COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Commission Opinion on Serbia's application for membership of the European Union
Date: 2011-10-12
Institutions: European Commission
Subjects: Kosovo question, Serbia, accession criteria, accession negotiations, pre-accession strategy

EUROPEAN COMMISSION 

Brussels, 12.10.2011 
COM(2011) 668 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT AND THE COUNCIL 

Commission Opinion on Serbia's application for membership of the European Union 

{SEC(2011) 1208 final} 

 
 
 
 
  
 
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT AND THE COUNCIL 

Commission Opinion on Serbia's application for membership of the European Union 

A. 

a) 

INTRODUCTION 

Application for membership 

Serbia  presented  its  application  for  membership  of  the  European  Union  on  22  December 
2009.  Subsequently,  on  25  October  2010,  the  Council  of  the  European  Union  requested  the 
Commission to submit its opinion on this application, in line with the procedure laid down in 
Article  49  of  the  Treaty  on  European  Union,  which  states  that  "Any  European  State  which 
respects the values referred to in Article 2 and is committed to promoting them may apply to 
become a member of the Union. The European Parliament and national Parliaments shall be 
notified of this application. The applicant State shall address its application to the Council, 
which shall act unanimously after consulting the Commission and after receiving the consent 
of  the  European  Parliament,  which  shall  act  by  a  majority  of  its  component  members.  The 
conditions of eligibility agreed upon by the European Council shall be taken into account". 

Article  2  states  that  "the  Union  is  founded  on  the  values  of  respect  for  human  dignity, 
freedom,  democracy,  equality,  the  rule  of  law  and  respect  for  human  rights,  including  the 
rights of persons belonging to minorities. These values are common to the Member States in a 
society  in  which  pluralism,  non-discrimination,  tolerance,  justice,  solidarity  and  equality 
between women and men prevail". 

This is the legal framework within which the Commission submits the present Opinion. 

The  Feira  European  Council  in  June  2000  acknowledged  that  Western  Balkan  countries 
participating  in  the  Stabilisation  and  Association  Process  were  'potential  candidates'  for  EU 
membership.  The  European  perspective  of  these  countries  was  further  confirmed  by  the 
Thessaloniki European Council in June 2003 which endorsed the 'Thessaloniki Agenda for the 
Western Balkans'. This agenda remains the cornerstone of EU policy towards the region. 

The European Council of December 2006 renewed the EU's commitment "that the future of 
the Western Balkans lies in the European Union" and reiterated that "each country's progress 
towards the European Union depends on its individual efforts to comply with the Copenhagen 
criteria  and  the  conditionality  of  the  Stabilisation  and  Association  Process.  A  country's 
satisfactory  track  record  in  implementing  its  obligations  under  a  Stabilisation  and 
Association Agreement (SAA), including trade-related provisions, is an essential element for 
the  EU  to  consider  any  membership  application".  At  the  Sarajevo  EU-Western  Balkans 
ministerial  meeting  on  2  June  2010,  the  EU  reiterated  its  unequivocal  commitment  to  the 
European perspective of the Western Balkans and that the future of these countries lies in the 
European Union. 

In line with the Treaty requirements, the current assessment is made in terms of the conditions 
of eligibility laid down by the European Council. In Copenhagen in June 1993, the European 
Council concluded that: 

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"Accession  will  take  place  as  soon  as  a  country  is  able  to  assume  the  obligations  of 
membership by satisfying the economic and political conditions required. 

Membership requires:  

–  that the candidate country has achieved stability of  institutions  guaranteeing democracy, 

the rule of law, human rights and respect for and protection of minorities;  

–  the  existence  of  a  functioning  market  economy,  as  well  as  the  capacity  to  cope  with 

competitive pressure and market forces within the Union;  

–  the  ability  to  take  on  the  obligations  of  membership  including  adherence  to  the  aims  of 

political, economic and monetary union".  

The Union's capacity to absorb new members, while maintaining the momentum of European 
integration, is also an important consideration in the general interest of both the Union and the 
candidate countries. 

In  December  1995,  in  Madrid,  the  European  Council  referred  to  the  need  "to  create  the 
conditions for the gradual, harmonious integration of [the applicant] countries, particularly 
through  the  development  of  the  market  economy,  the  adjustment  of  their  administrative 
structures and the creation of a stable economic and monetary environment". 

