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U.S. Department of State

Diplomacy in Action

Serbia (10/31/11)


October 31, 2011

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PROFILE

Geography
Area: Serbia (77,474 sq. km.) is slightly smaller than Maine.
Cities: Capital--Belgrade. Other cities--Novi Sad, Nis, Kragujevac, Subotica, Zrenjamin, Pancevo, and Cacak.
Terrain: Varied; in the north, rich fertile plains; in the east, limestone ranges and basins; in the southeast, mountains and hills.
Climate: In the north, continental climate (cold winter and hot, humid summers with well-distributed rainfall); central portion, continental and Mediterranean climate; to the south, hot, dry summers and autumns and relatively cold winters with heavy snowfall inland.

People (2011 est.)
Nationality: Noun--Serb(s); adjective--Serbian.
Population: 7,310,555.
Population growth rate (2009): -0.467%.
Rate of natural increase (does not include migration, 2009): -4.6%.
Ethnic groups: Serbian, with Hungarian, Bosniak, Romany, Albanian, Montenegrin, and other minorities.
Religions: Orthodox, with Roman Catholic, Muslim, Protestant minorities.
Languages: Serbian 88.3%, Hungarian 3.8%, Bosnian 1.8%, Romany 1.1%, others 4.1%.
Health: Infant mortality rate--6.52 deaths/1,000. Life expectancy--males 71.49 years, female 77.34 years.

Government
Type: Republic.
Constitution: Adopted in an October 28-29, 2006 referendum.
Branches: Executive--President (chief of state) Boris TADIC (since July 11, 2004); Prime Minister (head of government) Mirko CVETKOVIC (since July 7, 2008), Council of Ministers (cabinet). Legislative--Parliament. Judicial--Supreme Court of Cassation and Constitutional Court.
Political parties: Alliance of Vojvodina Hungarians (SVM), Bosniak Democratic Party of Sandzak (BDSS), Democratic Alliance of Vojvodina Croats (DSHV), Democratic Left of the Roma (DLR), Democratic Party (DS), Democratic Party of Serbia (DSS), G-17 Plus/United Regions of Serbia (G-17/URS), League of Social Democrats of Vojvodina (LSV), Liberal Democratic Party (LDP), Movement of Veterans of Serbia (PVS), New Serbia (NS), Party of Democratic Action (SDA--Bosniaks), Party of Democratic Action (PVD--Albanians), Party of United Pensioners of Serbia (PUPS), Serbian Progressive Party (SNS), Serbian Radical Party (SRS), Serbian Renewal Movement (SPO), Social Democratic Party of Serbia (SDPS), Social Democratic Union (SDU), Social Democratic League of Vojvodina (LSV), Social Liberal Party of Sandzak (SLPS), Socialist Party of Serbia (SPS--former Communist Party), United Serbia (JS), Together for Sumadija (ZS).
Suffrage: 16 years of age if employed; universal at 18.

Economy
GDP (2010): $40.28 billion.
GDP growth rate (2010): 1% (revised downward from 1.8%).
GDP per capita (2010): $5,370.
Inflation rate (2010): 10.3%.
Natural resources: Coal, petroleum, natural gas, antimony, copper, lead, zinc, timber, bauxite, gold, silver, navigable rivers.
GDP by sector (2009 percentages, latest data available): Agriculture 9.0%; mining and quarrying 1.2%; manufacturing 14.8%; electricity, gas, and water 3.2%; construction 4.7%; wholesale and retail trade, repair of vehicles 1.3%; hotels and restaurants 1%; transport, storage, and communication 7.5%; financial intermediation 2.8%; real estate, renting 15.6%; public administration and defense, compulsory social security 3.4%; education 4.2%; health and social work 5.4%; other community, social, and personal services 2.3%; private households with employed persons 0.1%.
Trade (2010): Exports--$9.79 billion. Major markets--Bosnia and Herzegovina, Montenegro, Germany, Italy. Imports--$16.73 billion. Major suppliers--Russia, Germany, Italy, China.

