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Nicolas Marquier, Regional Manager for the Western Balkans at the International Finance Corporation (IFC)

Financing the Future

IFC, the largest global development institution, has provided almost $1 billion in financing to Serbia’s private sector over the past six years IFC, as a...

Dr Ivan Todorović, Todorović Law Firm

Dedicated Advisors and Tenacious Litigators

The Todorović Law Firm has existed for more than 30 years and throughout that time has demonstrated its unwavering dedication to continuously advancing at...

Marija Stojiljković, Founder, Royal Nanny

Children Deserve the Best Nannies

Royal Nanny offers a wide range of childcare services, primarily through mediating between professional nannies and families, providing responsible, meticulous, trained and caring individuals Starting...

Petar Miljković, CEO, 14. Oktobar d.o.o.

Employees are the Company’s Real Strength

This former Kruševac giant, which has come a long way over the course of 100 years of operations, developing from a construction machinery factory...

Ivana Bogdanović, Director of Marketing and Corporate Communications at Addiko Bank

CSR as a Longstanding Priority

In today’s world, where gaining the trust of clients is the most important aspect of a company’s business, CSR, or socially responsible operations, represents...

Jurij Bajec Ph.D., Special Advisor At The Economics Institute And Full Professor At The University Of Belgrade Faculty Of Economics

Open Balkan Is A Good Initiative

During times of great uncertainty and deeply disrupted international economic and political relations, Serbia should seek additional forms of economic connection that complement its strategic commitment to EU membership

Independently of the various scenarios of future relations with Russia, Serbia is already enduring the negative consequences of the Russian-Ukrainian conflict that are spilling over onto the Serbian economy.

Firstly, the Serbian economy is strongly integrated into the EU according to all economic parameters. The EU contributes over 60% to Serbia’s total foreign trade exchange and accounts for 70% of foreign direct investment, with EU partners operating around 24,000 companies in the country, employing close to 900,000 workers, while the largest part of the remittances of Serbian citizens – equating to approximately 8% of GDP – arrive from Germany and other European countries. The Serbian banking sector is also dominated by European-owned banks, while the Serbian dinar is pegged to the euro. The strong, longterm connection between the two economies has been established empirically: when the EU advances well in economic terms, that reflects positively on Serbia’s economic growth, employment and the standard of living of Serbian citizens. The opposite situation, however, also applies, which is precisely the case now.

Disrupted global supply chains, coupled with dramatic rises in energy and food prices, lead to a slowdown in investment activity and economic growth, pushing inflation and exerting pressure on the budgets of European countries. All these negative effects partly spill over to hit the Serbian economy. FDI inflows are already lower this year, the foreign trade deficit is increasing, inflation has exceeded 10%, alongside a pronounced increase in prices of food and energy, while interest rates on loans to businesses and households have increased. It is this year necessary to allocate a huge 1.7% of GDP to cover the interest on public debt repayment, while the cost of future borrowing on financial markets remains uncertain.

An important priority for the future government should be mitigating the ramifications of the energy crisis caused by the Russian-Ukrainian conflict, but also by the unprofessional managing of the domestic energy sector

That’s why it’s important, during such times of great uncertainty and deeply disrupted international economic and political relations, for Serbia to seek additional forms of economic connection that complement its strategic commitment to EU membership. One such form is the regional Open Balkan initiative, which – with its basic guiding idea of the free flow of goods, services, labour, capital and technology – strengthens all participating countries and increases their competitiveness internationally.

The future government’s second priority should be mitigating the ramifications of the energy crisis caused by the Russian- Ukrainian conflict, but also by the unprofessional managing of the domestic energy sector. The unacceptably poor management of the largest thermal power plant, which under normal conditions produces 40% of all electricity for domestic needs and export, has led to the need to make intervention imports at extremely high prices and unnecessarily spend hundreds of millions of euros that will ultimately be paid by Serbian citizens. Around two years and significant investments will be need to stabilise the situation. When it comes to gas prices, Serbia has a favourable three-year arrangement on the import of Russian gas, but that only covers three-quarters of the required amount, with the remainder needing to be paid at higher, market, prices. However, here again Serbia has unnecessarily aggravated the situation by failing to ensure the timely expansion of its own gas storage capacities, which forced it to secure the required quantities, at an additional cost, from Hungarian storage facilities. Finally, Serbia covers about 75% of its oil needs from imports, the main problem of which – at least for now – is represented by very high prices.