The Stabilisation and Association Process (SAP) conditionalities were defined by the Council 
on 31 May 1999. They include cooperation with the International Criminal Tribunal for the 
former Yugoslavia (ICTY) and regional cooperation. As a fundamental element of the SAP, 
these conditions are integrated into the Stabilisation and Association Agreement (SAA) with 
Serbia,  currently  under  ratification,  and  also  into  the  Interim  Agreement  (IA)  on  trade  and 
trade-related matters, which entered into force on 1 February 2010. 

In  December  2006,  the  European  Council  agreed  that  "the  enlargement  strategy  based  on 
consolidation,  conditionality  and  communication,  combined  with  the  EU's  capacity  to 
integrate new members, forms the basis for a renewed consensus on enlargement". 

In  the  present  Opinion,  the  Commission  analyses  Serbia's  application  on  the  basis  of  the 
country's capacity to meet the criteria set by the Copenhagen European Council of 1993 and 
the  conditionality  of  the  Stabilisation  and  Association  Process.  Serbia's  track  record  in 
implementing  its  obligations  under  the  Stabilisation  and  Association  Agreement  and  the 
Interim Agreement on trade and trade-related matters is also examined.  

The Opinion was prepared following a methodology similar to that used in previous Opinions. 
The  Commission  organised  a  number  of  expert  missions  to  Serbia  concentrating  mainly  on 
the  fields  covered  by  the  political  criteria.  This  approach  allowed  an  assessment  of  the 
administrative  capacity  of  Serbian  institutions  and  of  the  way  legislation  is  implemented.  It 
also  helped  to  better  identify  remaining  challenges  and  priorities  for  future  action.  The 
Commission has analysed both the present situation and the medium-term prospects. For the 
purpose  of  this  Opinion  and  without  prejudging  any  future  date  of  accession,  the  medium-
term perspective has been defined as a period of five years.  

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The  detailed  analysis  on  which  this  Opinion  is  based  is  contained  in  a  separate  document 
(Analytical Report accompanying the Opinion on Serbia's application for membership of the 
European Union)1. In line with the renewed consensus on enlargement, the analytical report 
provides initial estimates of the impact of the future accession of Serbia in some key policy 
areas. The Commission will provide more detailed impact assessments for these policy areas 
at  later  stages  of  the  pre-accession  process.  In  addition,  the  EU  accession  treaty  for  Serbia 
would  involve  technical  adaptation  of  the  EU  institutions  in  the  light  of  the  Treaty  on 
European Union.  

b) 

Relations between the EU and Serbia 

Relations between the EU and Serbia have developed since the democratic changes of 2000, 
initially with the Federal Republic of Yugoslavia and then, from 2003 onwards, with the State 
Union of Serbia and Montenegro. The EU continued its relations with the Republic of Serbia, 
as the successor of the State Union, when Montenegro became independent in 2006.  

Serbia  is  participating  in  the  Stabilisation  and  Association  Process.  The  Stabilisation  and 
Association  Agreement  provides  a  framework  of  mutual  commitments  on  a  wide  range  of 
political,  trade  and  economic  issues.  It  was  signed,  along  with  the  Interim  Agreement  on 
trade and trade-related matters, in April 2008. EU ministers agreed to submit the SAA to their 
parliaments for ratification and the EU agreed to implement the Interim Agreement on trade 
and  trade-related  matters  as  soon  as  the  Council  decided  that  Serbia  was  fully  cooperating 
with  the  International  Criminal  Tribunal  for  the  former  Yugoslavia.  Serbia  started  on  1 
January 2009 to implement the Interim Agreement. The Interim Agreement entered into force 
on 1 February 2010. At the 14 June 2010 Foreign Affairs Council, ministers agreed to submit 
the Stabilisation and Association Agreement to their parliaments for ratification. The process 
is still under way. In general terms, Serbia has built a positive track record on implementing 
the  obligations  imposed  by  the  Stabilisation  and  Association  Agreement  and  the  Interim 
Agreement. Whenever problems arose, Serbia took a constructive and transparent approach to 
resolve them promptly and effectively.  

A  European  Partnership  with  Serbia  was  adopted  by  the  Council  in  2004  and  updated  in 
2006 and 20082. 