PEOPLE AND HISTORY
The first Serbian kingdom was created in 1170 A.D. by Stefan Nemanja, the founder of the Nemanjic dynasty, whose son was canonized as St. Sava and became the patron saint of the autocephalous Serbian Orthodox Church founded in 1219. Serbia's territories expanded under the rule of King Milutin, who seized territory in nearby Macedonia from the Byzantines, and reached their peak under Milutin's son, Stefan Dusan (1331-55). However, Serbian power waned after Stefan's death in 1355, and at the Battle of Kosovo (June 28, 1389) the Serbs were defeated by the Turks. Following the Battle of Smederevo in 1459, the Ottoman Empire exerted complete control over all Serb lands.

Serbs lived under the rule of the Ottoman sultans for nearly 370 years, though the Serbian Orthodox Church, with several disruptions, transmitted Serbian heritage and helped preserve Serbian identity during this period. Movements for Serbian independence began with uprisings led by Karadjordje Petrovic (1804-13) and Milos Obrenovic (1815-17), founders of two rival dynasties that would rule Serbia until World War I. Serbia became an internationally recognized principality under Turkish suzerainty and Russian protection after the Russo-Turkish War of 1828-1829. After waging war against Turkey in support of Bosnian rebels in 1876, Serbia formally gained independence in 1878 at the Congress of Berlin, largely thanks to Russian support. Following Austria-Hungary's annexation of Bosnia, Serbia led a successful coalition of Montenegrin, Bulgarian, and Greek troops (the Balkan League) that in 1913 seized remaining Ottoman-controlled territory in Europe and established Serbia as a regional military leader.

The assassination of Austrian archduke Franz Ferdinand on June 28, 1914 in Sarajevo by a Bosnian Serb, Gavrilo Princip, set off a series of diplomatic and military actions among the great powers that culminated in World War I. Austro-Hungarian and Bulgarian forces occupied Serbia soon after World War I began. After the collapse of Austria-Hungary at the war's end in 1918, Vojvodina and Montenegro united with Serbia, and former south Slav subjects of the Habsburgs sought the protection of the Serbian crown within the Kingdom of Serbs, Croats, and Slovenes. Serbia was the dominant partner in this state, which in 1929 adopted the name Yugoslavia.

The kingdom soon encountered resistance when Croats began to resent control from Belgrade. This pressure prompted King Alexander I to split the traditional regions into nine administrative provinces. During World War II, the Axis powers occupied Yugoslavia. Royal army soldiers, calling themselves Chetniks, formed a Serbian resistance movement, but the communist Partisans, with Soviet and Anglo-American help, succeeded in defeating the Chetniks and forcing German forces from Yugoslavia by 1944. In an effort to avoid Serbian domination during the postwar years, Bosnia and Herzegovina, Macedonia, and Montenegro were given separate and equal republican status within the new socialist federation of Yugoslavia; Kosovo and Vojvodina were made autonomous provinces within Yugoslavia.

Despite the appearance of a federal system of government in Yugoslavia, Serbian communists ruled Yugoslavia's political life for the next 4 decades under Josip Broz Tito, a former Bolshevik and committed communist. In 1948 after Tito made several significant foreign policy decisions without consulting Moscow, Yugoslavia was expelled from the Soviet bloc, signifying a split with Moscow that left Tito independent to accept aid from the Marshall Plan and become a founder of the Non-Aligned Movement. Communist rule transformed Serbia from an agrarian into an industrial society; however, by the 1980s, Yugoslavia's economy started to fail. With the death of Tito in 1980, separatist and nationalist tensions emerged in Yugoslavia.

