International Information Centre for Balkan Studies

IMF's Sosa: Slow reforms of state-owned companies in Serbia

February 10, 2020

The reforms of the strategic state companies in Serbia progress at a slow pace and that “more efforts are needed to empower the corporative management and secure professional leaders in those companies,” Sebastian Sosa, the IMF Resident Representative in Serbia, the FoNet news agency reported.

Sosa told Radio Free Europe (RFE) that “we support (Serbia’s) authorities’ intention to, helped by the European Bank for Reconstruction and Developments (EBRD), prepare a document on the ownership over state companies, by July this year.”

IMF ranked Serbia at the 15th position out of 20 countries from Central and Eastern Europe reviewed based on state-owned companies’ governance in 2018.

RFE said that the biggest challenge Serbia faced was the implementation of the IMF recommendation regarding the reforms of the largest state-owned Electric Power company (Elektroprivreda Srbije).

"Serbia earmarks two percent of the GDP for the state help or three times more than the European Union members, and that the bulk of that money goes to the state-owned companies," Dusko Vasiljevic of the World Bank says.

EPS’ cumulative loss in 2018 was a billion Euros, according to the Business Register Agency.

The company is led by Milorad Grcic, a member and an official of the ruling Serbian Progressive Party (SNS) led by President Aleksandar Vucic. Grcic has held the position as an acting director since 2016.

The runner-up was Srbijagas with some 949 million Euros. The long-time director is Dusan Bajatovic, a member of the Socialist Party of Serbia (SPS), the leading SNS coalition partner.

The third place was occupied by the state-owned Putevi Srbije (Serbia’s Roads) firm, led by Zoran Drobnjak, from SNS, as an acting director for the last nine years. The company ended 2018 with 93 million Euros in loses.

In 2019, the Government additionally helped Koridori Srbije (Serbia’s Corridors) three times with a total of 23.7 million Euros to finish the construction of Corridor 10.

In 2018, Serbia allocated over 300 million Euros from the budget to help the state companies, according to Dusko Vasiljevic, from the World Bank (WB) office in Serbia.

He tells RFE that country earmarks two percent of the GDP for the state help or three times more than the European Union members and that the bulk of that money goes to the state-owned companies.”

Source:  http://rs.n1info.com/English/NEWS/a568034/IMF-s-Sosa-Slow-reforms-of-state-owned-companies-in-Serbia.html

Experts warn Serbia not implementing emission reduction plan

February 10, 2020

An official of the Renewables and Environmental Regulatory Institute (RERI) told Monday news conference that Serbia’s National Emmission Reduction Plan (NERP) was not implement in 2018, adding that there are doubts about whether it was implemented last year.

RERI Program Director Mirko Popovic said that “seven facilities covered by the plan exceeded the maximum annual emissions of sulfur dioxide ïn 2018 and no one was held accountable”.  

He recalled that the Serbian government amended the NERP on January 30, 2020, two years after its implementation was supposed to start and 15 days after the Energy Community Secretariat launched proceedings against Serbia for failing to implement the NERP. Serbia accepted the obligation of implementing the Energy Community Large Combustion Plants Directive by either limiting emmissions from individual plants or Implementing the NERP, both of which it failed to do. The year 2018, as the date to start implementation, was deleted from the amended NERP, the RERI said.  

Popovic warned that the fact that the government adopted an amended NERP does not guarantee its implementation in the 2020-27 period.

Source:  http://rs.n1info.com/English/NEWS/a568160/Experts-warn-Serbia-not-implementing-emission-reduction-plan.html

Some 1.8 million Serbian citizens living on edge of poverty

February 9, 2020

Serbia's welfare system is inefficient and insufficient to fight against poverty in the society, Danilo Curcic from the A11 initiative said on Sunday.

Experts warn that some 1.8 million Serbian residents are leaving on the edge of poverty.

“This is significantly higher than the European average, which tells us that every fourth Serbian resident is facing a risk of poverty. The numbers are frightening,” Curcic said.

