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The Government of the Republic of Serbia

In the service of citizens

Serbia will not give up its EU road

Belgrade, 18 September 2008

Serbian Prime Minister Mirko Cvetkovic said in an interview for today’s edition of the Vecernje Novosti daily that Serbia is not changing its course and is staying firmly on the track leading to the EU, because this is the road to better life for its citizens.

Mirko Cvetkovic

Author: www.novosti.co.yu

The Serbian government’s official web site gives the interview in full:

The transitional trade agreement with the EU remains frozen despite optimistic announcements by the government that it might be unfrozen in September:

These optimistic announcements stemmed from our belief, which proved to be right, that almost all EU countries look very favourably on the government’s work so far and that we have the support of a large number of important countries.

That was obviously insufficient. The Holland said “no” because Mladic and Hadzic are not in The Hague:

As for our cooperation with The Hague, Chief Prosecutor Serge Brammertz very clearly gave a positive assessment to the EU Council of Ministers. However, I believe that the Dutch stance was motivated by an interior political matter concerning events in Srebrenica, because at the time Dutch units were in charge of that area. Therefore they probably look at Serbia’s cooperation with The Hague differently. I expect the Netherlands to endorse Serbia soon, as well.

How is it possible to expect the agreement to be unfrozen under such circumstances, which the Deputy Prime Minister expects to transpire in December?

I am absolutely optimistic that the agreement will be unfrozen. I would not give any deadlines now, but I expect it to come about in the near future.

Will Serbia accept Brussels’ recommendation and begin with the unilateral implementation of the transitional agreement?

Europe has done a great deal. The European market is open to us until 2010. We are seriously considering starting with the unilateral implementation of the agreement, although it is formally still frozen.

What will Serbia get with the transitional agreement?

Our goal is to get closer to the EU code of behaviour. That system has already improved economic efficiency of other countries. That is what we strive to and it is not hot air or an abstract desire. It is a path to a better life for our citizens.

Is Serbia discouraged by the new barrier Brussels has imposed?

No. We still have to adjust our system to the European one, which ensures results.

Isn’t Europe’s message that Serbia can implement the agreement unilaterally a bit cynical?

It is not a cynical message, but a well-intentioned one. It is an asymmetrical agreement: the stronger partner – the EU – opens the market to the weaker partner – Serbia – and Serbia does the same towards the EU. The point of unilateral implementation is to begin opening trade branches towards Europe at once, just as if the agreement were unfrozen. Since we have already been given the opportunity to enter their market, it means that even if the agreement were unfrozen, Europe would not be the active participant in these respect, but Serbia.

And yet, without the “bilateral” transitional agreement Serbia cannot ask for EU candidate status:

That’s right. We do not have that possibility until the agreement comes into force. Once it does, we will send our request for candidacy. Here we can see Brussels’ good will that Serbia should start on its own at once.

Can we acquire EU candidate status before the SAA formally comes into force?

We can. We will be able to acquire that status before that, as soon as the transitional agreement is unfrozen. The SAA will formally be enforced only after it is ratified by all EU countries, which will take two or three years.

When do you expect Serbia to conclude cooperation with The Hague?

It is in our best interest to put an end to that story as soon as possible. We are a small country in the midst of events and we have no other way to defend ourselves but by respecting international law. Cooperation with The Hague is directly related with the defence of Kosovo. If we say that we are defending our southern province by respecting international law, that means we must also fulfil our international obligations towards The Hague. Thus we will respect domestic law as well.

Do you expect Hadzic and Mladic to be in Scheveningen soon?

It will be best for the country and for them to surrender voluntarily.

Is the fate of the energy agreement with Russia uncertain?

Only journalists question that agreement, but it is important that the government does not do so. This affair is one of Serbia’s development engines when it comes to energy stability.

Details of that agreement are still uncertain, for instance, the price of NIS:

We must not confuse these matters: an inter-state agreement is one thing, and contracts another matter whatsoever. The agreement is of general character, and it is a kind of an “umbrella” which contains the determination of two states to regulate cooperation in the energy sector.