In the late 1980s, Slobodan Milosevic propelled himself to power in Belgrade by exploiting Serbian nationalism, especially over Kosovo. In 1989, he arranged the elimination of Kosovo's autonomy in favor of direct rule from Belgrade. Belgrade ordered the firing of ethnic Albanian state employees, whose jobs were then taken by Serbs. The Albanian language was banned at the University of Pristina, cutting off higher education for ethnic Albanians in the province. As a result of this oppression, Kosovo Albanian leaders led a peaceful resistance movement in the early 1990s and established a parallel government funded mainly by the Albanian diaspora.

Between 1991 and 1992, Slovenia, Croatia, Bosnia and Herzegovina, and Macedonia all seceded from Yugoslavia. On April 27, 1992, in Belgrade, Serbia and Montenegro joined in passing the Constitution of the Federal Republic of Yugoslavia (F.R.Y.).

Kosovo's peaceful resistance movement failed to yield results, and in 1997 the Kosovo Liberation Army (KLA) began an armed resistance. The KLA's main goal was to secure the independence of Kosovo.

In late 1998, Milosevic unleashed a brutal police and military campaign against the separatist KLA, which included atrocities against civilian noncombatants. For the duration of Milosevic's campaign, tens of thousands of ethnic Albanians were either displaced from their homes in Kosovo or killed by Serbian troops or police. These acts, and Serbia's refusal to sign the Rambouillet Accords, prompted 79 days of bombing by NATO forces from March to June 1999 and led the UN Security Council (UNSC) to authorize, through UNSC Resolution 1244 (June 10, 1999), an international civil and military presence in Kosovo under UN auspices. The resolution called for UN interim administration of Kosovo and authorized the international civil presence to facilitate a process to determine Kosovo's status. Following Milosevic's capitulation, international forces--including the UN Mission in Kosovo (UNMIK) and the NATO-led security force KFOR--moved into Kosovo.

Routine federal elections in September 2000 resulted in a narrow official victory for Slobodan Milosevic and his coalition against Vojislav Kostunica, the consensus presidential candidate of the Democratic Opposition of Serbia (DOS), an umbrella group of 18 anti-Milosevic political parties. After Milosevic's victory was documented to be fraudulent, citizens across Serbia turned out in street protests in support of Kostunica. On October 5, 2000, Milosevic was forced to concede defeat after mass protests across Serbia. The new F.R.Y. President Vojislav Kostunica was soon joined at the top of the domestic Serbian political scene by the Democratic Party's (DS) Zoran Djindjic, who was elected Prime Minister at the head of the DOS ticket in parliamentary elections that December. Although initial reform efforts were highly successful, especially in the economic and fiscal sectors, by the middle of 2002, the nationalist Kostunica and the pragmatic Djindjic were openly in conflict with each other.

Despite the initial euphoria of replacing Milosevic's autocratic regime, the Serbian population by mid-2002 slid into apathy and disillusionment with its leading politicians in reaction to this political maneuvering. Two rounds of voting for the republic presidency in late 2002 failed because of insufficient voter turnout (Serbian law required participation by more than 50% of registered voters).

On March 12, 2003, Prime Minister Djindjic was assassinated by organized crime elements threatened by his pursuit of anti-crime measures. Zoran Zivkovic, a vice-president of Djindjic's DS party, was elected Prime Minister in March 2003, but a series of scandals plagued the new government, which ultimately led to early elections.

Republic of Serbia presidential elections were held on November 16, 2003, but the results were declared invalid because of insufficient voter turnout. Following the December 2003 parliamentary elections, a new minority government was formed with the Democratic Party of Serbia (DSS), G17+, and the Serbian Renewal Movement/New Serbia (SPO/NS) coalition and the tacit support of the Socialist Party of Serbia (SPS). Former F.R.Y. president Vojislav Kostunica was named Prime Minister.

In March 2002, the heads of the federal and republican governments signed the Belgrade Agreement, setting forth the parameters for a redefinition of Montenegro's relationship with Serbia within a joint state. On February 4, 2003, the F.R.Y. parliament ratified the Constitutional Charter, establishing a new state union and changing the name of the country from Yugoslavia to Serbia and Montenegro.

