose significant challenges to the bloc. Do you think this could be a feasible option, and does the EU have the resolve to pursue it, maybe after the next European elections?
While enlargement policy has always been in part geopolitically driven, integrating all WB states at once at this point might be counterproductive due to serious issues in and among these countries. In addition to democracy and rule of law issues, including high levels of institutionalized corruption, the countries need to resolve a number of bilateral and statehood-related issues – as part of or in parallel with the accession process. Unfortunately, many of these problems have grown significantly in the period of open-ended and underprioritized enlargement process. Today, the most important stimulus for the WB candidates to address these problems would be an unequivocal confirmation of a medium-term membership perspective, ideally with a clear target year for the next enlargement, as was proposed by European Council President. The Staged Accession Model offers structure and predictability that can incentivize candidates to press on with the difficult reforms to capitalize on the current momentum, which urgently needs to move from words to action.
The unresolved Serbia-Kosovo issue remains a major obstacle to enlargement. Are you optimistic that a normalization agreement of some kind could be reached soon between Belgrade and Pristina?
A normalization agreement is already in place – the Agreement on the Path to Normalization of Relations Between Kosovo and Serbia and the Ohrid Implementation Annex reached in February and March 2023 under the framework of the EU-facilitated dialogue. Despite this breakthrough in negotiations, implementation is still lacking. Yet, the Kosovo Prime Minister recently confirmed readiness to establish the Association of Serbian Majority Municipalities, which has been a stumbling block of negotiations. The normalization agreement offers a number of benefits for both sides, including an enhanced EU accession process. Overall, a strong and predictable membership perspective, substantiated by firm EU actions in moving forward with all countries that make progress in fulfilling membership conditions, will be key to stimulating implementation. While in the short run the elections (both in Serbia and in the EU) are likely to cause some delays, I believe that normalization is indeed possible in the medium term.
The Key Story
Strategic trends
Vucic’s party gets absolute majority
in vote marred by irregularities
As expected, the ‘Serbia Must Not Stop’ coalition built around Serbia’s dominant populist party, the Progressive Party (SNS) of President Aleksandar Vucic, secured a decisive victory in the early parliamentary elections and in the local elections held in the Balkan country on December 17. However, political discord escalated amid accusations of irregularities and fraud, particularly in the local election race in the capital city of Belgrade. These allegations have sparked fresh tensions and led to protests that could bring to destabilization and escalation in a key-country in the region.
The nationwide elections on the 17th of December were held to choose the new Parliament, the administration in the Vojvodina province and in more than 60 municipalities across Serbia, including the pivotal capital city of Belgrade, home to around one-fifth of the entire population. The main challenger to the Serbian Progressive Party (SNS) was anticipated to be the ‘Serbia Against Violence’ coalition, a new alliance comprising pro-EU, liberal, and environmentalist parties. This coalition aspired to break the decade-long dominance of the SNS at the national level, but principally it aimed at securing victory in Belgrade, potentially dealing a significant symbolical blow to President Vucic.
However, the results proved to be a source of disappointment for the opposition, as Vucic secured yet another triumph.
According to official data released by the state-level Election Commission (RIK), the Serbian Progressive Party (SNS) secured approximately 46% of the vote in the parliamentary elections, translating into an absolute majority in 250-seats Parliament. The main opposition coalition, ‘Serbia Against Violence,’ (SPN) obtained nearly 24% of the vote, securing around 65 seats. The traditional allies of the SNS, the Socialist Party (SPS) led by FM Ivica Dacic, garnered only 6,5% of the vote. Two other coalitions, namely the conservatives-monarchists of NADA and a newcomer, the ultra-populist party of Dr Majstorovic, also managed to secure seats in the new Parliament. Other right wing and nationalist formations, including the Radicals of Vojislav Seselj, fell short of the 3% threshold required for entry.
