Serbia - Future Elections and the Path to Europe

The regional atmosphere seems to be heating up due to the parliamentary elections scheduled to take place in Serbia on December 17, 2023, to elect members of the National Assembly. Originally slated for April 30, 2026, Serbian President Aleksandar Vu?i? called for early elections, dissolving the parliament and announcing the third snap parliamentary elections in almost four years. Although formally stepping down from the leadership of his party, Vu?i? has been actively campaigning for his Serbian Progressive Party. The traditionally divided opposition parties have united under the slogan "Serbia Against Violence" after months of protests against Vu?i? and his government. The opposition accuses Vu?i? of creating an atmosphere of uncertainty in the country. The political landscape is further complicated by the ongoing dispute between Serbia and Kosovo, with EU leaders urging Serbia to "de facto" recognize Kosovo. Dialogues between the two nations have stalled, and both parties blame each other for the lack of progress, adding new challenges to the region.

The Serbian Progressive Party (SNS) came to power after the 2012 elections, forming a coalition government with the Socialist Party of Serbia. In the 2022 parliamentary elections, the SNS lost its parliamentary majority, while opposition parties returned to the National Assembly.

International publications closely monitor the situation in Serbia and have offered various perspectives on the elections:

The 2023 European Commission report emphasizes that, while there have been improvements in the judicial system in Belgrade, progress in the rule of law, combating corruption, fighting organized crime, and protecting freedom of expression in Serbia is limited. The document highlights the need for Belgrade to cooperate in the investigation of the Banjska case and implement agreements from the dialogue with Pristina. Although Serbia has increased alignment with the EU's foreign policy, no restrictive measures have been imposed against Russia, and certain actions and statements by Serbia are considered contrary to EU positions.

Regarding public administration reform, the report finds a moderate level of preparedness for EU accession, but progress in combating corruption is limited, with a national anti-corruption strategy awaiting adoption. In the fight against organized crime, especially in preventing migrant and human trafficking, progress has been limited. The assessment of freedom of expression is mixed, acknowledging the quick response to threats against journalists but expressing ongoing concerns about threats, intimidation, hate speech, and violence.

On the media sector, the report emphasizes the implementation of a media strategy but signals legislative gaps regarding media ownership, state aid rules, and mechanisms to protect pluralism and editorial independence. Political and economic influences on the media persist, with urgent measures recommended to counter anti-EU narratives, especially in the context of Russia's actions in Ukraine.

From an economic perspective, Serbia is considered prepared, with some progress in the past year. However, the report highlights an economic slowdown due to the conflict in Ukraine, impacting inflation and rising prices for food and energy. Despite a significant decrease in loans, improvements in introducing fiscal rules and maintaining the stability of the banking sector have been observed.

According to the data provided by the World Bank, the current state of Serbia's economy can be described as follows:

• Growth: Serbia's economic growth slowed in the first half of 2023 due to a slowdown in private and public investments, as well as high inflation. Economic growth for the entire year is estimated at 2%, with downward-oriented risks. In the medium term, the Serbian economy is projected to grow steadily, with an average annual rate of around 3-4%, supported by increased consumption and investments.
• Foreign Direct Investment: Foreign direct investment is expected to continue playing a key role.
• Inflation: Inflation is expected to gradually decrease as energy and food prices normalize.
• Poverty: Poverty in 2023 is estimated at 8%, down from 8.5% in 2022. The pace of poverty reduction has slowed due to slowing growth and erosion of citizens' purchasing power, with food and energy costs representing a significant proportion of consumption.
• Public Finances: Serbia's government debt was 51.4% of GDP in May 2023.
• Trade: Serbia's economy is service-oriented with upper-middle-income revenues, with the tertiary sector representing two-thirds of the total Gross Domestic Product (GDP).