Also in 2002, the F.R.Y. Government established a commission to coordinate cooperation with the International Criminal Tribunal for the former Yugoslavia (ICTY) and began serving warrants for the arrest of persons indicted for war crimes who sought refuge in the country. The crackdown on organized crime following the assassination of Serbian Prime Minister Djindjic also resulted in the apprehension and transfer to The Hague of several persons indicted for war crimes. In 2004 and 2005, a significant number of ICTY indictees surrendered to the tribunal. In 2007, Serbia assisted in the arrest of two of the remaining six persons indicted for war crimes, Zdravko Tolimir and Vlastimir Djordjevic, and in 2008 the government arrested and extradited Stojan Zupljanin and Radovan Karadzic. The last two persons indicted for war crimes, Bosnian Serb General Ratko Mladic and Croatian Serb political leader Goran Hadzic, were arrested in 2011, on the eve of the issuing of an EC opinion on Serbia’s progress toward EU membership.

On May 21, 2006, the Republic of Montenegro held a successful referendum on independence and declared independence on June 3. Thereafter, the parliament of Serbia stated that the Republic of Serbia was the continuity of the state union, changing the name of the country from Serbia and Montenegro to the Republic of Serbia, with Serbia retaining Serbia and Montenegro's membership in all international organizations and bodies.

In mid-2007, the UNSC deadlocked on a way forward on Kosovo status and how to act on UN Special Envoy Maarti Ahtisaari’s Kosovo status proposal. On February 17, 2008, Kosovo declared its independence following a 120-day last-ditch effort by the European Union (EU)-Russia-U.S. Troika to facilitate an agreement between Serbia and Kosovo on the latter's status. The United States officially recognized Kosovo's independence the following day. Eighty-four nations had recognized Kosovo as of October 2011. Serbia has rejected its former province’s independence, and the Serbian Government challenged the legality of Kosovo’s unilateral declaration of independence in the International Court of Justice (ICJ), which issued an advisory opinion in July 2010 stating that Kosovo’s declaration of independence was in accordance with international law and did not violate UN Security Council Resolution 1244. Following the ICJ advisory opinion, Serbia agreed to engage in an EU-facilitated dialogue with Kosovo on practical issues, which began in Brussels in March 2011.

Serbia and Kosovo met several times in 2011 under the auspices of the EU-facilitated dialogue, reaching tentative agreements on several outstanding technical issues. This progress was mitigated by Serbia’s rejection of a customs stamp agreement in July, which resulted in the imposition by Kosovo of a reciprocal embargo on trade with Serbia. After a spike in tensions over the summer, during which Kosovo deployed its police to the two border crossings with Serbia in northern Kosovo, agreement on a customs stamp was reached at a session of the dialogue in early September. This agreement also stipulated that both countries would lift their mutual trade embargoes. It did not impact the presence of Kosovo officials at the two northern crossings, who remained in place.

GOVERNMENT AND POLITICAL CONDITIONS
After two rounds of voting in late 2002 and a third in November 2003 failed because of insufficient voter turnout, the election law was changed to allow for a valid election with turnout of less than 50% of registered voters. In elections held on June 27, 2004 Boris Tadic (DS) defeated Radical Party candidate Tomislav Nikolic by a slim margin and was elected President of Serbia.