Considering that such unfavourable situations cannot change quickly, the Government must – at least temporarily – ease the operations of businesses and protect the living standard of citizens through tax breaks and controlling the prices of key energy sources, while simultaneously extending its interventions from commodity reserves and controlling prices of basic foodstuffs.

Comment by Zoran Panović

Diplomatic Twine

German politician Markus Söder promised to support Serbia on its EU journey. According to the German media, Söder is making “diplomatic twine” in his...

Branka Anđelković, Co-founder and Programme Director of the Public Policy Research Centre

An Even Bigger Grey Market?

In the case of workers of the platform employed in food production and passenger transport, the Open Balkan initiative might not contribute to the...

Čedanka Andrić, President of Trade Union Confederation NEZAVISNOST

Increased Competition Between Low-Paid Workers

Considering educational qualification and unemployment structures in Serbia, my opinion is that this measure could only increase the pressure on workers in Serbia to...

Jelena Jevtović, Serbian Association of Employers

Employers Will More Quickly Find Workers

The employing of citizens of these two countries in Serbia could ease the labour shortage problem, but fundamentally resolving it requires education system reform It...

Serbia Charts the Course to Smart Cities with Kragujevac Leading the Way

In a significant development for urban planning and technology in Serbia, a roadmap for smart cities was unveiled today...

Serbia, Slovenia, and Hungary Merge Power Exchanges in Energy Pact

In a significant move to streamline and enhance energy trading in the region, Serbia, Slovenia, and Hungary have unified...

Over Two Thousand Seek Employment in Serbia Through Open Balkan Scheme

Serbian President Aleksandar Vučić reported that, via the Open Balkan initiative's ID card system, 2,200 individuals have expressed their...

Peter Pellegrini Wins Slovak Presidential Election

Peter Pellegrini, the candidate from the ruling coalition, won the second round of the presidential elections in Slovakia, securing...

Strategic Energy Partnership Established Between Serbia and France

The Serbian Government adopted a Memorandum of Understanding between the Government of Serbia and French Electric Power Company (EDF),...

Peter Pellegrini Wins Slovak Presidential Election

Peter Pellegrini, the candidate from the ruling coalition, won the second round of the presidential elections in Slovakia, securing...

Strategic Energy Partnership Established Between Serbia and France

The Serbian Government adopted a Memorandum of Understanding between the Government of Serbia and French Electric Power Company (EDF),...

Serbia-France Innovation Forum Begins: Innovate for the Planet! Play Green!

At the Serbia-France Innovation Forum titled 'Innovate for the Planet, Play Green', which commenced at the Palace Serbia, French...

EU and EP Finalise €6 Billion Support for Western Balkans

The European Parliament and the Council of the European Union have finalised a deal to provide an additional six...

Zrenjanin Crowned Serbia’s Cultural Capital for 2025

In a ceremony held at the Serbian government, Zrenjanin was officially designated as Serbia's Cultural Capital for 2025. The...

Peter Pellegrini Wins Slovak Presidential Election

Peter Pellegrini, the candidate from the ruling coalition, won the second round of the presidential elections in Slovakia, securing...

Strategic Energy Partnership Established Between Serbia and France

The Serbian Government adopted a Memorandum of Understanding between the Government of Serbia and French Electric Power Company (EDF),...

Serbia-France Innovation Forum Begins: Innovate for the Planet! Play Green!

At the Serbia-France Innovation Forum titled 'Innovate for the Planet, Play Green', which commenced at the Palace Serbia, French...

EU and EP Finalise €6 Billion Support for Western Balkans

The European Parliament and the Council of the European Union have finalised a deal to provide an additional six...

Zrenjanin Crowned Serbia’s Cultural Capital for 2025

In a ceremony held at the Serbian government, Zrenjanin was officially designated as Serbia's Cultural Capital for 2025. The...
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