Diplomatic and economic ties between Serbia and Germany represent a nuanced and evolving relationship that is progressing steadily. This is most evident in the two countries’ economic cooperation, which has emerged as the bedrock of their relationship, providing stability even during times of political divergence
Germany is Serbia’s largest trading partner within the EU, with bilateral trade having grown steadily over the years. German companies, particularly those in the automotive and manufacturing sectors, have found Serbia to be an attractive destination for investment. Low labour costs and Serbia’s proximity to the EU initially made it an appealing hub for production, attracting companies like Siemens, Bosch and Continental. However, the focus has today shifted to more advanced levels of cooperation.
Germany has expressed interest in supporting Serbia’s green transition, which involves aligning with the EU’s sustainable energy and climate action priorities. This presents a promising avenue for collaboration as Serbia looks to diversify its energy sources and reduce its dependence on coal. Additionally, the digital sector is another emerging field in which the two countries can strengthen their ties. Germany’s expertise in innovation and digital transformation could complement Serbia’s growing tech industry, fostering partnerships that boost economic growth and modernisation.
The lithium exploration issue adds a new layer of complexity to current economic and political relations between Serbia and Germany
While Serbia and Germany have a complex relationship, it is one that continues to be shaped by a pragmatic blend of diplomacy and economics. Although Germany would like to see Serbia achieve more progress on reforms, including in more closely aligning its policies with those of the EU on sensitive issues like the war in Ukraine, both countries recognise that their strong economic ties enhance the resilience of their cooperation.
The new Strategic Partnership on sustainable raw materials signed between the EU and Serbia this July, with the support of Germany, has the potential to boost Serbia’s automotive industry significantly. This agreement is expected to attract even more European companies to Serbia’s growing automotive sector, further solidifying the country’s role as a key production hub in Europe.
However, this partnership has also prompted criticism among Serbia’s citizens, particularly concerning environmental issues. A central debate revolves around whether Germany will ensure adherence to the highest environmental standards in the case that lithium extraction is launched in Serbia, or if this responsibility primarily lies with the Serbian government, supported by Germany and other EU member states.
This development adds a new layer of complexity to the two countries’ current economic and political relations. However, Germany is expected to remain a critical ally to Serbia and a constructive partner in shaping the future of this relationship, offering both challenges and opportunities for deeper integration into Europe’s broader economic and political framework.