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EU Urges Serbia Progress With Kosovo as Entry Talks Loom

Oct. 16 (Bloomberg) -- The European Union urged Serbia to keep 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.

The EU will formally open talks with the Balkan state by January “at the latest,” Enlargement Commissioner Stefan Fule told reporters in Brussels today.

Serbia and Kosovo signed a landmark agreement in April to improve relations, paving the way to reconciliation five years after Kosovo declared independence. The Serbian community in Kosovo does not support the pact, and the EU wants Prime Minister Ivica Dacic’s cabinet to “continue to encourage wide participation of Kosovo Serbs” in Nov. 3 local elections before it begins accession talks.

“The normalization process with Kosovo is to continue,” Fule said, presenting a European Commission progress report, adding that it would be part of the negotiating framework.

The EU has also urged Kosovo to ensure next month’s vote is a “success.” The Balkan state will start talks on Stabilization and Accession Agreement, the first step toward accession, this month and could win visa-free travel for its citizens after an EU mission completes a report in the first half of 2014, Fule said.

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.

Deeper Ties

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.

The commission also 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, it 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.

Strengthening EU

Following two recessions in three years that led to a deepening deficit and swelling debt, Dacic’s government has unveiled a broad budget consolidation plan. It includes tax increases, a higher retirement age for women, lower subsidies to state-owned companies and crackdown on the shadow economy.

The commission urged his administration to take measures to build a competitive private sector in an economy where state presence is “significant,” state companies are unprofitable and the shadow economy “remains an important challenge.”

Countries aspiring to join the EU will have to strengthen their economies and give the bloc’s citizens “one more reason to believe that enlargement is strengthening the European Union and not weakening it,” Fule said.

After accession talks begin next year, the commission may open two more negotiating chapters once the commission screens progress on judiciary, fundamental rights, justice, freedom and security, and issues a report by mid-2014, Fule said.

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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