The country's major industrial exports include automobiles, basic metals, furniture, food processing, machinery, chemicals, sugar, tires, clothing, and pharmaceuticals. In addition to economic issues, Serbia faces challenges related to unemployment (job creation and green transformation are common goals for all countries in the Western Balkans region, where economic growth is recovering after a COVID-19-induced recession in 2020), corruption (weak law; political interference in the economy; a slow judiciary subject to political pressure; legislative and regulatory unpredictability; real and perceived corruption issues; a complex and sometimes non-transparent bureaucracy; an opaque bidding process; and difficulties in collecting payments from public and private entities), emigration (migration of younger and qualified individuals), increasing centralization, rising non-performing loans, business illiquidity, very weak trends in the capital market, and stagnant incomes.

International IDEA has emphasized that elections in Serbia are taking place in a context of political polarization and a constant degradation of democratic standards. It mentioned that for the first time in two decades, the International IDEA Global Democracy Report for 2021 downgraded Serbia from a democracy to a hybrid regime. This is due to the constant deterioration of electoral standards, media integrity, government checks, and civil liberties.

The International Foundation for Electoral Systems (IFES) noted that elections in Serbia are taking place under a modified electoral legal framework adopted in February 2022, following two parallel inter-party dialogues facilitated by the European Union and the government, respectively. These changes are intended to improve the transparency of the electoral process and campaign financing, increase opposition representation in the electoral administration, establish mid-level electoral commissions, introduce additional measures to combat abuse of office and administrative resources, and regulate the status of electoral observers.

The 2022 Commission Report on Serbia referred to the conclusions of the National Assembly of the Republic of Serbia's Inter-Party Dialogue on Improving the Conditions for Conducting Parliamentary Elections, facilitated by the European Parliament.

These elections are crucial for the future political landscape of Serbia. The results will influence the direction the country takes in the coming years, including its relations with the European Union and other global powers. They carry several important significances:

• Power Shift: The elections may lead to a shift in power in Serbia, potentially significantly impacting the country's political direction. The Serbian Progressive Party (SNS), in power since 2012, lost its parliamentary majority in the 2022 elections.
• EU Relationship: Election results will influence Serbia's relations with the European Union. Serbia has been identified as a potential candidate for EU membership since 2003, but its progress has been criticized for a lack of reforms, rule of law issues, press freedom concerns, and geopolitical
• Regional Stability: The elections can impact regional stability. Serbia is a key country in the Western Balkans, and election results may affect its relationships with neighboring nations.
• Internal Reforms: The elections could lead to internal reforms in Serbia. Urgent reforms are needed in areas such as justice, public administration, and the economy.
• Democracy Test: The elections serve as a crucial test for democracy in Serbia. Concerns have been raised about the deterioration of democratic standards in the country in recent years.

Serbia has been identified as a potential candidate for EU accession since 2003. Since then, Serbia has opened 18 negotiation chapters and provisionally closed 2. However, Serbia's progress toward EU accession has been criticized for a lack of reforms, rule of law issues, press freedom concerns, and geopolitical misalignment. Given recent events in Serbia, there are several evolving trends worth considering:

• Tensions at the Kosovo Border: Serbia withdrew some of its troops from the Kosovo border after warnings from the U.S. and threats of punitive measures for what the White House called an "unprecedented concentration" of Serbian troops and weaponry. This suggests a potential escalation of tensions in the region.
• Mass Protests: Tens of thousands marched in Belgrade, blocking a key bridge in the second major protest following two mass shootings that shook Serbia and left 17 people dead, including many children. This indicates a growing public discontent and social tensions.
• Snap Elections: The President of Serbia dissolved the Parliament and set the date for early legislative elections. This could indicate a potential shift in the country's political dynamics.

Relationship with the European Union

The European Union is Serbia's most important trading and investment partner and a crucial factor in the country's economic stability. However, Serbia has refused to participate in all rounds of EU sanctions against Putin. Serbia's relationship with the European Union is complex and fraught with challenges. One of the major obstacles to Serbia's EU accession is the Kosovo issue. Serbia has refused to recognize Kosovo's independence, which occurred after they fought in a war in 1998-1999. This is a major issue hindering Serbia's EU accession.

In the past week, there have been several significant political developments in Serbia:

• Serbia and China signed a free trade agreement.
• The President of Serbia called for early elections on December 17.
• There have been escalating tensions between Serbia and Kosovo, with accusations of armed attacks.

