This piece was originally published on BiEPAG blog
German chancellor Olaf Scholz’s visit to Belgrade, together with the outgoing Vice-President of the European Commission in charge of the Green Deal, Maroš Šefčovič, was a strange affair. There was little advance notice concerning the visit itself, or the document that would be signed. Considering that Šefčovič is part of the outgoing Commission makes the matter even more unusual. During the visit, the EU signed a MoU on a strategic partnership on raw materials with the Serbian government.
The main purpose is to kick-start the project of Rio Tinto, a multinational mining company, to extract lithium in the Jadar valley in Western Serbia. The project was stopped by the Serbian government in late 2021 after massive citizens’ protests. Vučić and his government first dismissed the protests and sent out thugs to beat protestors. However, the project was stopped as it was seen as a sensitive issue ahead of the of snap elections in 2022. Prime Minister Ana Brnabić declared in January 2022 that “With this decision, as far as the Jadar project and Rio Tinto are concerned, everything is over. It’s over.”
However, it was not over. Vučić called himself the “stupidest president in the world” for stopping the deal, suggesting that the decision was hardly final. In early 2024, once (yet another) elections were over and Vučić declared that there would not be any snap elections in the forthcoming period – which had been a habit of the current regime – the government signaled that it would restart the project. By April, Vučić told the Financial Times that the project was back on track.
When the Constitutional Court decided on July 11 that the original annulment was unconstitutional, the government immediately restarted the project. Of course, the content and timing of the Court decision is a proper illustration of the “independence” of Serbian institutions. This is where the EU and Germany come in. As far back as in 2021, Germany and the EU signaled support for the mining project. The signing of the MoU and the visit of Scholz and Šefčovič are the most direct and public displays of support for the mining project to date. The fact that the summit takes place just over a week after the Court paved the way for the project to restart should raise some alarm bells.
Since 2022, Serbia held two rounds of parliamentary elections, both marred by serious irregularities, as well as local elections that saw massive voter fraud. Since 2015, there has not been a year without massive protests against the Vučić regime, including the largest rallies in Serbia since the fall of Milošević, in the summer of 2023, triggered by two mass shootings in and around Belgrade.
The claim by chancellor Scholz, that the project was “good because it will be developed in an environmentally compatible way, and is good because it creates economic activity and prosperity” is dubious. While the MoU commits Serbia to best practices on environmental, social and governance standards, there are serious doubts.
Firstly, Serbia has no independent institutions that could monitor the implementation of such standards. Since taking office, the Serbian Progressive Party (SNS) has systematically taken over all state institutions and none of them are able to act independently of the ruling party and the president. Thus, there are no domestic institutional safeguards. There is furthermore no reason to believe that this would change, considering the centrality of state capture to the ruling party’s system of rule.
Secondly, there is no space for public debate and critical voices in Serbia. While there are a few independent media, they lack national reach and are demonized by media outlets controlled by the government or run by private businesses close to the ruling party. Any criticism of the ruling party, President Vučić or their key policies, is met with ad hominem attacks, smear campaigns and hate speech. Thousands of bots on social media controlled by the ruling party amplify these messages. Thus, a critical scrutiny of the project implementation in the public sphere is impossible.
Thirdly, the EU is unlikely to be an independent monitor of the standards. Clearly, the project is motivated by its interest to develop lithium capacities independently from China and as a result, there has to be serious questioning of whether the EU will insist on environmental and social standards in Serbia. If it does, there are doubts about its capacities.
Fourthly, the environmental and social track record of other projects in Serbia is dismal. Several investments in mining by Chinese companies have resulted in high pollution levels and slave-like conditions for imported labor, both in conflict with Serbia law. At the same time, Serbian authorities protected the projects and their investors. Considering the scale of the investment, there is little reason for it to be different in this case.
Finally, the deal is often seen through a misleading geopolitical lens. By linking Serbia to the EU, it may seem that Serbia is wooed away from other investors and global actors, such as China. However, Vučić has perfected his geopolitical game. While the domestic rhetoric of his media and acolytes is nationalist and anti-Western, he seeks to maximize the ‘art of the deal’ with as many global actors as possible, to ensure his own wiggle room. Thus, the regime has been seeking to make sure it has as few external conditions and restraints as possible.
Thus, there is little reason to believe that Germany’s and the EU’s endorsement of the Rio Tinto mine will help protect environmental or social standards and avoid graft and further empowerment of the ruling party. In fact, Scholz’s visit and the agreement ignores the protests, the election fraud, and state capture. It effectively buries EU integration in the Western Balkans, as it shows that the EU’s economic interests will trump rule of law and democracy. Believing that other Western Balkans governments are not taking note would be naïve. In the end, those who took to the streets in Serbia and across the region in protest against having nature devastated by ruthless investors and complicit states, will be left feeling more abandoned. And guess what? They are unlikely to turn to the EU for help or support.