Three years after its last International Monetary Fund (IMF) deal was suspended over its budgetary profligacy, Serbia at last has a new €1.2bn package from the Fund, intended to stiffen resolve for a wave of privatisation and fiscal consolidation.
That is likely to prove the hard part, and investors are awaiting full details of promised reforms. Nevertheless, the Serbian government has repeatedly avowed its determination, and some of the assets coming up for sale should attract international interest. Read more
In the pale sunlight of an unseasonably warm December day, Chinese Premier Li Keqiang and Serbian Prime Minister Aleksandar Vucic on Thursday cut the ribbon to open the Mihailo Pupin Bridge, spanning the Danube in west Belgrade.
Logistically, the $170m, 1.5km bridge, built by state-owned China Road and Bridge Corporation, is intended to ease traffic in and around the Serbian capital. But Li’s visit to Belgrade has a considerably greater significance – the latest steps in China’s efforts to use the Balkans as a bridge to Europe. Read more
By Aleksandar Vucic, Prime Minister of the Republic of Serbia
Serbia recently began its accession talks with the EU and is firmly dedicated to its European path. This is a blessing to a country like Serbia, since its geographic position places us at a key strategic juncture between Europe and the Orient – and this role is becoming ever more prominent.
The first character in the Chinese words for Serbia and Serbian is pronounced sai. It translates as ‘place of strategic importance’. As Chinese characters so often do, it offers a remarkably concise and meaningful description of Serbia’s relationship with China and the world more broadly. Read more
By Alan Riley of City Law School
Following South Stream’s demise the Danube nations must look again at their energy vulnerability. These low income states, locked into antique energy infrastructure and facing high renewable bills, face a major energy dilemma – a dilemma shared, in a less acute form, with the rest of the European Union. One way forward is to look again at whether a deal on gas between Russia and the EU could be made to work as a means of encouraging economic growth and helping to settle the dispute over Ukraine. Read more
Serbia’s long-awaited new deal with the IMF should bolster investor confidence in the country but the substantial fiscal tightening that the Fund has prescribed will prove politically difficult to implement.
On November 20, the Fund announced a new 36-month standby agreement for Serbia worth around €1bn, with the package expected to be in place from January 1, pending final approval. The deal foresees Serbia reducing its budget deficit from 8 per cent of GDP in 2014 to between 4 and 4.25 per cent by 2016. Dusan Vujovic, Serbia’s finance minister, said this would require savings of around €1.3bn to €1.4bn. Read more
Serbia has received more than 1,700 letters of intent from potential investors for the 502 enterprises that it is lining up for privatisation, Zeljko Sertic, economy minister, has told beyondbrics in an interview.
Sertic said the government was seeking investors to develop Belgrade’s Nikola Tesla Airport and emphasised the government’s appetite for reform to boost the private sector, which some investors have started to question.
With talks with the International Monetary Fund starting this week, Sertic was keen to emphasise that Serbia had embarked on privatisation and fiscal tightening without external pressure. Read more
The last time an Albanian prime minister visited Belgrade, the Iron Curtain was just descending across Europe, rock and roll had yet to be invented and Pelé was just six years old.
In this context, the decision of current Albanian premier Edi Rama to delay his planned trip to Serbia by a mere two and a half weeks may not seem hugely significant. But Rama’s postponement comes after a spat triggered by an episode bizarre even by Balkan standards and in the wake of subsequent attacks on Albanian property in Serbia. Read more
Serbia’s prime minister has criticised his country’s culture of state handouts and its bloated public sector, vowing to create an economy of opportunity rather than one dominated by “charmed individuals”.
Aleksandar Vucic, a former ultra-nationalist elected in a landslide election victory in March, spoke to beyondbrics after announcing cuts in public sector salaries and pensions. Read more
After the deluge, the contraction. Serbia’s economy shrank by 1.1 per cent year-on-year in the second quarter after the country was hit by serious flooding that may have caused €1.7bn of damage.
May’s floods came just when the economy seemed to be picking up again and a new government was installed with a big majority and mandate for sweeping reform. The impact of the disaster has been felt across the economy and will weigh on full-year growth, now expected to be negligible. The shrinkage in the second quarter, reported in a flash GDP estimate from Serbia’s statistical office, followed a 0.1 per cent y-o-y rise in Q1. Read more
Vucic spreads his message of doom
Could Serbia become the Greece of the Danube and go bankrupt within a year, just as other European countries are having some success in grappling with their debt problems? That was the recent warning from Aleksandar Vucic, the country’s new prime minister, should his government fail to implement a package of tough economic reforms, including extensive privatisation and labour liberalisation.