Surprisingly, contrary to many analysts’ predictions of a different outcome in the most progressive, pro-European, and modern Serbian city, the capital Belgrade, the Serbian Progressive Party (SNS) emerged victorious even in the local polls in the city. The SNS secured 49 seats, surpassing the 42 seats won by the SPN, according to official data. Nevertheless, opposition leaders promptly asserted that the elections in Belgrade were marred by significant irregularities. They claimed, among else, that ethnic Serbs from neighbouring Bosnia were transported in large numbers to vote in Belgrade. Serbia Against Violence alleged that 40.000 identity documents were issued for individuals not residing in the capital city, purportedly to inflate votes for Vucic’s SNS. Additionally, there were accusations of voters being either remunerated or subjected to pressure to cast their votes in favour of the ruling party.
As a result, the leaders of SPN officially called for the annulment of the elections in Belgrade and demanded a re-run. Thousands of demonstrators supporting the opposition gathered in front of the Serbian state level Election Commission seat in downtown Belgrade on the 18th of December, responding to the opposition’s call to protest against the results. Protesters held banners with slogans such as “They stole our future,” while others chanted “Vucic go away.” Many demonstrators appeared visibly angry and there were signs of potential scuffles.
In the meantime, international observers from the OSCE Office for Democratic Institutions and Human Rights (ODIHR) have corroborated that the Serbian elections were tainted by severe issues, at least at national level. Germany and the USA, meanwhile, asked Belgrade to address concerns about irregularities. The OSCE report highlighted instances of harsh rhetoric, media bias, pressure on public sector employees, misuse of public resources, and irregularities. “Serbia has voted, but the OSCE-ODIHR report [about] misuse of public resources, voter intimidation and cases of vote buying” described a scenario that is “unacceptable for a country with EU candidate status,” said the German Foreign Office.
Despite Vucic (who was not running for any position, but was the main actor in the elections) consolidating his hold on power with a decisive victory, the 2023 vote has the potential to introduce severe instability in the country. Main opposition parties appear poised for a robust challenge, including the possibility of mass protests, to push for a re-run of the vote in Belgrade.
This situation could significantly impact the stability of the country and lead to delays in the formation of a new government, particularly at a delicate moment when Belgrade is under substantial pressure to engage in talks with Kosovo with the aim of reaching a lasting “normalization” agreement.
Further News and Views
EU keeps BiH on hold, Brussels focuses on ‘gradual integration’
Sources: European Commission, Euractiv, European Western Balkans, Radio Free Europe, Anadolu
In a historic and highly symbolic move, the European Union decided in December to begin accession negotiations with Ukraine and Moldova. However, a similar decision concerning Bosnia and Herzegovina was postponed to a later meeting, most probably at the beginning of 2024, subject to the country fulfilling necessary conditions related to reforms. This development has the potential to heighten mistrust towards Brussels, not just in Sarajevo but also throughout the Balkans. Many in the region perceive a sense of being left behind in favour of Kyiv, contributing to a growing sentiment of discontent.
The European Council decision to open accession negotiations with Ukraine and Moldova is “a landmark moment for the people of both countries, who have consistently shown their European conviction, even as Russia continues to wage its war of aggression against Ukraine and undermine democracy in Moldova,” the EU said. The EU leaders will open accession negotiations with Bosnia and Herzegovina “once the necessary degree of compliance with the membership criteria is achieved,” Brussels noted, while reiterating its commitment to the European future of the six Western Balkans countries still out from the bloc.
Before the European Council, several EU member countries, notably Austria, Slovenia, Croatia, and Italy, made unsuccessful attempts to advocate for the beginning of accession negotiations with Bosnia in December. Vienna, in particular, emphasized the importance of preventing a “geostrategic disaster” by avoiding a preferential path for Ukraine and Moldova that could lead to potentially neglecting the Balkans.
