European Union vs. Serbia

Following the two devastating World Wars in the first half of the 20th century, a number of far-sighted European leaders in the late 1940s sought a response to the overwhelming desire for peace and reconciliation on the continent. In 1950, the French Foreign Minister Robert SCHUMAN proposed pooling the production of coal and steel in Western Europe and setting up an organization for that purpose that would bring France and the Federal Republic of Germany together and would be open to other countries as well. The following year, the European Coal and Steel Community (ECSC) was set up when six members - Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands - signed the Treaty of Paris.

The ECSC was so successful that within a few years the decision was made to integrate other elements of the countries' economies. In 1957, envisioning an "ever closer union," the Treaties of Rome created the European Economic Community (EEC) and the European Atomic Energy Community (Euratom), and the six member states undertook to eliminate trade barriers among themselves by forming a common market. In 1967, the institutions of all three communities were formally merged into the European Community (EC), creating a single Commission, a single Council of Ministers, and the body known today as the European Parliament. Members of the European Parliament were initially selected by national parliaments, but in 1979 the first direct elections were undertaken and have been held every five years since.

In 1973, the first enlargement of the EC took place with the addition of Denmark, Ireland, and the UK. The 1980s saw further membership expansion with Greece joining in 1981 and Spain and Portugal in 1986. The 1992 Treaty of Maastricht laid the basis for further forms of cooperation in foreign and defense policy, in judicial and internal affairs, and in the creation of an economic and monetary union - including a common currency. This further integration created the European Union (EU), at the time standing alongside the EC. In 1995, Austria, Finland, and Sweden joined the EU/EC, raising the membership total to 15.

A new currency, the euro, was launched in world money markets on 1 January 1999; it became the unit of exchange for all EU member states except Denmark, Sweden, and the UK. In 2002, citizens of those 12 countries began using euro banknotes and coins. Ten new countries joined the EU in 2004 - Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. Bulgaria and Romania joined in 2007 and Croatia in 2013, but the UK withdrew in 2020. Current membership stands at 27. (Seven of the new countries - Cyprus, Estonia, Latvia, Lithuania, Malta, Slovakia, and Slovenia - have now adopted the euro, bringing total euro-zone membership to 19.)

In an effort to ensure that the EU could function efficiently with an expanded membership, the Treaty of Nice (concluded in 2000; entered into force in 2003) set forth rules to streamline the size and procedures of EU institutions. An effort to establish a "Constitution for Europe," growing out of a Convention held in 2002-2003, foundered when it was rejected in referenda in France and the Netherlands in 2005. A subsequent effort in 2007 incorporated many of the features of the rejected draft Constitutional Treaty while also making a number of substantive and symbolic changes. The new treaty, referred to as the Treaty of Lisbon, sought to amend existing treaties rather than replace them. The treaty was approved at the EU intergovernmental conference of the then 27 member states held in Lisbon in December 2007, after which the process of national ratifications began. In October 2009, an Irish referendum approved the Lisbon Treaty (overturning a previous rejection) and cleared the way for an ultimate unanimous endorsement. Poland and the Czech Republic ratified soon after. The Lisbon Treaty came into force on 1 December 2009 and the EU officially replaced and succeeded the EC. The Treaty's provisions are part of the basic consolidated versions of the Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU) now governing what remains a very specific integration project.

UK citizens on 23 June 2016 narrowly voted to leave the EU; the formal exit took place on 31 January 2020. The EU and UK have negotiated and ratified a Withdrawal Agreement that includes a status quo transition period through December 2020, which can be extended if both sides agree.

The Kingdom of Serbs, Croats, and Slovenes was formed in 1918; its name was changed to Yugoslavia in 1929. Communist Partisans resisted the Axis occupation and division of Yugoslavia from 1941 to 1945 and fought nationalist opponents and collaborators as well. The military and political movement headed by Josip Broz "TITO" (Partisans) took full control of Yugoslavia when their domestic rivals and the occupiers were defeated in 1945. Although communists, TITO and his successors (Tito died in 1980) managed to steer their own path between the Warsaw Pact nations and the West for the next four and a half decades. In 1989, Slobodan MILOSEVIC became president of the Republic of Serbia and his ultranationalist calls for Serbian domination led to the violent breakup of Yugoslavia along ethnic lines. In 1991, Croatia, Slovenia, and Macedonia declared independence, followed by Bosnia in 1992. The remaining republics of Serbia and Montenegro declared a new Federal Republic of Yugoslavia (FRY) in April 1992 and under MILOSEVIC's leadership, Serbia led various military campaigns to unite ethnic Serbs in neighboring republics into a "Greater Serbia." These actions ultimately failed and, after international intervention, led to the signing of the Dayton Peace Accords in 1995.