Vucic’s doom-mongering is partly a signal to his electorate that there are hard times ahead. Serbia is indeed on a dangerously unsustainable trajectory. But it is not quite at the buffers yet. Read more
Serbia’s central bank cut its key policy rate by 50 basis points on June 13, twice the reduction expected and another bold monetary easing move. The National Bank of Serbia (NBS) has now lowered rates by a full 100 bp in two months. The NBS is taking advantage of low inflation and easing pressure on prices, and taking account of the recent radical policy action by the European Central Bank (ECB). But the cut should also be seen in the context of May’s devastating floods, which caused Serbia’s fragile recovery to grind to a halt and has shaken domestic and international confidence in the newly-elected government. Read more
By Adam Ereli, US ambassador to the Kingdom of Bahrain
A political earthquake shook Serbia on March 16, 2014. The Serbian Progressive Party (SNS) of Alexander Vucic took 48.6 per cent of the popular vote in general elections and secured 63 per cent of the seats in Parliament. For the first time in the post-Milosevic era, Serbia’s Prime Minister will have a strong mandate to govern.
A number of factors contributed to this seismic shift. Chief among them was public disenchantment with the venality and malfeasance of the country’s ruling class, which historically has placed self-interest ahead of the public good. Vucic’s rivals self-destructed through internal divisions and rivalries. Read more
By Aleksandar Vucic, Prime Minister of Serbia
A 19th Century American theologian and anti-slavery campaigner once wrote: “A politician thinks of the next election; a statesman of the next generation. A politician looks for the success of his party; a statesman for that of his country.”
James Freeman Clarke’s words are close to my heart, and he would doubtless have had stirring opinions on recent events in south eastern Europe. Read more
A landslide win for the ruling party in Sunday’s Serbian election provides a mandate for sweeping reforms including privatisations, changes to labour legislation and fiscal tightening in the country running Europe’s highest budget deficit.
But, as ever, actually implementing unpopular measures is likely to prove difficult, even with a hefty parliamentary majority. Read more
On January 15, 2000, 23-year-old Dobrosav Gavric strode into the lobby of Belgrade’s InterContinental hotel, pulled out a Heckler and Koch submachine gun and unloaded it into Arkan, one of the most notorious warlords and gangsters in the Balkans.
Arkan – real name Zeljko Raznatovic – died in the arms of Ceca, his “turbo-folk” singer wife, the other half of the First Couple of Serbian nationalism. The assassination seemed to typify Serbia in the wake of the Yugoslav wars: lawless, shamelessly violent and ruled by extremist kleptocrats. Read more
Serbia could privatise up to 100 state-owned companies and enact wide-ranging reform of the business environment if the government is re-elected in next month’s general election, Ivica Dacic, prime minister (pictured), has told beyondbrics in exclusive comments.
But can he deliver? Read more
Ivica Dacic (left) with José Manuel Barroso, EC president
By Harriet Salem of bne
Serbia may have opened its EU accession talks on January 21 but the bloc’s stringent restrictions on smoking have not yet permeated the Serbian Embassy on Boulevard du Regent in Brussels. Reclining in a large armchair, Ivica Dacic, Serbia’s prime minister and leader of the Socialist Party, puffs on a fat cigar to celebrate what he describes as “the most momentous and most important day for the country since the end of World War II.” EU officials reciprocated by lavishing praise on the Serbian government’s work over the last 18 months.
But on the home front the situation is less then ideal. Read more
Just over a decade ago, in the wake of the bloody Yugolsav Wars, Serbia was regarded as a pariah by many European countries. Next month, it will start negotiations for membership of the European Union.
A rogue state no more, the beginning of formal talks on a wide range of policy areas (“chapters”) indicates how far the country has come. But the way ahead is not an easy one, entailing many years of difficult reforms. Read more
Serbia’s national bank has delivered an early Christmas present to borrowers with another interest rate cut, its third in succession.
The move comes as talk of a snap election next year intensifies, raising concerns about the short-term economic outlook and the future of the government’s promised austerity measures. Read more