Political  dialogue  meetings  at  ministerial  level  have  been  held  since  2003.  Policy  dialogue 
between  the  European  Commission  and  the  Serbian  authorities  has  been  taking  place  in  the 
framework  of  the  Enhanced  Permanent  Dialogue  (EPD)  since  2003.  Inter-parliamentary 
meetings between representatives of the European Parliament and of the Serbian parliament 
have  been  held  annually  since  2006.  The  Interim  Committee  under  the  IA  and  a  number  of 
sub-committees  meet  annually,  notably  on  the  internal  market,  competition,  transit  traffic, 
trade, customs, taxation, agriculture and fisheries. Several sub-EPD meetings are covering all 
sectors  of  the  SAA  that  are  not  included  in  the  Interim  Agreement,  such  as  energy,  the 
environment, social policy, justice, freedom and security.  

Serbia participates in an economic dialogue with the Commission and the EU Member States. 
In  this  framework,  Serbia  presented  in  January  2011  an  update  of  its  annual  Economic  and 
Fiscal Programme (EFP). 

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2 

SEC(2011) 1208. 
OJ L 80, 18.3.2008, p. 46. 

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Visa  liberalisation  for  Serbian  citizens  travelling  to  the  Schengen  area  was  granted  by  the 
Council,  after  consultation  with  the  European  Parliament,  as  of  19  December  2009.  This 
decision was based on substantial progress in the areas of justice, freedom and security and 
fulfilment of the specific conditions set out in the roadmap for visa liberalisation. The rules 
for  visa-free  travel  have  been  respected  by  the  vast  majority  of  travellers.  To  ensure  the 
continued  implementation  of  the  commitments,  a  post  visa  liberalisation  monitoring 
mechanism was established in view of increased numbers of asylum seekers from the region. 
The  Commission  presented  its  first  monitoring  report  to  the  European  Parliament  and  the 
Council in June 2011. An agreement on readmission between the European Union and Serbia 
has been in force since January 2008. 

Serbia  signed  the  Energy  Community  Treaty  in  October  2005  and  the  European  Common 
Aviation Area (ECAA) agreement in June 2006.  

In  October  2008,  the  government  of  Serbia  adopted  the  National  Programme  for  the 
Integration  of  Serbia  into  the  European  Union  for  the  period  2008-2012.  A  revised  and 
updated version was adopted in December 2009. In December 2010 the government adopted 
an  Action  Plan  on  fulfillment  of  priorities set  in  the  European  Commission's  2010  Progress 
Report,  with  the  aim  of  increasing  focus  and  achieving  additional  results  on  the  reform 
agenda, ahead of the present Opinion.  

Serbia  has  been  receiving  EU  financial  assistance  since  2001.  Overall,  between  2001  and 
2011, the EU committed over €2 billion to Serbia in the form of grants and €5.8 billion in the 
form of soft loans. From 2001 to 2006, Serbia benefited from EU CARDS assistance worth 
€1,045 million. Since 2007, CARDS has been replaced  by the Instrument for Pre-Accession 
Assistance (IPA), under which Serbia received assistance worth €974 million between 2007 
and 2011. The assistance under the IPA is designed to support the reforms undertaken as part 
of  the  European  integration  process,  with  a  focus  on  the  rule  of  law,  institution-building, 
approximation with the EU acquis, sustainable economic and social development and support 
to civil society. 

Serbia participates fully in a number of EU programmes under the financial perspective 2007-
2013:  the  7th  Framework  Programme  for  research  and  technological  development, 
PROGRESS, 
the  Information  and 
Communication  Technologies  Policy  Support  Programme,  the  Culture  Programme,  the 
Customs Programme and the Fiscalis Programme. IPA funds are used to meet part of the costs 
of participation in these programmes.  

the  Competitiveness  and  Innovation  Programme, 

B. 

1. 

CRITERIA FOR MEMBERSHIP 

POLITICAL CRITERIA 

The  present  assessment  is  based  on  the  Copenhagen  criteria  relating  to  the  stability  of 
institutions  guaranteeing  democracy,  the  rule  of  law,  human  rights  and  respect  for  and 
protection of minorities, as well as on the conditionality of the Stabilisation and Association 
Process. 

