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The Government of the Republic of Serbia

In the service of citizens

Austria wants more intensive bilateral trade relations with Serbia

Belgrade / Vienna, 6 July 2005

Serbian Minister of Economy Predrag Bubalo talked today with Austrian Minister of Economics and Labour Martin Bartenstein about the economic cooperation between the countries so far and about the required steps for Serbia-Montenegrin EU accession.

Following the meeting, Bubalo said that both Ministers have welcomed the countries’ economic cooperation in the past two years, adding that they also discussed requirements for Serbia-Montenegrin EU integration, which is one of Serbia’s most significant aims.

He recalled that Austrian businessmen are the most active ones in the Serbian market and voiced hope that with the capital they have so far invested in Serbia, they will soon take up the top position, currently held by the USA.

In a statement following the meeting, Bartenstein said that Austrian companies have invested €840 million in Serbia-Montenegro as yet, and the goods exchange between the two countries has doubled, amounting to about €550 million from 2000 onwards.

The statement continues by saying that last year Austrian companies exported €438 million worth of goods to Serbia, which is 14.5 percent more than in 2003. Imports from Serbia-Montenegro rose by 42 percent and amounted to €112 million, and the number of Austrian companies’ representative offices in Serbia-Montenegro rose to 160.

Bartenstein said that according to this economic data, Austria has overtaken Slovenia and the US and become the biggest investor in Serbia-Montenegro, adding that Serbia is an important business partner in the Danube region with which Austria wants to intensify bilateral trade relations.

He pointed out that Austrian companies have particularly beneficial investment opportunities into infrastructure and environmental protection.

During his visit to Austria, Bubalo will address participants of a summer camp organised by the Diplomatic Academy in Vienna, and meet with representatives of the 15 largest Austrian companies.

Last night in Vienna, Bubalo also talked with Serbian businessmen working in Austria and pointed out that Serbia’s top priority is EU accession.

He said that Serbia should join the EU when it is completely prepared. The country’s non-EU status also offers certain economic opportunities, he added and recalled that for the same reason, numerous companies from the EU have been moving their production facilities into Serbia.

Speaking about the state of the Serbian economy, Bubalo stressed that mistakes leading to a huge deficit in foreign trade have been made in the past. However, he recalled that last year was marked by a considerable increase in GDP and industrial production, primarily resulting from agriculture and privatisation.

Bubalo pointed out that completion of the privatisation process is indispensable, and added that companies which were first privatised were much more attractive than the ones currently awaiting privatisation, since the latter are huge industrial systems and companies mired in problems.

Bubalo expects 2005 to be a record year in the privatisation process and revenues to reach €2 billion.

He told the businessmen that the Serbian government has managed to halt the budgetary deficit, adding that the 2003 deficit was four percent, last year it was 1.7 percent, whereas this year’s was projected to be 1.5 percent, though there are indications that Serbia will have a surplus after all. Money from the privatisation process no longer goes to the budget, and the surplus is achieved by tax revenues, he concluded.