Following the adoption of a new Constitution in October 2006, Serbia held parliamentary elections on January 21, 2007. A government was formed in May 2007, with a coalition of the DS, DSS, and G17+. The coalition chose Vojislav Kostunica to continue in his position as Prime Minister. On February 3, 2008, in run-off presidential elections, Boris Tadic again defeated Radical Party candidate Tomislav Nikolic by a slim margin and was re-elected President of Serbia. Following the collapse of the governing coalition in March 2008 in the wake of Kosovo’s independence, new parliamentary elections were held on May 11, 2008. The Democratic Party-led list, "For a European Serbia," won nearly 39% of the vote, and in July 2008 formed a coalition government with the Socialists and ethnic minority parties. The May 11, 2008 Serbian national election results are illustrated by the following chart:

Serbian Political Parties

Percentage
of vote

Seats in
Parliament

For a European Serbia--(ZES) DS, G-17, SPO, LSV, SDP 38.7% 102
Radicals (SRS) 29.1% 78
Democratic Party of Serbia (DSS) 11.3% 30
Socialists (SPS), (PUPS), (JS) 7.9% 20
Liberal Democratic Party (LDP) 5.2% 13
Hungarians (MK) 1.8% 4
Bosniaks Coalition 0.8% 2
Albanian Coalition 0.5% 1
Others--Below Threshold 4.7%  
Total 100% 250

In September 2008, Radical Party (SRS) deputy president and two-time presidential candidate Tomislav Nikolic split from the SRS and formed the Forward Serbia caucus. Together with former Radical General Secretary Aleksandar Vucic, Nikolic officially formed the Serbian Progressive Party (SNS) in October 2008. As of September 2011, the SNS held 20 seats in parliament due to defections from the SRS, while the SRS maintained 58 seats. The SNS joined two local governments in western Serbia in early 2009 and in December 2009 scored a victory over the DS in the Belgrade municipality of Vozdovac. Local observers have described these electoral victories, as well as an SNS rally in February 2011 in Belgrade that drew an estimated 50,000 participants, as signs of the party’s consolidation. The next parliamentary elections are due no later than May 2012.

Legislature
The Serbian National Assembly, a unicameral parliament, is the lawmaking body of the Republic of Serbia.

Principal Government Officials
President--Boris Tadic
Prime Minister and Minister of Finance--Mirko Cvetkovic
First Deputy Prime Minister and Minister of the Interior--Ivica Dacic
Deputy Prime Minister--Bozidar Djelic
Deputy Prime Minister--Jovan Krkobabic
Deputy Prime Minister--Verica Kalanovic
Minister of Foreign Affairs--Vuk Jeremic
Minister of Defense--Dragan Sutanovac
Ambassador to the U.S.--Vladimir Petrovic

Serbia maintains an embassy in the United States at 2134 Kalorama Rd., NW, Washington, DC 20008 (tel. 202-332-0333).

DEFENSE
The Serbian Armed Forces consist of two services--the Land Forces and the Air Defense Forces, comprising approximately 30,000 personnel. After the dissolution of Serbia and Montenegro, the Navy was transformed into a River Flotilla headquartered in Novi Sad and subordinated to the Land Forces. The Ministry of Defense, which has many uniformed personnel contained within its subordinate structures, such as the Military Intelligence and Security Agencies, the National Defense University, the Military Medical Academy, the Inspector General, and the Military Technical Institute, contained approximately 6,000 personnel total. As of January 1, 2011 the force had been fully professionalized, and an active and passive reserve had been introduced. In 2011, the Ministry of Defense budget was 2.2% of Serbia’s GDP--around U.S. $905 million. Serbia has been a member of NATO's Partnership for Peace (PfP) since 2006, and the Serbian Mission to NATO in Brussels became fully functional in mid-2010.

ECONOMY
Since the fall of Slobodan Milosevic, Serbia’s economic progress has been substantial, but economic reform and restructuring are continuing challenges for the Serbian Government. Unemployment, a lack of liquidity in the economy, corruption, and labor unrest remain ongoing political and economic problems. The dinar (RSD) has fallen by more than a third against the Euro since the onset of the global financial crisis in 2008, highlighting Serbia’s fragile and structurally weak economy. However, the dinar has stabilized in 2011, settling at around 100 RSD to the Euro.

