BRUSSELS — Serbia faces losing up to €1.5 billion in EU funding as the European Commission weighs pulling the plug over democratic backsliding and the country’s close ties with Russia.
The Balkan nation isn’t a member of the EU, but having launched talks to join in 2014 it is eligible for funds and grants to help it push through legal reforms. A decision to suspend payouts would further complicate the EU’s so-called enlargement process, with countries like Ukraine and Montenegro racing to join but influential nations like France urging caution.
“We are increasingly worried about what is happening in Serbia,” European Enlargement Commissioner Marta Kos told POLITICO. “From laws that undermine the independence of the judiciary to crackdowns on protesters and recurrent meddling in independent media.”
The Commission is assessing if the country still fulfils the conditions for “payments under the EU’s financial instruments,” Kos said.
A push has been growing within the Commission in recent weeks to withhold the cash, said four EU officials working with enlargement countries who were granted anonymity to speak frankly. The EU has publicly criticized judicial reforms pushed through by Serbian President Aleksandar Vučić, whose government has faced widespread protests.
Danijel Apostolović, Serbia’s ambassador to the EU and chief negotiator with the bloc, told POLITICO he was “confident that we will not reach that point” of a funding suspension, and “we are not giving up on full EU membership.”
Belgrade remained engaged in intensive discussions with the Commission, Apostolović said.
A package of laws to restructure the courts and change how judges and prosecutors are appointed were a “serious step back” for Serbia, Kos warned when they were announced.
The Venice Commission, a legal advisory body at the Council of Europe, is set to give an expert opinion on Serbia’s controversial law changes at the end of the month.
That opinion could be the impetus for the Commission to freeze funding for Serbia, signaled two of the EU officials POLITICO spoke to. Kos said she would demand that Serbia “align its judicial laws with the Venice Commission’s recommendations.”
Belgrade has “clearly communicated” it will follow the recommendations of the Venice Commission “as soon as they are received,” Apostolović said.
Russian tightrope
The EU is the largest provider of financial support to Serbia and allocated more than €586 million in non-repayable grants from 2021-2024. It has made as much as €1.5 billion more available conditional on reforms. According to the Serbian government, the country has received more than €7 billion in funds and investments from the EU since 2000.
But Serbia has long walked a precarious tightrope in its relations with the EU, courting closer ties with Moscow at the same time as it receives money from Brussels.
Sofija Todorović, director of Balkan human rights NGO YIHR, told POLITICO that media freedom and rule of law in Serbia were on “life support” due to the government’s pressure on journalists, and called on the Commission to intervene “before almost complete darkness reigns in Serbia.”
The EU’s patience with Belgrade has worn thin in recent months, with a scathing report on the country’s enlargement progress last November warning of backsliding and “an anti-EU narrative” at the “highest levels” of Serbian politics.
Tensions flared further in December when President Vučić snubbed an EU-Western Balkans summit. Vučić, who has maintained close ties with Moscow throughout its war with Ukraine, bemoaned the sluggish pace of negotiations for EU membership.
In a joint article with his Albanian counterpart in February he said he would prefer to pursue closer economic alignment with the EU, such as joining the single market and free travel zone, rather than full political membership. Kos rejected those proposals, arguing that significant reforms would still need to be delivered to make that happen.
Then, last month, Serbia came under fire over reports of violence and irregularities during local elections, along with a police raid on a university that saw hundreds of students clash with law enforcement.
An EU official said those recent events, along with Serbia’s continued cooperation with Moscow, had proven to be a tipping point for Brussels’ relations with Belgrade and had triggered a toughening of the EU executive’s stance.
“As a candidate country, we also expect Serbia to stand with us on foreign policy and align more closely with our positions,” Kos told POLITICO, without explicitly mentioning Russia.
