EU Urges Serbia Progress With Kosovo as Entry Talks Loom

The European Union urged Serbia to keep on mending ties with its former province of Kosovo, as well as strengthen the judiciary, step up the fight against corruption and bolster the economy as it seeks to join the bloc.

“Continued visible and sustainable progress in the normalization of relations with Kosovo” will remain “essential,” the European Commission said in a progress report today. EU leaders plan to start entry talks with Serbia by January.

Serbia and Kosovo signed a landmark agreement in April to improve relations, paving the way to reconciliation five years after Kosovo declared independence. The agreement is not supported by the Serbian community in Kosovo and the EU expects Prime Minister Ivica Dacic’s cabinet to “continue to encourage wide participation of Kosovo Serbs” in Nov. 3 local elections.

Serbia and Kosovo need deeper EU ties after the civil wars of the 1990s stunted the Balkan region’s transition from communism and wreaked economic havoc. Slovenia and Croatia are EU members, and Montenegro has started membership talks. The commission today urged granting Albania the status of candidate country and called for talks to start with the Republic of Macedonia. Bosnia-Herzegovina, divided between Serbian and Muslim-Croat enclaves, lags behind.

Serbs consider Kosovo the cradle of their culture and have vowed never to accept its independence. Kosovo is recognized by more than 90 countries, including the U.S. and 23 of the EU’s 28 member states.

Legal Uncertainty

The commission urged Serbia to ensure the independence of judges, root out corruption and strengthen crime-fighting. Serbia also needs to increase media freedom, protect minorities and vulnerable groups, the commission said.

Corruption and legal uncertainty hampers “the functioning of market mechanisms,” the commission said, citing a need to overhaul the economy to prepare for competition within the EU. Measures should aim at building a competitive private sector, in an economy where state presence is “significant,” state companies are unprofitable and the shadow economy “remains an important challenge.”

Serbia unveiled measures on Oct. 8 to consolidate public finances, as two recessions in three years led to a deepening deficit and swelling debt. The plan includes tax increases, a higher retirement age for women, lower subsidies to state-owned companies and crackdown on the shadow economy.

To contact the reporter on this story: Gordana Filipovic in Belgrade at gfilipovic@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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