The free trade agreement between Serbia and China could have several significant implications:

• Trade Increase: The free trade agreement could lead to increased trade between the two countries. Under the new free trade agreement, 10,412 Serbian products and 8,930 Chinese products will benefit, according to cursdeguvernare.ro . This means that once the agreement comes into effect, expected in May or June next year, citizens of Serbia and China will no longer pay customs duties on these products.
• Infrastructure Investments: The signed agreements include the construction of the "Osmeh Vojvodine" high-speed highway, expected to start in the coming months, with permits already issued for the first 5.5 kilometers. A second agreement was signed for the construction of a 105-kilometer highway connecting Belgrade, Zrenjanin, and Novi Sad.
• Political Implications: The agreement could have significant political implications. For example, the free trade agreement concluded by Serbia with China on October 17, praised by Serbian politicians, along with all other agreements signed on that day, will cease to apply in the event Serbia becomes a member of the European Union.
• International Relations: The agreement could affect Serbia's relations with other countries, including the European Union. For example, the free trade agreement concluded by Serbia with China violates EU accession rules .

International experts have identified several political risks in Serbia:

United Nations Human Rights Council (OHCHR): Irene Khan, the UN Special Rapporteur on Freedom of Opinion and Expression, emphasized that Serbia must ensure that legal reforms are accompanied by the effective implementation of laws and the political will to combat dangerous rhetoric against minorities, journalists, and activists. She was concerned about toxic public discourse, from politicians or public officials and amplified by tabloids, making scapegoats of the media, human rights defenders, ethnic minorities, LGBTI individuals, and those critical of the government.

Foreign Policy Research Institute (FPRI): It emphasized that Serbia is a firm ally of Russia and China, led by a semi-authoritarian government actively pursuing an irredentist ideological territorial expansion in the Western Balkans. Today's Serbia represents a threat to regional and transatlantic security.

Belgrade Centre for Security Policy: A study by this Serbian think tank found that 86% of Serbian citizens believe that engagement in public administration and state-owned enterprises can only be achieved through corrupt mechanisms.

UK Government: It mentioned that challenges and risks of investments in Serbia include bureaucracy, corruption, and slow response time from local authorities and government agencies. A key political risk is the potential for elections to be called outside of expected electoral cycles, delaying the implementation of economic, energy, and fiscal reforms.

On the other hand, an intelligence report from Hungary warns that the Taliban's intelligence service directly controls Afghan human trafficking groups in Vojvodina, Serbia, near the Hungarian border. The document also highlights the increasing terrorist threats in Europe, with the possibility that terrorist networks could use the Western Balkans migration route to undermine security and carry out attacks in Western Europe. The report suggests that the Taliban aims to take control of human trafficking for financing terrorist operations. The document links the situation to the conflict in Gaza, highlighting concerns about the use of the Balkan route by terrorists to enter Western Europe. Additionally, it mentions the political sensitivity of the Moscow-Belgrade link, with the potential to allow extremists to enter the EU undetected. The report has been made public and may be used for political purposes, shaping Hungary's narrative on migration ahead of European elections.

Conclusion

In light of recent political events in Serbia, the snap elections represent a moment of risk and potential transformation. The political context is tense, marked by extensive protests and social dissatisfaction, signaling an evident desire for change among the population.

These elections go beyond a simple democratic process and become a stage for subsequent changes in the political landscape. Given the polarized rhetoric and concerns about the health of democracy, Serbia is in a critical phase, where voters decide not only the composition of the parliament but also the future course of the country.

Issues related to relations with Kosovo and the European Union add complexity to the situation. In an unstable geopolitical context, the elections will influence not only interaction with the EU but will have significant implications in managing the persistent dispute with Kosovo.

Economically, the country faces challenges, including inflation and decreasing economic growth, and the recent agreement with China introduces an element of uncertainty in foreign relations. Despite these challenges, the elections present an opportunity to rethink and reform internal aspects, where voters decide not only on leaders but also on the direction Serbia will take in the near future.

Therefore, these elections become a battleground where not only politicians are the main actors, but the entire country shapes its destiny. Through each vote, Serbia carves its own path, with an impact not only on international relations and the economy but, above all, on its own political identity.