He explains that when it comes to the risk of poverty, it refers to the people who have a monthly income below 60 percent of the average income, which is the most common salary in Serbia.

“That's somewhere around €330 and everyone below that is at risk of poverty,” he noted.

The austerity measures that the Government introduced in 2012 have compromised some of the fundamental social and economic rights of citizens, Initiative A11 concluded.

Source:  http://rs.n1info.com/English/NEWS/a567802/Some-1.8-million-Serbian-citizens-living-on-edge-of-poverty.html

Deputy PM: US's DFC arrival of immense importance for Serbia

February 7, 2020

Serbia's Deputy Prime Minister in charge of Construction, Traffic and Infrastructure Zorana Mihajlovic said on Friday that the US International Development Finance Corporation (DFC) arrival in Serbia was of a great significance to the country, since President Donald Trump had appointed all people that led the company, the FoNet news agency reported, citing Mihajlovic's office statement.

As an independent agency of the US Government, DFC provides financing for private development projects.

The Deputy Prime Minister met with Caleb McCarry, Counselor to the DFC CEO, in Belgrade and the two discussed possible cooperation in infrastructural projects, the statement said.

"This is a good and meaningful sign for our country and yet another confirmation of its stability. We talked about the infrastructural projects and the new investment cycle 'Serbia 2020-2025'. We believe we will see more American investments in our country," Mihajlovic said.

McCarry was quoted as saying that Serbia was a relevant European country, regional leader and critical state for regional stability and prosperity. He added that the DFC was ready to work with Serbia and support its economic investments and further development.

Source:  http://rs.n1info.com/English/NEWS/a567452/US-DFC-comes-to-Serbia.html

Fin Min present EU envoy with Serbia’s Reform Program till 2022

February 4, 2020

Sinisa Mali, Serbia’s Finance Minister, presented the country’s Economic Reforms Programme (ERP) till 2022 to the head of the European Union Delegation in Belgrade Sem Fabrizi on Tuesday, adding his country recorded 4.2 percent of the economic growth, the Beta news agency reported.

Mali reminded reporters that the European Commission praised Serbia’s economic achievements in 2019.

“Serbia ended last year with the economic growth of 4.2 precent… We are in the area of high economic growth which helps not only a better quality of life but also the rise in salaries and wages,” Mali said.

Fabrizi said the 200-pages Programme had different policies Serbia would implement in the next few years. “That’s a document which will enable Serbia access to the EU, the most prosperous market in the world, and next week the European Commission delegation will come to Serbia to discuss the document,” Fabrizi said.    

Source:  http://rs.n1info.com/English/NEWS/a566464/Fabrizi-satisfied-with-Serbia-s-economic-programme.html

Turkish investments in Serbia on rise since 2015; 133.7 mill Euros in FDI

January 31, 2020

It added that the Turkish companies took over 19 projects in Serbia worth 395.7 million US Dollars, and 17 out of them started after 2018, the Ankara embassy to Belgrade told the magazine.

The current number of Turkish firms in Serbia is 800 compared to 130 in 2015. Those companies employ 10,000 workers.

The commodity exchange between the two countries was over a billion Euros in 2018, but with only 30 percent imports were covered by exports.

In the first nine months of 2019, the trade exchange was 904 million Euros, meaning that it could exceed the 2018 result.  

Source:  http://rs.n1info.com/English/NEWS/a565438/Turkey-has-800-companies-in-Serbia.html            

Belgrade second, Sarajevo fourth most polluted capital, Sunday morning

January 27, 2020

According to Airvisual portal, Belgrade was the second most polluted capital on Sunday morning, right after Beijing, with a pollution index reaching 198 for Belgrade and 236 for the Chinese capital.