Serbia is a parliamentary democracy. Its constitutional and legislative framework is largely in 
line with European principles and standards and its institutions are well developed. Serbia is 
committed  to  its  objective  of  membership  of  the  European  Union  and  since  2008  has 

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increasingly  focused  its  efforts  on  the  EU-related  reform  agenda.  The  government  has 
upgraded  some  of  its  procedures  and  parliament  has  become  far  more  effective  in  its 
legislative  activity  under  the  current  legislature.  The  legislative  process  would  benefit  from 
more thorough preparation and greater emphasis on consultation of stakeholders. Capacity for 
parliamentary oversight and governmental policy planning, coordination and implementation 
remains  to  be  further  developed.  Serbia  has  set  up  all  the  necessary  independent  regulatory 
bodies.  The  rules  governing  the  parliamentary  review  of  their  annual  reports  have  been 
clarified  even  though  the  follow-up  of  recommendations  by  independent  and  regulatory 
bodies  needs  to  be  strengthened.  The  public  administration  is  in  general  well  developed,  in 
particular  at  central  level.  The  principle  of  a  merit-based  career  system  needs  to  be  fully 
implemented.  Serbia  has  established  a  Statute  for  the  Province  of  Vojvodina  and  has 
undertaken to transfer some competences to the municipal level.  

Since  2001,  elections  have  been  consistently  conducted  in  Serbia  in  accordance  with 
international standards. The electoral legislation was recently brought into line with European 
standards. It now provides that the appointment of MPs follows the order of the lists presented 
to  the  voters  and  it  puts  an  end  to  the  practice  of  'blank  resignations',  by  which  MPs  were 
tendering  resignation  letters  to  their  parties  at  the  beginning  of  their  mandate.  This 
consolidates  the  free  exercise  of  parliamentary  mandates,  a  principle  which  needs,  in  due 
course, to be fully enshrined in the Constitution. 

The legal and institutional framework for the rule of law in Serbia, including the fight against 
corruption and organised crime, has been enhanced, particularly following substantial reforms 
in  the  judiciary,  the  setting-up  of  the  Anti-Corruption  Agency  and  the  stepping-up  of 
international  cooperation  in  criminal  matters.  This  has  led  to  initial  results.  The  main 
challenges  remain  in  the  areas  of  the  judiciary,  the  fight  against  corruption  and  the  fight 
against  organised  crime.  In  particular,  a  proactive  approach  in  the  fight  against  corruption 
leading to a credible track record of opened investigations and final convictions remains to be 
built up. An extensive framework for civilian control of the security forces is in place. 

Substantial  reforms  of  the  judiciary  were  pursued  in  Serbia  following  the  adoption  of  the 
national  strategy  in  2006  and  intensified  in  2009  and  2010.  Independence  and  self-
administration  were strengthened with the establishment of the new High Judicial and  State 
Prosecutorial  Councils,  which  have  been  functioning  in  their  permanent  compositions  since 
April  2011.  A  re-appointment  procedure  for  all  judges  and  prosecutors  was  undertaken  in 
December 2009, aiming in particular at raising their professional and integrity standards. The 
initial  significant  shortcomings  identified  in  that  procedure  are  in  the  course  of  being 
addressed  by  a  review  process  for  which  there  are  clear  guidelines.  The  review  process 
remains to be satisfactorily completed, in a transparent manner, in line with these guidelines. 
A revision of the role given by the Constitution to parliament on appointments and dismissals 
in the judiciary will need to be undertaken in due course, to further reduce the risk of undue 
political  influence.  Several  steps  have  been  taken  to  increase  the  efficiency  of  the  judicial 
system.  The  court  network  was  restructured  and  the  number  of  courts  reduced,  leading  to  a 
better  distribution  of  workload.  An  Administrative  Court  was  set  up  and  a  Law  on 
enforcement  of  court  decisions  adopted  in  May  2011.  Further  efforts  are  still  needed  to 
improve the functioning of the judiciary, reap the full benefits of the restructured network of 
courts  and  ultimately  increase  public  trust.  Efforts  to  strengthen  the  execution  of  judgments 
and further reduce the important backlog of pending cases are to be pursued. 