MILOSEVIC retained control over Serbia and eventually became president of the FRY in 1997. In 1998, an ethnic Albanian insurgency in the formerly autonomous Serbian province of Kosovo provoked a Serbian counterinsurgency campaign that resulted in massacres and massive expulsions of ethnic Albanians living in Kosovo. The MILOSEVIC government's rejection of a proposed international settlement led to NATO's bombing of Serbia in the spring of 1999. Serbian military and police forces withdrew from Kosovo in June 1999, and the UN Security Council authorized an interim UN administration and a NATO-led security force in Kosovo. FRY elections in late 2000 led to the ouster of MILOSEVIC and the installation of democratic government. In 2003, the FRY became the State Union of Serbia and Montenegro, a loose federation of the two republics. Widespread violence predominantly targeting ethnic Serbs in Kosovo in March 2004 led to more intense calls to address Kosovo's status, and the UN began facilitating status talks in 2006. In June 2006, Montenegro seceded from the federation and declared itself an independent nation. Serbia subsequently gave notice that it was the successor state to the union of Serbia and Montenegro.

In February 2008, after nearly two years of inconclusive negotiations, Kosovo declared itself independent of Serbia - an action Serbia refuses to recognize. At Serbia's request, the UN General Assembly (UNGA) in October 2008 sought an advisory opinion from the International Court of Justice (ICJ) on whether Kosovo's unilateral declaration of independence was in accordance with international law. In a ruling considered unfavorable to Serbia, the ICJ issued an advisory opinion in July 2010 stating that international law did not prohibit declarations of independence. In late 2010, Serbia agreed to an EU-drafted UNGA Resolution acknowledging the ICJ's decision and calling for a new round of talks between Serbia and Kosovo, this time on practical issues rather than Kosovo's status. Serbia and Kosovo signed the first agreement of principles governing the normalization of relations between the two countries in April 2013 and are in the process of implementing its provisions. In 2015, Serbia and Kosovo reached four additional agreements within the EU-led Brussels Dialogue framework. These included agreements on the Community of Serb-Majority Municipalities; telecommunications; energy production and distribution; and freedom of movement. President Aleksandar VUCIC has promoted an ambitious goal of Serbia joining the EU by 2025. Under his leadership as prime minister, in 2014 Serbia opened formal negotiations for accession.

under the EU treaties there are three distinct institutions, each of which conducts functions that may be regarded as executive in nature:
European Council - brings together heads of state and government, along with the president of the European Commission, and meets at least four times a year; its aim is to provide the impetus for the development of the Union and to issue general policy guidelines; the Treaty of Lisbon established the position of "permanent" (full-time) president of the European Council; leaders of the EU member states appoint the president for a 2 1/2 year term, renewable once; the president's responsibilities include chairing the EU summits and providing policy and organizational continuity; the current president is Charles MICHEL (Belgium), since 1 December 2019, succeeding Donald TUSK (Poland; 2014 - 2019)
Council of the European Commission - consists of ministers of each EU member state and meets regularly in 10 different configurations depending on the subject matter; it conducts policymaking and coordinating functions as well as legislative functions; ministers of EU member states chair meetings of the Council of the EU based on a 6-month rotating presidency except for the meetings of EU Foreign Ministers in the Foreign Affairs Council that are chaired by the High Representative for Foreign Affairs and Security Policy
European Commission - headed by a College of Commissioners comprised of 28 members (one from each member country) including the president; each commissioner is responsible for one or more policy areas; the Commission's main responsibilities include the sole right to initiate EU legislation (except for foreign and security/defense policy), promoting the general interest of the EU, acting as "guardian of the Treaties" by monitoring the application of EU law, implementing/executing the EU budget, managing programs, negotiating on the EU's behalf in core policy areas such as trade, and ensuring the Union's external representation in some policy areas; its current president is Ursula VON DER LEYEN (Belgium) elected on 16 July 2019 (took office on 1 December 2019); the president of the European Commission is nominated by the European Council and formally "elected" by the European Parliament; the Commission president allocates specific responsibilities among the members of the College (appointed by common accord of the member state governments in consultation with the president-elect); the European Parliament confirms the entire Commission for a 5-year term.

The 27 member states that make up the EU have adopted an internal single market with free movement of goods, services, capital, and labor. The EU, which is also a customs union, aims to bolster Europe's trade position and its political and economic weight in international affairs.