The third place was occupied by Shanghai with a pollution index 1t 195, while Sarajevo was fourth with the index reaching 189. Macedonian capital Skopje was eighth with the pollution index at 173.
According to the Air Quality Index, good values are those from 0 to 50, moderately good from 51 to 100 (longer stay in the open is not recommended for children, elderly and chronic patients). Index values between 101 to 150 is considered unhealthy for sensitive population (children, elderly, chronic patients).

AQI index from 151 to 200 is considered unhealthy. People with cardiac and pulmonary diseases, the elderly and children should avoid outdoor exercise and prolonged physical activity. Air with an index of 201 to 300 is rated as very unhealthy.

Source:  http://ba.n1info.com/English/NEWS/a406208/Belgrade-second-Sarajevo-fourth-most-polluted-capital-Sunday-morning.html

Belgrade: Serbia among few countries adjusted to FATF recommendations

January 23, 2020

Serbia's Finance Minister Sinisa Mali said on Thursday his country fulfilled the Working Group of the Financial Action Task Force (FATF) recommendations and that it was among a few states that had complied that well, the FoNet news agency reported.

He added that the Council of Europe Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism Moneyval had published its third report about Serbia's progress in which it upgraded the country from 'partially adjusted' to 'adjusted.'

"Our country has timely and even before the deadline fulfilled its international obligations, and with such a dynamic of meeting duties to Moneyval, it now has joined the narrow circle of states which have adjusted to the FATF recommendation to the highest level," Mali said.

He said that some of the recommendations regarding the already adopted laws would be measured in 2021.

Mali added that much was expected from the adoption of the Law on Preventing Money Laundering and Financing terrorism which was soon to be on the Government agenda most probably next month.

Serbia was taken off the so-called FATF blacklistlast June, after spending over a year on it as an assessed risk to the international financial system.

He said the harmonisation of the legal system with that of the EU would contribute to Serbia's place on the investment map.

"I expect the investment rating for Serbia by the end of the year. The criteria for that include the legal safety of investments, political stability, continuous commitment to improvement, Mali said.  

Source:  http://rs.n1info.com/English/NEWS/a563274/Serbia-fulfils-obligations-to-FATF-Minister-says.html

Environment minister says schools to close in next wave of pollution

January 23, 2020

Serbia’s Environment Minister Goran Trivan said on Thursday that the next wave of air pollution will lead to the closure of large-scale polluters and a recommendation to close schools.

He told this week’s issue of Nedeljnik weekly that air quality has been the same for years. “This is the data for Belgrade: in 2011 there were 133 days when the pollution was higher than allowed and in 2018 there were 59 days. Who are you criticizing? Let’s say that all that certainly is not good and start creating an atmosphere in which we all do something,” he said.

Trivan claims that the problem of air pollution has been tackled for years. “The whole world has a problem with air quality. If you look at statistics, the same problem exists everywhere. We are not exempt from air pollution. We are a region which has problems with high pollution levels sometimes. The Balkans and southern Europe, even developed countries have the same problems – technology and micro-climate conditions,” the minister said.

Source:  http://rs.n1info.com/English/NEWS/a563140/Environment-minister-says-schools-to-close-in-next-wave-of-pollution.html

DW: Belgrade–Pristina flights several times a week on board of Airbus A320

January 22, 2020

The German low-cost airline Eurowings' Airbus A230 planes will fly directly between Serbia's and Kosovo capitals several times a week with the starting date still to be decided, the Deutsche Welle (DW) reported on Wednesday.

 The company told DW that "different commercial issues are still open."

"The start of the flights is still undecided," a representative of the Eurowings Florian Grencderfer told the DW.

He added that the company already had its base in Pristina where the Eurowings headquarters would be.

The Lufthansa-owned company is one of the leading airlines in South-Eastern Europe and the main one at the Kosovo and Croatian markets.

The Statement-of-intent came after intensive negotiations and adjustments launched and carried out by the US ambassador to Germany Richard Grennell.

The A320 planes have 180 seats, business class, more comfortable class and a standard economy class with 90 seats in the rear part of the aircraft.