On August 31, 2011 Serbian authorities and International Monetary Fund (IMF) officials reached an agreement, subject to approval by IMF management and the Executive Board, on a 1 billion Euro (approx. $1.4 billion) “Precautionary” Stand-By Arrangement (SBA) for a period of 18 months. The agreement, which will oblige the Serbian Government to undertake structural reforms in the labor market, property regime, and public enterprises, is conditioned on Serbia adopting both a rebalanced 2011 budget and a law on property restitution. Serbian Government officials have indicated that they do not intend to draw on the financial resources made available under the arrangement unless an external financial shock requires it. Serbia’s last SBA, a $4 billion credit line, expired in April 2011.

Serbia experienced a relatively healthy GDP growth rate in 2008 (5.5%), but the global economic crisis caused Serbia’s GDP to tumble, and growth turned negative (-3%) in 2009. A slow economic recovery commenced in 2010 (with 1% GDP growth), and the IMF projects growth of 2% for 2011. In late 2010, Serbia adopted a new model of economic growth based on increased savings, investment, production in tradable goods, and exports. The model has achieved some success. Exports, for example, rose by 26% in 2010, due in significant measure to the depreciation of the dinar and the incipient recovery of the global economy. Export-led growth continued through 2011, with exports increasing by 30.4% during the January-July 2011 period compared to the same period in 2010.

Rising inflation became a concern in the first half of 2011, peaking at 14.7% year-on-year in April. Inflation declined to 10.5% by August but remains significantly above the National Bank of Serbia’s (NBS) 3%-6% target range for this year. Inflation is expected to return to single digits by the end of 2011, but will not likely return to the NBS target band before next year. To combat inflation, the NBS raised its benchmark interest rate several times since the summer of 2010. By March 2011, the NBS benchmark rate stood at 12.25%, the highest in Europe. High interest rates have helped curb rising inflation but also tended to inhibit domestic investment and growth. In mid-2011, the NBS began to ease monetary policy and, as of September 8, 2011, the rate stood at 11.25%.

Growing inflation and official price increases for controlled products and services, such as public transportation, electricity, and natural gas, have compounded the economic difficulties facing Serbian citizens, whose average net incomes (minus taxes, medical insurance, and retirement contributions) have remained stagnant at approximately $540 per month. Poverty levels have risen steadily since the onset of the global financial crisis, reaching approximately 8.8% of the population at the end of 2010. The official unemployment rate stood at 22.2% as of April 2011, and unemployment levels in many provincial cities and among women and minorities exceeds 30%. The IMF’s projected 2% GDP growth rate for 2011 is not sufficiently robust to significantly reduce unemployment this year.

Foreign direct investment (FDI) was relatively strong prior to the global financial crisis ($2.2 billion in 2007 and $2.3 billion in 2008), but fell off in 2009 ($1.9 billion) and has remained at disappointing levels ($1 billion in 2010 and $820 million in January-June 2011). Efforts to attract additional FDI were dealt a setback in March 2011, when a tender to sell a majority stake in the state telecommunications company, Telekom Srbija, failed to attract a minimally acceptable bid. On the other hand, a number of leading foreign investors have recently announced significant expansions of their operations in Serbia.

Total U.S. direct investment in Serbia exceeds $1.6 billion. Among the leading U.S. investors are Philip Morris, U.S. Steel, Ball Packaging, Coca-Cola, PepsiCo, and Van Drunen Farms. Ohio’s Cooper Tire recently signed an agreement to invest in Serbian tire manufacturer Trayal. Similarly, Ball Packaging invested an additional €35 million (approx. $48 million) in its aluminum can factory in Zemun, effectively doubling its production capacity and adding 50 new jobs to the local economy. Many other leading U.S. firms, from a broad variety of industrial and service sectors, have a significant presence in Serbia. Other major international investors include Norway’s Telenor, with well over $1 billion invested, and Russia’s Gazprom Neft, which acquired a majority stake in the formerly state-owned oil company, Naftna Industrija Srbija, for 400 million Euros ($555 million at the prevailing exchange rate) in 2008. Belgium’s Delhaize Group recently purchased Serbia’s largest food retail chain, Delta Maxi, for $1.3 billion, although since Delta Maxi was owned by a Cyprus-based holding company Serbia will likely see minimal benefits from the transaction.