The legal and institutional framework for fighting corruption is, overall, in place in Serbia. An 
Anti-Corruption Agency was established and is competent in the areas of integrity of public 

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officials  and  control  of  party  funding.  Its  resources  were  recently  further  increased.  An 
enhanced  framework  for  controlling  financing  of  political  parties'  activities  and  electoral 
campaigns has been established in line with European standards. The Minister of Justice was 
appointed coordinator for the fight against corruption. The authorities have launched a review 
of  the  outdated  strategy  and  action  plan  for  the  fight  against  corruption.  The  State  Audit 
Institution has started to play a useful role in controlling public expenditure and uncovering 
irregularities.  The  customs  administration  and  the  police  have  stepped  up  their  internal 
controls resulting in a greater number of cases being investigated and sanctioned. Steps have 
also been taken towards specialisation of the law enforcement agencies and a greater number 
of cases have been prosecuted. Corruption remains prevalent in many areas and continues to 
be  a  serious  problem.  Stronger  political  will  is  essential  in  order  to  significantly  improve 
performance  in  combating  corruption.  Enhanced  investigation  capacity  and  coordination  of 
law  enforcement  bodies  are  indispensable.  The  track  record  of  investigations,  prosecutions 
and final convictions in corruption cases at all levels needs to be gradually and significantly 
built up. There are also concerns regarding supervision of public procurement, privatisation, 
spatial planning and construction permits. 

In  the  fight  against  organised  crime,  the  legal  framework  developed  by  Serbia  is  generally 
adequate and capacity has improved, including on international cooperation. This has led to 
significant  results,  such  as  the  dismantling  of  a  major  international  drug-trafficking  ring. 
Money  laundering  and  drug  smuggling  are  key  areas  of  concern  and  the  track  record  of 
investigations and convictions needs to be built up further. Capacity for proactive and better 
coordinated investigations and enhanced cooperation at regional and international levels also 
remain to be further developed. Technical capacity to carry out special investigative measures 
should  be  developed  within  the  law  enforcement  bodies,  under  the  direct  control  of  the 
judiciary.  

The  legal  and  policy  framework  for  human  rights  and  the  protection  of  minorities  in 
Serbia is, overall, in line with European standards. The Constitution guarantees a wide range 
of  human  rights  and  fundamental  freedoms  and  recognises  the  possibility  of  filing  a 
Constitutional  appeal  as  the  final  remedy  for  protection  of  human  rights.  However, 
implementation  of  the  legislation  needs  to  be  stepped  up.  Advanced  training  of  the 
administration, the police and the judiciary remain to be developed to ensure more active and 
consistent application of standards in this field.  

Human rights are generally respected in Serbia. The Ombudsman and the Commissioner for 
access  to  information  and  data  protection  are  playing  an  increasingly  effective  role  in  the 
oversight  of  the  administration.  The  legal  framework  to  combat  discrimination  has  been 
substantially  improved  and  mechanisms  have  been  set  up  to  oversee  its  implementation, 
which  is  at  an  early  stage.  The  authorities  have  also  been  paying  growing  attention  to 
safeguarding the respect of the freedom of assembly and freedom of association and the role 
of  civil  society.  The  newly  adopted  media  strategy  aims  at  substantially  clarifying  the  legal 
and  market  environment  in  which  media  outlets  are  operating.  More  comprehensive  and 
proactive  action  is  expected  from  the  relevant  institutions  in  cases  of  threats  and  violence 
against  journalists  and  media,  emanating  notably  from  radical  groups.  The  current  prison 
conditions are a matter of serious concern. A long awaited law on restitution as well as a new 
law on public property were adopted. Transparent and non discriminatory implementation of 
both  laws  has  to  be  ensured  and  further  measures  taken  to  fully  establish  legal  clarity  over 
property  rights.  The  Commission  will  monitor  the  implementation  and  application  of  these 
laws. 

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The legal and institutional framework for respecting and protecting minorities in Serbia is in 
place.  The  Constitution  guarantees  specific  rights  to  members  of  national  minorities  in 
addition  to  the  rights  guaranteed  to  all  citizens  and  provides  a  legal  basis  for  the  National 
Minority  Councils.  Political  representation  of  minorities  is  ensured.  At  State  level,  the 
Ombudsman and the Commissioner for Equality are exercising their prerogatives in this area. 
Serbia has established a comprehensive strategy for the integration of Roma and is currently 
progressing  in  its  implementation.  Active  social  inclusion  measures  have  been  taken,  in 
particular in the fields of health, education and housing. Measures have recently been taken to 
alleviate  obstacles  to  the  registration  of  'legally  invisible  persons'  which  will  improve  their 
access  to  basic  rights.  Further  serious  efforts,  including  financial  resources,  are  needed  in 
order to improve the status and socio-economic conditions of the Roma, who continue to be 
the  most  vulnerable  and  marginalised  minority,  as  illustrated  by  the  high  number  of  illegal 
settlements.  The  situation  of  refugees  and  internally  displaced  persons  remains  a  concern, 
even  though  significant  progress  was  achieved  in  recent  years  in  reducing  the  number  of 
collective centres. 

