European Western Balkans
European Integration

Key findings of the 2018 European Commission report on Serbia

Serbia and EU flags; Photo: European Council

BRUSSELS – The European Commission published today the country reports for the six Western Balkans states and Turkey. Here we present the key findings in the country report on Serbia.

Political criteria

Serbia held presidential elections in April 2017. International observers found that the elections provided voters with a genuine choice of contestants, but that the playing field was tilted by several factors. The recommendations of international observers need to be fully addressed, including those related to the transparency and integrity of the election process during the electoral campaign.

Following the resignation of Prime Minister Vučić after his election as President, the new government, headed by Ana Brnabić, took office in June 2017. For the first time, a woman was elected Prime Minister. The parliament still does not exercise effective oversight of the executive. Transparency, inclusiveness, and quality of law making need to be enhanced and cross-party dialogue improved. The use of urgent procedures should be reduced. Actions which limit the ability of the parliament for an effective scrutiny of legislation must be avoided. The role of independent regulatory bodies needs to be fully acknowledged. Constitutional reforms are needed for alignment with EU standards in some areas.

Serbia is moderately prepared in the area of public administration reform. Some progress was achieved in the area of service delivery and with the adoption of several new laws. Serbia needs to implement its reform targets, professionalise and depoliticise the administration, especially regarding senior management positions, and ensure systematic coordination and monitoring of the public financial management reform programme 2016-20. Serbia’s ability to attract and retain qualified staff in the administration dealing with EU issues will be crucial.

Serbia’s judicial system has some level of preparation. Some progress was made, notably by reducing the backlog of old enforcement cases and putting in place measures to harmonise court practice. Improved rules for evaluating professional performance of judges and prosecutors were adopted. The scope for political influence over the judiciary remains a concern. A new draft of amendments to the Constitution in the domain of the judiciary was published in January 2018 and was put forward for public discussion before being sent to the Venice Commission for its opinion.

Serbia has some level of preparation in the fight against corruption. Some progress has been achieved, especially in adopting amendments to the Criminal Code in the economic crimes section; to the law on the organisation of state authorities in the field of fight against corruption, organised crime and terrorism; and to the law on seizure and confiscation of proceeds of crime. However, there is a serious delay in adopting the new law on the Anti‑Corruption Agency. Corruption remains prevalent in many areas and continues to be a serious problem. Operational capacity of relevant institutions remains uneven. Law enforcement and judicial authorities still need to prove that they can investigate, prosecute and try all high level corruption cases in an unbiased and operationally independent manner.

Serbia has some level of preparation in the fight against organised crime. Some progresswas made in areas such as human resource management in the Ministry of the Interior and the police. The operational capacity in both the Prosecutor’s Office for Organised Crime and the Prosecutor’s Office for Cybercrime was improved. A new strategy and action plan to prevent and fight trafficking in human beings were adopted, a National Coordinator for Combating Trafficking in Human Beings was appointed, and a new Law on the Prevention of Money Laundering and Terrorist Financing was adopted. However, Serbia has yet to establish an initial track record of effective financial investigations, as well as of investigations, prosecutions and final convictions in money laundering cases. The number of convictions for organised crime remains low. Serbia needs to focus on the implementation of the action plan agreed with the Financial Action Task Force (FATF).

The legal and institutional framework for the respect of fundamental rights is in place. Its consistent implementation across the country needs to be ensured, including as regards protection of minorities. While Serbia has some level of preparation, no progress was made on freedom of expression,a matter of increasing concern. Further sustained efforts are needed to improve the situation of persons belonging to the most discriminated groups (Roma, LGBTI persons, persons with disabilities, persons with HIV/AIDS and other socially vulnerable groups). A gender equality law needs to be adopted.

Serbia overall remained constructively committed to bilateral relations with other enlargement countries and neighbouring EU Member States and an active participant in regional cooperation.

Regarding the normalisation of relations with Kosovo, Serbia has remained engaged in the dialogue. However, Serbia needs to make further efforts and contribute to the establishment of circumstances conducive to the full normalisation of relations with Kosovo.

Serbia continued to manage the effects of the migration and refugee crisis. Serbia is in the process of negotiating with the EU the status agreement on actions to be carried out by the European Border and Coast Guard Agency in Serbia.

Serbia adopted a new law on asylum and temporary protection, a law on foreigners, and a law on border control. A strategy and an action plan for 2017-2020 to counter irregular migration needs to be adopted. In this context, Serbia needs to put in place a robust return mechanism for irregular migrants, in line with EU requirements, as well as to align its visa policy progressively with the EU’s. Stronger coordination among the various state authorities involved in migration management has to be ensured. Serbia continued to cooperate with neighbouring countries and Member States, in particular at technical level, and made substantial efforts to provide shelter and humanitarian supplies, primarily with EU support. Serbia needs to increase its capacity to address special reception needs of unaccompanied minors.

Economic criteria

Serbia is moderately prepared in developing a functioning market economy. Good progress was made in addressing some of the policy weaknesses, in particular with regard to the budget deficit. Growth fundamentals are sound and macroeconomic stability was preserved. Inflation was contained and monetary policy supported growth. Labour market conditions improved further. However, government debt is still high and the budgetary framework and its governance need to be strengthened. Major structural reforms of the public administration, the tax authority, and state‑owned enterprises remain incomplete. Informal employment, unemployment and economic inactivity remain are still very high, particularly among women and youth. The private sector is underdeveloped and hampered by weaknesses in the rule of law and the enforcement of fair competition.

Serbia is moderately prepared to cope with competitive pressure and market forces within the Union. Some progress was made to increase competitiveness. However, the level of investment activity is still below the economy’s needs. Despite some improvements, companies face a number of challenges, including an unpredictable business environment, a high level of para‑fiscal charges, and difficult and costly access to finance.

EU legislation

As regards its ability to assume the obligations of membership, Serbia has continued to align its legislation with the EU acquis across the board. Adequate financial and human resources and sound strategic frameworks will be crucial to maintaining the pace of reforms. Serbia has a good level of preparation in areas such as company law, intellectual property, science and research, education and culture, and customs. Serbia improved linking its investment planning to budget execution but has yet to develop a single mechanism for prioritising all investments regardless of the source of funding in accordance with the government’s public finance management reform programme. In areas such as public procurement, statistics, monetary policy and financial control, Serbia is moderately prepared. Serbia needs to progressively align its foreign and security policy with the European Union’s common foreign and security policy in the period up to accession. Serbia needs to address, as a matter of priority, issues of non-compliance with the SAA, regarding in particular restrictions on capital movements, state aid regulation, fiscal discrimination on imported spirits and restrictions on waste exports.

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