Economic reform has been moving forward in many areas, driven largely by Serbia’s decision to seek membership in the European Union (EU) and in the World Trade Organization (WTO). Serbia’s accomplishments in modernizing legislation to conform to EU and international standards in nearly all areas affecting the economy, from intellectual property rights to foreign trade, have been impressive. Implementation of these new laws, however, remains inconsistent. In addition, important sectors of the Serbian economy and society, such as education, health, and energy, have yet to undergo serious structural reforms. Political appointees preside over large, inefficient state enterprises that are run more as social welfare organizations than as modern businesses. Much of the economy and employment structure remains dominated by an inefficient public sector. More than 25% of all people employed in Serbia work for state-owned enterprises or the central and local governments. The World Bank estimates that two-thirds of all university graduates in Serbia work for the public sector, and only one-third in private enterprises.

Privatization is far from complete. In addition to the unsuccessful effort to privatize Telekom Srbija in 2011, approximately 100 “socially-owned” companies, whose privatization was to have been completed by the end of 2008, remain under state stewardship. Competition remains limited in key economic sectors, including certain agricultural subsectors (sugar, sunflower oil, soybean products, wheat seeds, mineral fertilizers, and some dairy products), food retailing, and energy, which are dominated by a handful of major market players.

Property rights remain unsettled to a significant degree. In September 2011, the Serbian Government approved and sent to Parliament for adoption a restitution law that addresses the state’s seizure of private assets since the onset of World War II. Though the restitution law will help clarify and settle titles to many properties, Serbia’s property rights regime remains in need of reform. Legal procedures for converting of “rights of use” of property to full property ownership rights are unclear, and conversion applications are processed very slowly, or often not at all, creating a great deal of uncertainty in local property markets. Serbia must legalize, register, and establish property titles to thousands of “illegal structures” that have been built throughout the country without licenses or proper registration in official property records. The central government is also contending with how to return thousands of public properties from the central government to local municipalities. These deficiencies in the property regime tend to inhibit real estate development and other investment projects.

FOREIGN RELATIONS
Serbia currently enjoys relatively stable diplomatic relations with all of its neighbors except Kosovo. Immediately preceding the NATO bombing campaign of the F.R.Y. in March 1999, the U.S. and most European countries severed relations with Belgrade, and the U.S. Embassy was closed. After October 5, 2000, foreign embassies, including that of the U.S., reopened and Serbia, as the successor state to the F.R.Y., regained its seat in such international organizations as the Organization for Security and Cooperation in Europe (OSCE) and the UN, and is actively participating in International Monetary Fund (IMF) and World Bank projects. In 2003, Serbia was admitted to the Council of Europe. Serbia joined NATO's Partnership for Peace in 2006 and in 2009 submitted its first Individual Partnership Program (IPP) to NATO. Public support for joining the Alliance remains low.

