Central Europe Activ

In the run-up to Serbia’s election, the EU offered a Stability and Association Pact to the country. The same day Italy’s Fiat signed a memorandum of understanding with Serbia launching a strategic partnership and joint 700-millio-euro investment on car maker Zastava. Serbian Deputy Prime Minister Bozidar Djelic said that Serbia’s agreement with the EU and the agreement with Fiat are connected. In other words, it is claimed that if the winner of Serbia’s divisive election will not recognize the country’s association pact with the EU, the Fiat deal will be void, too.

Serbia’s outgoing nationalist prime minister, Vojislav Kostunica called for an early vote after the recognition of Kosovo’s independence by the majority of EU members. He claims that the Serbian electorate must choose between Kosovo and Europe, and he says once he is re-elected he will nullify the EU pact.

Bets on Zastava or Serbia?

I am a bit skeptic on both sides of the story: Mr. Kostunica wants to confront the Serbian electorate with a non-existing alternative. It is very unlikely that Serbia will regain sovereignty over Kosovo, and it is also very unlikely that the Serbian people will not want to join EU at one point. It looks as if Europe have realized it that the dominant country of the former Yugoslavia, which was once the richest country of the Communist bloc, is too important to loose as a prospective member and a European ally. This makes the deals look bluffs.

The EU is looking desperate not to make an enemy or a Russian satellite-state out of Serbia. When last polled, the majority of the Serbian people were pro-Europe, and it is still very unlikely that Serbia will not join the EU in the long run. The ties of the Fiat-deal may not be stronger than the ties of recent Russian acquisitions in Serbia. Though it was said at the time when Serbia sold off substantial assets to Russian investors that this is an alternative to European economic integration, the Russian owners quickly became interested in Serbia’s EU membership: the cheaply bought assets would reap a larger profit in a stable political and economic zone. The argument works in both ways: I doubt that Fiat would throw away such an investment opportunity should the radicals win the election and stay out from European integration in the next few years.

Link: EurActiv on the Serbian-EU deal. Photo: Zastava car factory.

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