Despite great differences in per capita income among member states (from $28,000 to $109,000) and in national attitudes toward issues like inflation, debt, and foreign trade, the EU has achieved a high degree of coordination of monetary and fiscal policies. A common currency - the euro - circulates among 19 of the member states that make up the European Economic and Monetary Union (EMU). Eleven member states introduced the euro as their common currency on 1 January 1999 (Greece did so two years later). Since 2004, 13 states acceded to the EU. Of the 13, Slovenia (2007), Cyprus and Malta (2008), Slovakia (2009), Estonia (2011), Latvia (2014), and Lithuania (2015) have adopted the euro; seven other member states - excluding Denmark, which has a formal opt-out - are required by EU treaties to adopt the common currency upon meeting fiscal and monetary convergence criteria.

The EU economy posted moderate GDP growth for 2014 through 2017, capping five years of sustained growth since the 2008-09 global economic crisis and the ensuing sovereign debt crisis in the euro zone in 2011. However, the bloc's recovery was uneven. Some EU member states (Czechia, Ireland, Malta, Romania, Sweden, and Spain) recorded strong growth, others (Italy) experienced modest expansion, and Greece finally ended its EU rescue program in August 2018. Overall, the EU's recovery was buoyed by lower commodities prices and accommodative monetary policy, which lowered interest rates and stimulated demand. The euro zone, which makes up about 70% of the total EU economy, performed well, achieving a growth rate not seen in a decade. In October 2017 the European Central Bank (ECB) announced it would extend its bond-buying program through September 2018, and possibly beyond that date, to keep the euro zone recovery on track. The ECB's efforts to spur more lending and investment through its asset-buying program, negative interest rates, and long-term loan refinancing programs have not yet raised inflation in line with the ECB's statutory target of just under 2%.

Despite its performance, high unemployment in some member states, high levels of public and private debt, muted productivity, an incomplete single market in services, and an aging population remain sources of potential drag on the EU's future growth. Moreover, the EU economy remains vulnerable to a slowdown of global trade and bouts of political and financial turmoil. In June 2016, the UK voted to withdraw from the EU, the first member country ever to attempt to secede. Continued uncertainty about the implications of the UK's exit from the EU (concluded January 2020) could hurt consumer and investor confidence and dampen EU growth, particularly if trade and cross-border investment significantly declines. Political disagreements between EU member states on reforms to fiscal and economic policy also may impair the EU's ability to bolster its crisis-prevention and resolution mechanisms. International investors' fears of a broad dissolution of the single currency area have largely dissipated, but these concerns could resurface if elected leaders implement policies that contravene euro-zone budget or banking rules. State interventions in ailing banks, including rescue of banks in Italy and resolution of banks in Spain, have eased financial vulnerabilities in the European banking sector even though some banks are struggling with low profitability and a large stock of bad loans, fragilities that could precipitate localized crises. Externally, the EU has continued to pursue comprehensive free trade agreements to expand EU external market share, particularly with Asian countries; EU and Japanese leaders reached a political-level agreement on a free trade agreement in July 2017, and agreement with Mexico in April 2018 on updates to an existing free trade agreement.

Serbia has a transitional economy largely dominated by market forces, but the state sector remains significant in certain areas. The economy relies on manufacturing and exports, driven largely by foreign investment. MILOSEVIC-era mismanagement of the economy, an extended period of international economic sanctions, civil war, and the damage to Yugoslavia's infrastructure and industry during the NATO airstrikes in 1999 left the economy worse off than it was in 1990. In 2015, Serbia's GDP was 27.5% below where it was in 1989.

After former Federal Yugoslav President MILOSEVIC was ousted in September 2000, the Democratic Opposition of Serbia (DOS) coalition government implemented stabilization measures and embarked on a market reform program. Serbia renewed its membership in the IMF in December 2000 and rejoined the World Bank and the European Bank for Reconstruction and Development. Serbia has made progress in trade liberalization and enterprise restructuring and privatization, but many large enterprises - including the power utilities, telecommunications company, natural gas company, and others - remain state-owned. Serbia has made some progress towards EU membership, gaining candidate status in March 2012. In January 2014, Serbia's EU accession talks officially opened and, as of December 2017, Serbia had opened 12 negotiating chapters including one on foreign trade. Serbia's negotiations with the WTO are advanced, with the country's complete ban on the trade and cultivation of agricultural biotechnology products representing the primary remaining obstacle to accession. Serbia maintains a three-year Stand-by Arrangement with the IMF worth approximately $1.3 billion that is scheduled to end in February 2018. The government has shown progress implementing economic reforms, such as fiscal consolidation, privatization, and reducing public spending.