In December, during a new EU-Western Balkans summit, EU leaders also reaffirmed in a Declaration the new approach to keeping the Balkans closely linked to the EU prior to full integration. The concept of “gradual integration” is inherent to the EU’s new Growth Plan for the Balkans. This plan seeks to enhance economic growth and expedite socio-economic convergence between the Western Balkans and the EU, also extending some benefits of the EU’s Single Market to the region. The approach encourages the region to intensify the implementation of EU-related reforms and promotes regional economic integration through the Common Regional Market (CRM), thus aligning with EU rules and standards.
Serbia and Bulgaria completed gas pipeline to reduce dependency from Russia
Sources: Bloomberg, Deutsche Welle, Balkan Green Energy News, European Commission
Serbia and Bulgaria have successfully completed a gas interconnector to a pipeline in Bulgaria, providing Serbia with diversified gas supplies and potentially reducing dependence on Russia. The pipeline, spanning from Novi Iskar in Bulgaria to Nis in Serbia, will grant Belgrade access to gas from Azerbaijan and from the LNG terminal in Greece’s Alexandroupolis. A deal previously signed with Azerbaijan allows Serbia to purchase 400 million cubic meters of natural gas annually from 2024. The 170-kilometer pipeline has a capacity of 1,8 billion cubic meters per year, meeting 60% of Serbia’s annual gas demand. The EU supported the project with more than 60 million in grants and loans. Serbia, a non-EU member, has been in accession negotiations since 2014. The move marks a significant step in reducing Serbia’s historical reliance on Russian gas, providing alternative sources for the Balkan country.
EU - NATO
EU announces new 680-million investment package for the Balkans
Sources: EEAS, WBIF, EuroEFE
The European Commission introduced a new 680 million euros investment package for the Western Balkans, marking the sixth financial package under the EU’s Economic and Investment Plan. Envisaged to mobilize 16.6 billion in investments, the package focuses on sustainable transport and clean energy.
Rail transport projects include the reconstruction of the Corridor VIII railway line in Albania and rehabilitation of the Bar – Vrbnica railway line in Montenegro, aiming to upgrade the region’s railway transport to Trans-European Transport Network (TEN-T) standards and integrate it with the EU network.
In the clean energy sector, the package supports the construction of two wind farms in Bosnia and Herzegovina and a solar photovoltaic power plant in Albania. These initiatives align with the transition to low-carbon economies, promoting sustainability and regional development.
The investment package is part of the EU’s Economic and Investment Plan, trying to drive long-term recovery, facilitate a green and digital transition, and foster regional cooperation and alignment with the EU. The broader Economic and Investment Plan, adopted in October 2020, aims at mobilizing up to 30 billion in investments. Following this new investment package, the EU is expected to garner 16,6 billion, including 4,5 billion in EU grants, supporting 59 flagship investments under the Western Balkans Investment Framework.
ECONOMICS
EIB’s lending increases employment, investment and growth in the Balkans
Sources: EIB, ANSA
The European Investment Bank (EIB) has played a crucial role in the economic development of the Western Balkans, particularly through its support for Small and Medium Enterprises (SMEs) from 2009 to 2023, a new report revealed. The impact has been substantial, with SMEs reporting 15 additional jobs for every million of EIB-backed loans. These businesses also demonstrated higher investment levels, increasing fixed assets by 35% compared to similar firms without EIB support.
Importantly, the EIB’s influence on employment is more pronounced for businesses that previously had limited access to finance. This underscores the significance of the favourable market conditions provided by EIB loans in stimulating economic growth. According to the EIB study, SMEs benefiting from these loans experienced a 15% increase in employment growth and a corresponding rise in investments.
The findings highlighted the positive and transformative effects of the EIB’s engagement in the Western Balkans, contributing to job creation, increased investments and the overall economic advancement of the region.
Stefano Giantin
Journalist based in the Balkans since 2005, he covers Central- and Eastern Europe for a wide range of media outlets, including the Italian national news agency ANSA, and the dailies La Stampa and Il Piccolo.
