Serbia and the EU

1
Serbia and the EU

• Boidar DjelicDeputy Prime Minister of Serbia
• Hellenic Foundation for European and Foreign
  Policy (ELIAMEP)
• Athens, March 31st, 2008

2
SUMMARY

• Major achievements in 2007 and the European
  Agenda for 2008
• Macroeconomic stability and growth
• Numerous opportunities in strategic sectors

3
The European Integration process has been the
major challenge for Serbia since 2001
1/2

• Serbia started the SAA negotiations in October
  2005 and successfully completed them in September
  2007. The SAA was initialed on November 7th, 2007
  in Brussels
• Since 2001 Serbia has been actively working on
  the harmonization of its legislation with the
  acquis communaitaire. The Government is now in
  the final stage of preparing the National Program
  of Integration
• The overall speed of the integration process is
  primarily determined by the political
  constellation

4
The European Integration process has been the
major challenge for Serbia since 2001
2/2

• Political requirements, besides the full
  cooperation with the ICTY, include long-term
  political and economic stability of the country
• The unilateral declaration of independence of
  Kosovo has further complicated the bilateral
  relations between Serbia and some EU member
  states
• Serbia must remain committed to its European
  future for it not only ensures its long-term
  success in all areas, but it is the best chance
  we have to preserve our sovereignty and
  territorial integrity in Kosovo and Metohija

5
The Government has continued Serbias European
Integration process

• The EU Justice, Liberty and Security Mission
  identified key priorities and tasks in the
  process of judiciary and security reforms the
  preliminary report will be presented on April 4th
  in Belgrade
• Serbia continued the dialogue on full visa
  liberalization and the third round of talks is to
  be held in April in Brussels
• The issuing of new biometric Serbian passports is
  scheduled to commence in the end of April
• The plenary session of the Enhanced Permanent
  Dialogue with the European Commission will be
  held on April 4th in Belgrade
• The IPA 2007 Financing Agreement is to be signed
  in the beginning of April 2008

6
Serbia needs a clear and unequivocal support of
the EU

• Acceleration of the visa liberalization process
  presentation of the roadmap by the end of April
  and the abolishment of visa regime for Serbian
  citizens by the end of 2008 at the latest
• Signing of the SAA as soon as possible Serbia
  has full administrative capacities for the SAA
  implementation laws needed for the
  implementation are awaiting ratification by the
  new Parliament
• Granting Serbia the candidate status by the end
  2008
• Financial assistance for Serbia has been
  increased current assistance under the IPA
  mechanism amounts to EUR 190 million annually for
  the period 2007-2011

7
Macroeconomic stability and growthGDP

• GDP growth is the highest in the region
• An average growth for 2001 2006 period is 5.3

Source National Statistics Office Estimation
8
Macroeconomic stability and growthInflation

• The inflation rate is stabilizing after 2001
• The inflation in 2007 was result of supply side
  shocks oil price, drought

Source National Statistics Office
9
Macroeconomic stability and growth Foreign trade

• Export growth rates are among the highest within
  the transition countries
• Foreign trade deficit amounts to 6.9 bil. in
  2007 (22.8 of GDP) due to huge imports of
  capital and intermediate goods ( 8.3 bil.)

Source UNCTAD
10
Macroeconomic stability and growthForeign direct
investment

• Significant increase in FDI has been recorded
  since 2001
• According to preliminary results FDI in 2007 were
  mostly greenfield (2 bil.)

Source National Bank of Serbia Preliminary
results
11
Macroeconomic stability and growthForeign debt

• With foreign debt of 57.2 of GDP in 2007,
  Serbia is ranked among moderately indebted
  countries

Source National Bank of Serbia, Ministry of
Finance and National Statistics Office
Estimation
12
Macroeconomic stability and growthPublic debt

• Public debt decreased in 2006 and in 2007 fell
  well below Maastricht criteria (60 )

Source Ministry of Finance Estimation
13
Macroeconomic stability and growthForeign
currency reserves

• Foreign currency reserves reached a record level
  in 2007
• Foreign reserves/imports of goods and services
  ratio was 8.3 in 2007, the highest in the region

Source National Bank of Serbia
14
Numerous opportunities in strategic
sectorsAdequate framework

• Ongoing harmonization with the EU Acquis
• Sector specific legislation, property
  legislation, etc
• Corporate income tax rate 10
• Personal income tax rate 12
• 10-year tax holiday for large investments
• Subsidies for hiring new employees
• Tax credit for investing in fixed assets
• Up to 80 of the investment amount
• Accelerated depreciation

15
Numerous opportunities in strategic
sectorsFramework or new schemes underway

• IPO strategy, legal framework and pilot projects
  envisaged for 2008
• PPP law and pilot projects envisaged for 2008
• Investments in infrastructure - 3 to 5 bil. per
  year (Belgrade by-pass, Highway Nis-Bulgarian
  border, Highway Leskovac-Pancevo and the Pancevo
  Bridge, Corridor X, Highway Horgos-Pozega)
• Energy sector - 2 bil. (Construction of power
  plants Kolubara B, TENT (700 MW) lignite fired
  TPP and Novi Sad cogeneration capacity)
• IPO for EPS envisaged for 2010
• Air transport (Privatization of JAT Airways, JAT
  Tehnika, Cargo center construction, and IPO for
  Belgrade Airport envisaged for 2009)
• Telecommunications (IPO for Telekom Srbija is
  envisaged for 2008)

16
Thank you !kabinet.potpredsednika_at_sr.gov.yu