Politiko: EU prepares to cut up to 1,5 billion euros in funding to Serbia over democracy concerns

Serbia is facing a loss of up to 1,5 billion euros in European Union funds, as the European Commission considers suspending payments due to the country's democratic backsliding and close ties with Russia.

The Balkan country is not a member of the EU, but having opened accession talks in 2014, it is eligible for funds and grants to help it implement legal reforms. A decision to suspend payments would further complicate the so-called EU enlargement process, with countries like Ukraine and Montenegro rapidly seeking to join and influential states like France urging caution, Politiko writes.

"We are increasingly concerned about what is happening in Serbia," EU Enlargement Commissioner Marta Kos told Politiko. "From laws undermining the independence of the judiciary to crackdowns on protesters and constant interference in the work of independent media."

Kos said the Commission is assessing whether the country still meets the conditions for "payments under EU financial instruments".

Pressure has been mounting within the Commission in recent weeks to withhold that money, said four EU officials working with enlargement countries, who spoke on condition of anonymity in order to speak openly. The EU has publicly criticized judicial reforms pushed by Serbian President Aleksandar Vučić, whose government has faced mass protests, Politiko reports.

Danijel Apostolović, Serbia's ambassador to the EU and chief negotiator with the Union, told Politiko that he is "confident that we will not reach that point" of suspending funding and that "we are not giving up on full EU membership."

Belgrade, as Apostolović said, remains involved in intensive discussions with the Commission.

A package of laws to reorganize courts and change the way judges and prosecutors are appointed represented a "serious step backward" for Serbia, Kos warned when the laws were announced.

The Venice Commission, a legal advisory body of the Council of Europe, is due to provide an expert opinion on the controversial changes to the law in Serbia at the end of the month.

That opinion could be an incentive for the Commission to freeze Serbia's funding, two EU officials Politiko spoke to suggested. Kos said she would demand that Serbia "harmonize its judicial laws with the recommendations of the Venice Commission."

Belgrade has "clearly stated" that it will follow the recommendations of the Venice Commission "as soon as it receives them", Apostolović said.

Balancing towards Russia

The EU is the largest provider of financial support to Serbia, providing more than €586 million in grants from 2021 to 2024. Up to €1,5 billion more is available conditional on reforms. According to the Serbian government, the country has received more than €7 billion in EU funds and investments since 2000.

But Serbia has long pursued a delicate balancing act in its relations with the EU, simultaneously building closer ties with Moscow while receiving money from Brussels.

Sofija Todorović, director of the Balkan human rights NGO YIHR, told Politiko that media freedoms and the rule of law in Serbia are "on the line" due to government pressure on journalists, and called on the Commission to intervene "before almost complete darkness reigns in Serbia."

The EU's patience with Belgrade has been wearing thin in recent months, and a scathing report on the country's progress in the enlargement process from November last year warned of regression and an "anti-EU narrative" at the "highest levels" of Serbian politics.