Serbia  generally  fulfils  the  conditions  of  the  Stabilisation  and  Association  Process. 
Cooperation  with  the  International  Criminal  Tribunal  for  the  former  Yugoslavia  has  greatly 
improved  since  2008  to  a  now  fully  satisfactory  level,  as  best  illustrated  by  the  arrests  and 
transfers to the Hague tribunal of Radovan Karadzic in 2008, Ratko Mladic and Goran Hadzic 
in  2011.  Serbia  is  committed  to  pursuing  this  cooperation  at  the  same  level.  It  participates 
actively  in  regional  initiatives  and  has  taken  significant  steps  to  foster  reconciliation.  The 
agreement  reached  with  Bosnia  and  Herzegovina,  Croatia  and  Montenegro  in  the  Sarajevo 
Declaration  Process  on  durable  solutions  for  refugees  and  IDPs  is  a  major  achievement. 
Serbia  has  made  good  progress  in  its  bilateral  relations  with  other  enlargement  countries, 
particularly Croatia, Bosnia and Herzegovina and Montenegro, while continuing to maintain 
good  relations  overall  with  neighbouring  EU  Member  States.  A  number  of  outstanding 
bilateral issues remain with its neighbours, in particular regarding border demarcation.  

Serbia  does  not  recognise  Kosovo3's  unilateral  declaration  of  independence.  It  maintains  its 
structures  in  Kosovo  and  organised  parallel  municipal  by-elections  in  May  2008,  which  is 
inconsistent  with  UNSCR  1244/1999.  On  the  basis  of  the  UN  General  Assembly  resolution 
adopted  on  9  September  2010,  which  had  been  tabled  jointly  by  Serbia  and  the  27  EU 
Member States, a process of dialogue between Belgrade and Pristina started in March. It has 
been conducted in a generally constructive spirit until September and it has led to agreements 
on  several  issues:  free  movement  of  goods  and  persons,  civil  registry  and  cadastre.  The 
agreements reached to date need to be implemented in good faith. Further results remain to be 
achieved  to  implement,  as  a  matter  of  priority,  the  principles  of  inclusive  and  functioning 
regional  cooperation  and  to  provide  sustainable  solutions  on  EU  acquis-related  matters  in 
sectors such as energy and telecommunications. All sides need to play their part in defusing 
the  tension  in  northern  Kosovo  and  allow  for  free  movement  of  persons  and  goods,  for  the 
benefit of the people of the region.  

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Under UNSCR 1244/1999 

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2. 

ECONOMIC CRITERIA 

The  present  assessment  is  made  on  the  basis  of  the  Copenhagen  criteria  related  to  the 
existence  of  a  functioning  market  economy,  as  well  as  the  capacity  to  cope  with 
competitive pressure and market forces within the Union. 

There is a broad political  consensus  in Serbia on  the fundamentals of a  market economy as 
well as a track record in the implementation of economic reforms. Serbia achieved a degree of 
macroeconomic  stability  that  allows  economic  operators  to  make  decisions  in  a  climate  of 
predictability. The economic policies of the past decade supported steady growth of close to 
5% on average, gradually declining inflation and a general improvement of living standards. 
However,  the  global  financial  and  economic  crisis  exposed  the  vulnerabilities  of  a  growth 
paradigm,  which  was  based  on  domestic  demand  financed  largely  by  borrowing  abroad,  as 
well  as  the  ensuing  limitations  of  the  policy  mix  to  respond  effectively  to  adverse  external 
shocks.  Recently,  substantial  progress  has  been  made  towards  strengthening  the  financial 
framework  and  the  quality  of  public  finances,  which  would  underpin  a  shift  to  more 
sustainable  and  balanced  growth,  driven  by  exports  and  investment.  The  free  interplay  of 
market  forces  has  developed,  albeit  at  a  slow  and  uneven  pace,  through  privatisation  and 
liberalisation of trade and prices. Progress has been achieved in facilitating market entry and 
exit. Economic integration with the EU is high. 

