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The Government of the Republic of Serbia

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Kostunica opens “Days of Italy in Belgrade“

Belgrade, 10 October 2005

Serbian Prime Minister Vojislav Kostunica said today that Serbia-Montenegro will sign the Stabilisation and Association Agreement (SAA) with the EU next year and begin the second stage of the EU association process.

Vojislav Kostunica

Opening the plenary session of a business-cultural event themed “Days of Italy in Belgrade”, attended by representatives of 450 Italian companies, Kostunica pointed out that the process of Serbia-Montenegro’s EU association cannot be halted, adding that the question is no longer how but when it will join the EU.

He said that since the last year’s “Days of Italy”, Serbia has achieved magnificent results and Italy has become its leading foreign trade partner, and added that Serbia’s export to Italy has risen by 120 percent and import by 42 percent.

“It is the task of you as businessmen to cooperate, and of the Serbian government to provide a liberal and politically and legally stable business environment”, said Kostunica.

Kostunica said that with the aim of attracting foreign investment, Serbia has introduced favourable tax and customs rates that have already started to yield excellent results. He added that the Serbian government’s aims also include modernisation of economy, improvement of the living standard and stabilisation of institutions.

Italian Deputy Minister of Productive Activities Adolfo Urso pointed out that Italy supports Serbia-Montenegro’s EU integration process, since Serbia-Montenegro is, as he said, a partner of Europe.

Urso added that the event is being attended by more than one thousand Serbian companies, who will in turn have the opportunity to meet with representatives of Italian companies interested in doing business in Serbia. He pointed out that in the past 12 months, there has been a considerable increase in the volume of Italian investment in Serbia-Montenegro through the privatisation process.

Judging by the number of deals closed, Italy tops that list, Urso said, adding that by the end of the month Serbia-Montenegro will receive a €5 million tranche, the first instalment of a line of credit worth €33 million, approved by the Italian government for development of small and medium-sized enterprises in Serbia-Montenegro.

Miroljub Labus

Serbian Deputy Prime Minister Miroljub Labus said that the government will continue to improve the business environment and macro-economic climate, adding that the priority in the years ahead will be to reduce inflation. General conditions for investment in Serbia will be much better in a year’s time, he said.

Labus recalled that investment is a requirement for further development and that the advantages of investing in Serbia-Montenegro are its market size, agreements on free trade with countries in the region and with Russia, as well as its agricultural potential.

He expressed expectation that toward the end of the year Serbia-Montenegro will realise the agreement with the Paris Club of Creditors and that the issue of foreign debt will be resolved.

According to Labus, Italy and Serbia-Montenegro have made progress in trade relations, which are now closer to a more sustainable level of trade. He said that a year ago the ratio of import and export was less than 40 percent, whereas today it is more than 80 percent.

Serbian Minister of International Economic Relations Milan Parivodic announced that the government has clear aims regarding Serbia and it knows how to achieve them.

Parivodic said that Serbia aspires to become the economic centre of the Balkans, and that it is a profitable, stable and hospitable environment for all investors. He also expressed expectation that this year’s foreign investment will total $2 billion.

The World Bank report, according to which Serbia is among the leading countries in its success in the implementation of reforms, has been a surprise for many, but not for the Serbian government since it had put so much effort into achieving that goal, said Parivodic.

New legislation in Serbia has provided a better position for foreign investors, he pointed out, adding that it is now in line with European regulations, giving as an example the Law on Foreign Investment, which gives investors the rights that are expected when investing abroad.

Predrag Bubalo

The minister mentioned energy, infrastructure and telecommunications as potential areas for investment. He also said that serious work still awaits Serbia, including the modernisation of the judicial system.

Serbian Minister of Economy Predrag Bubalo said that the number of Italian businessmen attending the two-day conference confirms that Serbia is a secure investment target.

He said that attracting investors amidst tough competition in the region is a major success and retaining their interest an even bigger one, adding that the time is right for investing in Serbia because very soon the competition will be even tougher.