Misunderstandings with Russia are related with details which will be included in contracts:

There are no misunderstandings. We are yet to sit down with Russian representatives and negotiate, but not with the aim of making the agreement fall through. On the contrary, both sides must find their interests. I have no doubts that a quality agreement will be reached.

In the protocol, already signed with Russia, it says that the price of NIS is €400 million, but the agency has estimated it at €2.2 billion. Moscow is sending signals that the price is not debatable:

Bidding on the price began in the public, and that is not good. The price will be negotiated in the talks. Naturally, we will strive to make it as high as possible, and no doubt the other side will do the same. The Serbian government will begin the talks resolved to conclude them successfully, and that is what will happen.

When will Serbian citizens be able to import cars at lower customs rate?

We are intent on lowering customs tax in early 2009. In the past we protected domestic producers, but that was not in our interest. Soon Fiat will be our producer and that company is strong enough and does not need that kind of protection.

When will the matter between Zastava and Fiat be finalised?

Talks with Fiat are drawing to a close and we are now choosing the date when we will officially sign the agreement. This is a huge investment and we want to show how important it is.

What will Serbia get with that investment?

This is a development engine for our state. In brief, Fiat plans to produce 200,000 vehicles in the first stage and 300,000 in the second. Our entire market amounted to 50,000 vehicles, therefore Fiat will base around 90% of its production capacity on export. That will imply huge income in foreign currency, which will be important for our macroeconomic stability.

When will Serbian citizens’ standard get closer to that in the EU?

In comparison with the region, and even some countries that joined the EU, Serbia has progressed a lot in economic reforms. If it were not for historic and political issues, there would be no reasons for us not to become an EU member. Serbia’s economic growth is on the rise, and citizens in some EU countries do not live any better that people in Serbia. Their most vulnerable social groups are in a worst position than in Serbia.

Many in Serbia live poorly:

According to a survey five-six years ago, nearly 13% of the citizens in Serbia were below the poverty level. The latest surveys say about 6%, which makes Serbia closer to developed countries.

Do you want to say we are ready for the EU?

We are more ready now than many EU members. The five-six year deadline we set is reasonable for our EU accession. Is the budget in crisis after the increase of pensions?

In line with the pre-election programme of our coalition partner, we increased pensions by 10% as of October. This increase does not “eat up” the budget. Public expenditure will not increase as the budget is larger by realistic increase of revenues.

What is the destiny of the Horgos-Pozega motorway concession?

Negotiations on terminating the concession started and the process is underway. Formally and legally, the contract is still in force and we will not terminate it unilaterally as the concessionary could press charges against us.

While the negotiations are ongoing, works cannot start:

The main project has not been completed and the works could not have started anyway.

Can Serbia take the burden of building the motorway?

Every year, Serbia repays €500,000 of debts, thus reducing our public debt. This means that if we asked for €500,000 every year, the public debt would remain unchanged. Serbia could finance the motorway in that way, but it depends on whether that section of Corridor 10 will be priority. It remains to be decided.

The government promised swimmer hero Milorad Cavic an apartment in Belgrade:

As Cavic expressed wish to move to Belgrade, we tried to make his wish true. He is a top athlete but his sport does not bring a lot of income. If the state wants an athlete, it must help him. We found a solution and Cavic will soon get the keys to a modest apartment.

What are the results of the government’s work as it is about to finish its first 100 days in office:

The government provided the ratification of the SAA, we prepared a resolution on Kosovo, Fiat is coming, the agreement with Russia has been ratified, the bill on anti-corruption agency adopted, pensions have increased, inflation is calm, economic trends are good. I think we made steps in the right direction.

Do you plan to move to Dedinje?

I live in a family house of nearly 200 square metres in Zemun. After the children went their ways, my wife and I remained to live in it. It would be hard for us to move, but if for security reasons we have to move, I cannot exclude that option.