Unemployment in Serbia, while relatively low (16% in 2017) compared with its Balkan neighbors, remains significantly above the European average. Serbia is slowly implementing structural economic reforms needed to ensure the country's long-term prosperity. Serbia reduced its budget deficit to 1.7% of GDP and its public debt to 71% of GDP in 2017. Public debt had more than doubled between 2008 and 2015. Serbia's concerns about inflation and exchange-rate stability preclude the use of expansionary monetary policy.

Major economic challenges ahead include: stagnant household incomes; the need for private sector job creation; structural reforms of state-owned companies; strategic public sector reforms; and the need for new foreign direct investment. Other serious longer-term challenges include an inefficient judicial system, high levels of corruption, and an aging population. Factors favorable to Serbia's economic growth include the economic reforms it is undergoing as part of its EU accession process and IMF agreement, its strategic location, a relatively inexpensive and skilled labor force, and free trade agreements with the EU, Russia, Turkey, and countries that are members of the Central European Free Trade Agreement.

Serbia's integration with the EU helped regulator reforms and promotion of telecom; EU development loans for broadband to rural areas; pandemic spurred use of mobile data and other services; wireless service is available through multiple providers; national coverage is growing rapidly; best telecom services are centered in urban centers; 4G/LTE mobile network launched; 5G tests ongoing with Ericsson and Huawei (2021)

the EU's Common Security and Defense Policy (CSDP) provides the civilian, military, and political structures for EU crisis management and security issues; the highest bodies are:

the Political and Security Committee (PSC), which meets at the ambassadorial level as a preparatory body for the Council of the EU; it assists with defining policies and preparing a crisis response

the European Union Military Committee (EUMC) is the EU's highest military body; it is composed of the chiefs of defense (CHODs) of the Member States, who are regularly represented by their permanent Military Representatives; the EUMC provides the PSC with advice and recommendations on all military matters within the EU

the Committee for Civilian Aspects of Crisis Management (CIVCOM) provides advice and recommendations to the PSC in parallel with the EUMC on civilian aspects of crisis management

the Politico-Military Group (PMG) provides advice and recommendations to the PSC on political aspects of EU military and civil-military issues, including concepts, capabilities and operations and missions, and monitors implementation

other bodies set up under the CSDP include; the Security and Defense Policy Directorate (SECDEFPOL), the Integrated approach for Security and Peace Directorate (ISP), the EU Military Staff (EUMS), the Civilian Planning and Conduct Capability (CPCC), the Military  Planning  and  Conduct  Capability (MPCC), the European Defense Agency, the European Security and Defense College (ESDC), the EU Institute for Security Studies, and the EU Satellite Center

as a political union, the EU has no border disputes with neighboring countries, but Estonia has no land boundary agreements with Russia, Slovenia disputes its land and maritime boundaries with Croatia, and Spain has territorial and maritime disputes with Morocco and with the UK over Gibraltar; the EU has set up a Schengen area - consisting of 22 EU member states that have signed the convention implementing the Schengen agreements or "acquis" (1985 and 1990) on the free movement of persons and the harmonization of border controls in Europe; these agreements became incorporated into EU law with the implementation of the 1997 Treaty of Amsterdam on 1 May 1999; in addition, non-EU states Iceland and Norway (as part of the Nordic Union) have been included in the Schengen area since 1996 (full members in 2001), Switzerland since 2008, and Liechtenstein since 2011 bringing the total current membership to 26; the UK (since 2000) and Ireland (since 2002) take part in only some aspects of the Schengen area, especially with respect to police and criminal matters; nine of the 13 new member states that joined the EU since 2004 joined Schengen on 21 December 2007; of the four remaining EU states, Romania, Bulgaria, and Croatia are obligated to eventually join, while Cyprus' entry is held up by the ongoing Cyprus dispute

Serbia with several other states protest the US and other states' recognition of Kosovo's declaration of its status as a sovereign and independent state in February 2008; ethnic Serbian municipalities along Kosovo's northern border challenge final status of Kosovo-Serbia boundary; several thousand NATO-led Kosovo Force peacekeepers under UN Interim Administration Mission in Kosovo authority continue to keep the peace within Kosovo between the ethnic Albanian majority and the Serb minority in Kosovo; Serbia delimited about half of the boundary with Bosnia and Herzegovina, but sections along the Drina River remain in dispute