A number of structural weaknesses persist and hamper the economic performance. The state 
influence  in  the  economy  has  remained  high  due  to  the  slow  progress  of  privatisation  and 
price liberalisation. In spite of the steps towards establishing legal predictability and removing 
red tape, the business environment continues to be constrained by legal uncertainty. Lengthy 
enforcement  procedures  for  court  decisions  undermine  trust  in  the  legal  system.  Lack  of 
competition in certain sectors and significant infrastructure bottlenecks are a further drag on 
the  economic  potential.  Foreign  direct  investment  was  relatively  strong  prior  to  2008  and, 
following  a  substantial  drop  during  the  economic  crisis,  has  started  to  slowly  recover,  but 
Serbia needs to further improve the investment climate. Against a modest economic recovery, 
unemployment remains high and the social situation strife. Serbia needs to urgently  address 
structural  rigidities  on  the  labour  market,  including  the  mismatch  between  demand  for  and 
supply of skilled workforce. The informal economy remains an important challenge.  

3. 

ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP 

The ability of Serbia to assume the obligations of membership has been evaluated on the basis 
of the following indicators: 

the obligations set out in the Stabilisation and Association Agreement; 

progress with adoption, implementation and enforcement of the EU acquis. 

Overall, Serbia has smoothly implemented its obligations under the Interim Agreement and is 
generally respecting its commitments under the Stabilisation and Association Agreement.  

In 2008 Serbia adopted a National Programme for Integration into the European Union, which 
is a comprehensive and ambitious plan for the period 2008-2012 providing for approximation 
of  its  national  legislation  to  the  EU  acquis.  Since  then,  significant  progress  has  been  made 
with  adopting  legislation  aligned  with  the  EU  acquis,  particularly  on  the  internal  market, 
statistics,  trade-related  provisions,  customs  and  taxation.  Administrative  capacity  is  overall 

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well developed and the judiciary is undergoing a significant overhaul. However, the country 
faces challenges in implementing and enforcing legislation. Particular and continued attention 
to  the  fight  against  corruption  will  be  expected  over  time.  The  country  will  need  to  make 
additional efforts in order to assume the obligations of membership in the medium term. 

If it continues its efforts Serbia should, in the medium term, have the capacity to comply with 
the requirements of the acquis in the following fields:  

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

Company law; 

Fisheries; 

Taxation;  

Economic and monetary policy; 

Statistics; 

Enterprise and industrial policy; 

Science and research;  

Education and culture; 

Customs union; 

External relations;  

Foreign, security and defence policy; 

Financial and budgetary provisions. 

Serbia  will  have  to  undertake  additional  efforts  to  align  with  the  acquis  and  to 
implement it effectively in the medium term in the following fields: 

Free movement of goods; 

Freedom of movement for workers; 

Right of establishment and freedom to provide services; 

Free movement of capital; 

Public procurement; 

Intellectual property law; 

Competition policy; 

Financial services; 

Information society and media; 

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• 

• 

• 

• 

• 

• 

• 

Food safety, veterinary and phytosanitary policy; 

Transport policy; 

Energy; 

Social policy and employment; 

Trans-European networks; 

Regional policy and coordination of structural instruments; 

Consumer and health protection. 

Further  adjustments  of  the  legal  and  institutional  framework,  in  particular  strengthening  of 
administrative and implementation capacity are needed in the above areas. 

Serbia will have to make considerable and sustained efforts to align with the EU acquis and to 
implement it effectively in the medium term in the following fields: 

• 

• 

• 

• 

Agriculture and rural development; 

Judiciary and fundamental rights; 

Justice, freedom and security; 

Financial control. 

Considerable  adjustments  of 
legal  and 
strengthening of administrative and implementation capacity are needed in these areas. 

institutional  framework  and  significant 

the 

Regarding the environment and climate change, further coordinated and sustained efforts will 
be needed to align with the EU acquis and to implement it effectively. These should include 
substantial  investments  and  strengthening  of  the  administrative  capacity  for  enforcement  of 
legislation  in  order  to  achieve  compliance  on  the  most  important  issues,  including  climate 
change, in the medium term. Full compliance with the acquis could be achieved only in the 
long term and would necessitate higher levels of investment. 

C. 

