The controversial Justice reforms approved by the Serbian Parliament in January, the so-called Mrdic laws, could cost the Balkan country up to 1.5 billion euros following the announcement by the Enlargement Commissioner, Marta Kos, this week. This amount represents the remaining funds from the EU Growth Plan allocated to Serbia out of the total of six billion euros for the period between 2024 and 2027 for the six Western Balkans candidate countries.
The purpose of the Growth Plan is to stimulate the economies of these countries and accelerate their approach to the EU. However, payments are conditioned on reforms, especially those related to judicial independence and the fight against corruption. The Plan concerns Albania, Kosovo, North Macedonia, Montenegro (the country furthest along in its path to the EU), Bosnia, and Serbia. The latter received its first payment of 56.5 million euros in mid-January, out of a total of 1.58 billion euros planned.
Kos revealed last Thursday at the University of Fribourg in Switzerland that the EU will freeze the funds allocated to Serbia, a decision that has not yet been officially confirmed by Brussels. The commissioner accused Belgrade of a "regression" in terms of judicial reforms, specifically referring to the changes made by the Parliament without consulting prosecutors, judges, or other specialized bodies. Nor with the EU.
These reforms grant more powers to court presidents over judges and eliminate guarantees ensuring the independence of prosecutors, raising concerns within the EU and the Council of Europe. The Venice Commission, a body of the latter institution not belonging to the EU, recently published a report with recommendations to amend these laws. The European Commission then stated that Serbia must include these recommendations as soon as possible.
"For now, we have halted all payments from the Growth Plan because there has been a regression in the field of Justice," declared Kos in Fribourg when asked about Serbia. "Until this is corrected, they cannot benefit from European financial support", added the commissioner. She also criticized setbacks in the rule of law, democracy, and press freedom.
"Serbia is strongly polarized today", she stated, referring to the tense political climate in the country after almost a year and a half of student protests against corruption following the accident at the Novi Sad train station on November 1, 2024. "Serbia has been a candidate for over a decade, and unfortunately, we observe these setbacks," added the commissioner, who also criticized the foreign policy of the Balkan country for its proximity to the Kremlin. "You can't have a foot in two camps", she pointed out.
"We have a rule: before joining the EU, the State must fully comply with the EU's foreign and security policy. This means you can't be on two sides at once. At some point, Serbia will have to decide what is most important for its development," she affirmed. Kos believes that recent events in Serbia demonstrate that "there are forces that really disagree with how the Government and the President govern the country." "Once again, we are willing to help, but Serbia will have to yield," she concluded on this matter.
"The decision is not surprising", assesses Adnan Cerimagic, an analyst from the European Stability Initiative think tank. For him, reforms in Serbia have been stagnant for some time, but what has recently happened in the judiciary is a "clear and well-documented setback" that ignores Brussels' warnings.
According to Cerimagic, the reaction of pro-government media reveals nervousness: "The Government's and its media's reaction, downplaying the announcement and distorting Kos's words, suggests that they are still concerned about the EU's stance. It remains to be seen if this measure will be enough to drive real change."
"The funds have not been officially frozen, the evaluation process is still ongoing awaiting the Venice Commission," clarifies journalist and analyst Sojija Popovic from European Western Balkans. However, she points out that the novelty is the confirmation that there will be no further disbursements until Belgrade acts: "Brussels no longer trusts Serbia's reforms and demands genuine progress".
Popovic highlights that these amendments weaken the Organized Crime Prosecutor's Office (JTOK), which is investigating high-ranking officials like the Minister of Culture, Nikola Selakovic, and the corruption scheme following the Novi Sad station accident. "The European Commission must insist on restoring the situation prior to the laws, although it seems unlikely," she concludes.
On the other hand, Michael Martens, Balkans correspondent for the Frankfurter Allgemeine Zeitung, emphasizes that the EU must apply the same rigor it had with Poland or Hungary, now as member states: "It must not allow itself to be treated as an ATM from which money is withdrawn while ignoring the bank's rules," he states, summarizing the position with a motto: "Our money, our rules".
However, Martens warns that the punishment must be accompanied by real incentives. According to the analyst, the enlargement policy has lost credibility after 13 years without new admissions, making it difficult for reformist forces to win elections. "You can't win majorities by promising something that no one believes will ever come," he concludes, pointing out that beyond funds, the EU needs an attractive and realistic offer to not definitively lose its influence in the Balkans.