Eurowings is a point-to-point-carrier and most of its destinations include those from German airports to those in "the European foreign countries."

The company also flies from six cities in Austria and three in Switzerland.

At the beginning of the last year, Eurowings withdrew from almost all long-distance routes and currently flies to six destinations in the US, Cuba and the Dominican Republic.

Source:  http://rs.n1info.com/English/NEWS/a562884/Belgrade-Pristina-flights-several-times-a-week.html

RTB Bor plant reconstructed not new, Belgrade daily says

January 22, 2020

Belgrade daily Danas said on Wednesday that the Serbian government deceived the public when it said that a new smelting plant would be built at the Mining and Smelting Basin (RTB) Bor.

The government spent 350 million Euro to reconstruct existing facilities instead of a building a new plant which would not pollute the environment, it said adding that the government secured the funding and provided guarantees to build a new smelting plant.  

The residents of Bor have been protesting the high pollution levels in their town for months, claiming that the Chinese Zijin, which took over the plant is not doing enough to lower pollution level.

An unnamed Belgrade University professor engaged in environmental issues told the daily the public was formally told that a new plant was being built while the old one was being reconstructed and added that the government guaranteed in 2015 that the pollution problem would be solved once the plant starts operating. The government said the new plant would solve the problem of air pollution in the production of up to 80,000 tons of copper, the professor said, recalling that the Chinese Zijin company which took over the RTB has reached a production level of 60,000 tons which the reconstructed plant should have been able to handle while securing clean air over the city of Bor.  

The Chinese company told Danas that care for the environment is a continuing process but added that “unfortunately, environmental problems were ignored for more than 100 years”. The company promised to set up filtering facilities and upgrade the smelting plant.

Source:  http://rs.n1info.com/English/NEWS/a562756/RTB-Bor-plant-reconstructed-not-new-Belgrade-daily-says.html

Bosnia's foreign trade deficit over €4 billion in 2019

January 21, 2020

Bosnia's foreign trade deficit reached 8 billion and six million Bosnian marks (the equivalent of some € billion) and the import-export coverage stood at 58.9 percent at the end of 2019, the state Statistics Agency said on Tuesday.

The country's total exports reached 11 billion and 492 million marks or some €5.8 billion which is 3.4 percent less than in 2018, and imports reached 19 billion and 498 million marks or some €9.9 billion, representing an increase by 1.2 percent.

Bosnia's exports to the Central European Free Trade Agreement (CEFTA) countries was 1.9 billion marks (some €1 billion) and was 2.3 percent less than in 2018, while imports stood at 2.4 billion marks (or €1.2 billion) which is 3.9 percent higher than 2018. The total import-export coverage for the CEFTA region was 78.7 percent.

Last year, Bosnia exported 8 billion and 388 million marks (some €4.2 billion) worth of goods to the EU market, which is 3.4 percent less than in 2018, while it imported goods worth 12.8 billion marks (approx. €6.5 billion). This means that it imported 3.6 percent more goods than in 2018.

The import-export coverage with this market was 69.4 percent in 2019.

Source:  http://ba.n1info.com/English/NEWS/a405248/Bosnia-s-foreign-trade-deficit-over-4-billion-in-2019.html

Belgrade to get waste water treatment plant

January 20, 2020

The Belgrade city authorities signed an agreement with the China Machinery Engineering Corporation (CMEC) to start work on a waste water treatment plant.

The two agreements on initial research and planning for the project were signed by Construction and Infrastructure Minister Zorana Mihajlovic and CMEC official Li Suecheng along with Belgrade Water and Sewer CEO Dragan Djordjevic.  

The initial stages of the project will cost 271 million Euro and the construction of the plant itself in the Veliko Selo suburb will cost between 400 and 500 million Euro, a news conference was told. Another 100 million Euro will be needed to build four more waste water treatment plants.  