CONCLUSION AND RECOMMENDATION 

In  the  light  of  substantial  reforms  over  the  last  years,  Serbia  has  considerably  progressed 
towards  fulfilling  the  political  criteria  related  to  the  stability  of  institutions  guaranteeing 
democracy, the rule of law, human rights and respect for and protection of minorities, set by 
the Copenhagen European Council in 1993, as well as the conditions of the Stabilisation and 
Association  Process.  Serbia  has  a  comprehensive  constitutional,  legislative  and  institutional 
framework which overall corresponds to European and international standards. Parliament has 
become far more effective in its legislative activity under the current legislature. The legal and 
institutional  framework  for  the  rule  of  law  is  comprehensive,  including  in  the  areas  of  the 
fight  against  corruption  and  organised  crime  where  initial  results  were  achieved.  The  legal 
framework for the protection of human rights and minorities is well developed and has started 
being implemented. Serbia has reached a fully satisfactory level in its cooperation with ICTY 

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and has taken an increasingly active role in fostering reconciliation in the region. Serbia has 
agreed to and participated in a process of dialogue with Kosovo to facilitate the lives of the 
people  which  has  led  to  several  agreements  (free  movement  of  persons  and  goods,  civil 
registry and cadastre) and Serbia has taken initial steps for implementation.  

As  regards  the  economic  criteria,  Serbia  has  taken  important  steps  towards  establishing  a 
functioning  market  economy  and  achieved  a  certain  degree  of  macroeconomic  stability  in 
spite of the global economic and financial crisis. However,  further efforts will be  necessary 
for  restructuring  the  economy  and  improving  the  business  environment,  in  particular  by 
strengthening the rule of  law and removing  red tape, enhancing competition and the role of 
the private sector as well as tackling rigidities on the labour market. In order to enable it to 
cope  in  the  medium  term  with  competitive  pressure  and  market  forces  within  the  Union, 
Serbia needs to pursue structural reforms to upgrade the productive capacity of the economy 
and create a climate conducive to increased foreign investment. 

Serbia  has  built  up  a  positive  track  record  in  implementing  its  obligations  under  the 
Stabilisation and Association Agreement and the Interim Agreement. 

Serbia would be in a position to take on the obligations of membership in the medium term, in 
nearly all acquis fields, provided that the alignment process continues and that further efforts 
are  made  to  ensure  the  implementation  and  enforcement  of  legislation.  Particular  attention 
needs to be paid to the areas of agriculture and rural development, judiciary and fundamental 
rights, justice, freedom and security and financial control. Full compliance with the acquis in 
the field of the environment and climate change could be achieved only in the long term and 
would necessitate increased levels of investment. 

Based  on  preliminary  estimates,  Serbia's  accession  would  have  a  limited  overall  impact  on 
European Union policies and would not affect the Union's capacity to maintain and deepen its 
own development. 

The  Commission  recommends  that  the  Council  should  grant  Serbia  the  status  of  candidate 
country, taking into account progress achieved so far and on the understanding that Serbia re-
engages  in  the  dialogue  with  Kosovo  and  is  moving  swiftly  to  the  implementation  in  good 
faith of agreements reached to date.  

Serbia  is  well  on  its  way  towards  sufficiently  fulfilling  the  political  criteria  set  by  the 
Copenhagen  European  Council  in  1993  and  the  conditions  of  the  Stabilisation  and 
Association process, provided that progress continues and that practical solutions are found to 
the problems with Kosovo. 

The Commission therefore recommends that negotiations for accession to the European Union 
should be opened with Serbia as soon as it achieves further significant progress in meeting the 
following key priority:  

Further  steps  to  normalise  relations  with  Kosovo  in  line  with  the  conditions  of  the 
Stabilisation and Association Process by: fully respecting the principles of inclusive regional 
cooperation;  fully  respecting  the  provisions  of  the  Energy  Community  Treaty;  finding 
solutions  for  telecommunications  and  mutual  acceptance  of  diplomas;  by  continuing  to 
implement in good faith all agreements reached; and by cooperating actively with EULEX in 
order for it to exercise its functions in all parts of Kosovo. 

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The Commission will present a report on Serbia's implementation of the above key priority as 
soon as sufficient progress has been achieved. 

Serbia is encouraged to maintain the momentum of reforms in pursuing the necessary degree 
of compliance with the membership criteria, with particular attention to the rule of law, and to 
continue  its  constructive  engagement  in  regional  cooperation  and  in  strengthening  bilateral 
relations with neighbouring countries. Implementation of the Interim Agreement, and from its 
entry into force, the Stabilisation and Association Agreement, are expected to continue. The 
Commission will continue to support these efforts through the IPA financial instrument. 

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