Mihajlovic said that Belgrade is the only European city which does not have a waste water processing plant, adding that the financial contract will be signed within six months and the research will begin immediately. She said that the project will be completed within five years of the signing of the financial contract. The minister recalled that some 190 million cubic meters of waste waters are flushed into the Sava and Danube rivers every year.  

Source:  http://rs.n1info.com/English/NEWS/a562214/Belgrade-to-get-waste-water-treatment-plant.html

Trade minister says Kosovo tariffs inflicting one million Euro daily damages on

January 20, 2020

Trade Minister Rasim Ljajic told Monday’s issue of Belgrade daily Vecernje Novosti that the country’s economy is loosing more than a million Euro a day because of the 100 percent tariffs on Serbian goods imposed by the authorities in Kosovo.

“The economy is loosing a million and 39,000 Euro a day,” Ljajic said adding that the total value of trade lost in the 14 months since the tariffs were imposed stands at 435 million Euro. The minister said that the biggest losses were incurred by the food industry.

Ljajic said he sees no readiness from Pristina to compromise. “The international community seems not to know what to do with itself, let alone tackle the Kosovo issue in any serious way and it’s hard to expect a viable solution to be found without the European Union, Russia, China and the United States,” he said.

The minister said that it would take some kind of “Dayton” (the talks and peace agreement that ended the war in Bosnia) to resolve the Kosovo issue.

Source:  http://rs.n1info.com/English/NEWS/a562082/Trade-minister-says-Kosovo-tariffs-inflicting-one-million-Euro-daily-damages-on-Serbian-economy.html

Angela Merkel outlines vision for Europe

January 16, 2020

German Chancellor Angela Merkel wants countries in the European Union to boost their technological capabilities and push more aggressively into areas such as battery manufacturing for electric cars and cloud computing.

Merkel, who is serving her fourth and final term as leader of Europe's manufacturing powerhouse, said in an interview with the Financial Times that Europe must compete aggressively with tech companies in the United States and Asia.

"I believe that chips should be manufactured in the European Union, that Europe should have its own hyperscalers and that it should be possible to produce battery cells," she told the newspaper.

The European Union has struggled for years to produce leading tech companies. It lacks an innovation hub on the scale of Silicon Valley, and the strategic government support afforded many tech companies in Asia.

Germany's automotive giants currently have no choice but to rely on battery producers from South Korea and China to outfit most of their new electric vehicles. Volkswagen (VLKAF) is partnering with Sweden's Northvolt to build a battery factory in Germany, but production is expected to start in late 2023 at the earliest.

US and Asian companies dominate chipmaking. And Europe has no hyperscalers, or companies that provide the internet infrastructure that underpin huge platforms such as Google (GOOGL), Facebook (FB) and Amazon (AMZN).

By suggesting that Europe, and not just Germany, should develop new tech capabilities, Merkel may be opening the door to the kind of industrial strategy favoured by French President Emmanuel Macron.

Macron has been pushing for the creation and protection of European champions that can better compete with foreign rivals. Airbus (EADSF), which has facilities across the EU and competes with Boeing (BA), is one successful example.

But while calling for greater regional innovation and competitiveness, Merkel rejected the path taken by the Trump administration, which has sought to boost American interests by confronting China over trade, intellectual property protections and Beijing's support for state-run enterprises.

"Do we in Germany and Europe want to dismantle all interconnected global supply chains . . . because of this economic competition?" She added: "In my opinion, complete isolation from China cannot be the answer."

Merkel also told the Financial Times that Europe should have the confidence to set global standards, such as the GDPR rules that have helped strengthen data protection around the world.

"I firmly believe that personal data does not belong to the state or to companies," she said. "It must be ensured that the individual has sovereignty over their own data and can decide with whom and for what purpose they share it."

The interview could foreshadow Merkel's message to business and political leaders next week in Davos. The chancellor is scheduled to give a keynote address at the World Economic Forum in Switzerland on Thursday.

Source:  http://ba.n1info.com/English/NEWS/a404363/Angela-Merkel-outlines-vision-for-Europe.html

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