Serbia has strongly emphasized its desire to join the EU and has begun to implement a broad reform agenda to advance the government’s EU integration goals. Serbia and the EU signed a Stabilization and Association Agreement (SAA)--the first step toward eventual accession--in April 2008, but the EU immediately froze the related Interim Trade Agreement (ITA) pending full cooperation with the ICTY. Following ICTY Chief Prosecutor Serge Brammertz’s reports to the UN Security Council that he was satisfied with Serbia’s level of cooperation with the ICTY, the EU agreed in December 2009 to implement the ITA. The EU also implemented visa liberalization for Serbian citizens in December 2009, allowing visa-free travel to Schengen countries for business and tourism. Serbia submitted its candidacy application to the EU on December 22, 2009, and in June 2010 the EU agreed to submit Serbia’s SAA to member state parliaments for ratification. Following Serbia’s agreement to engage with Kosovo on practical issues in September 2010, the EU formally accepted Serbia’s membership application in October 2010 and set several political conditions for Serbia’s continued EU integration, including continued reforms, dialogue with Kosovo, and full ICTY cooperation. The European Commission issued its opinion on Serbia on October 12, 2011 recommending that Serbia be granted formal EU candidate status, with the understanding that Serbia re-engage in the EU-facilitated dialogue with Kosovo, and move swiftly to implement in good faith agreements reached to date. The Commission did not recommend a date for opening accession talks, until further significant progress has been achieved regarding normalizing relations with Kosovo. The European Council will need to decide in December whether or not to approve the Commission’s recommendation to grant Serbia candidate status.

In May 2011 Serbia arrested and extradited Ratko Mladic to the International Criminal Tribunal for the former Yugoslavia (ICTY) to stand trial for committing crimes against humanity in the early 1990s. In July, it also detained and extradited the last remaining fugitive, Goran Hadzic. With these arrests, Serbia had completed the most difficult chapters in its cooperation with the Hague Tribunal, according to President Tadic, and had accomplished a key prerequisite for European integration. However, Serbian cooperation with the ICTY is not finished. ICTY Chief Prosecutor Serge Brammertz visited Belgrade in September 2011 and commended Serbia for its actions, but stressed that Serbia needed to find and apprehend the people who facilitated Mladic and Hadzic’s evasion from arrest for more than 16 years.

Serbia's bilateral relationships with many countries were strained following Kosovo's independence in February 2008. In the days following Kosovo's independence, rioters in Belgrade attacked the embassies of several countries, including the United States, causing significant property damage. Serbia recalled its ambassadors for consultations from all countries that formally recognized Kosovo. Serbia returned its ambassadors to EU countries in July 2008 and to the remaining countries in October 2008.

Government officials declared their intent to pursue all peaceful, political, and diplomatic means to retain Kosovo and sought a UN General Assembly resolution to request that the International Court of Justice (ICJ) issue an advisory opinion on the legality of Kosovo's declaration of independence. After a vigorous lobbying campaign, on October 9, 2008, the Serbian resolution passed in the UN General Assembly. Serbia, the United States, and other UN member states presented their legal positions to the Court through written briefs and oral presentations in 2009. Kosovo, although not a UN member, was permitted to participate in the written and oral proceedings, as the authors of Kosovo’s declaration of independence. On July 22, 2010, the ICJ released its advisory opinion decisively affirming that Kosovo’s declaration of independence was in accordance with international law and did not violate UN Security Council Resolution 1244.

Aside from Kosovo, Belgrade has made efforts to improve relations with its regional neighbors. In March 2010, the National Assembly passed a resolution condemning the crimes committed at Srebrenica in 1995, which also reaffirmed the territorial integrity of Bosnia and Herzegovina, and the Serbian Government continues to state its full support for Bosnia and Herzegovina’s territorial integrity. In June 2011, President Tadic made his first formal visit to Sarajevo. President Tadic and Croatian President Josipovic have taken steps to improve bilateral relations between Serbia and Croatia, working to resolve longstanding obstacles to greater cooperation, including refugee, property, border, and war crimes issues. In early September 2011, Serbia hosted the Regional Summit of Heads of State of South Eastern Europe, which was attended by the Presidents of Croatia, Montenegro, Macedonia, Albania, and Bulgaria.

Foreign Aid
At the social, political, and geographic crossroads between Eastern and Western Europe, Serbia occupies a key strategic juncture in the Balkans. The United States has been engaged in assisting Serbia's transition to a market-oriented democracy since 1997. Despite political uncertainty, U.S. Government assistance to Serbia continues to promote opportunities for economic growth, build capacity with key counterparts, and work steadily to move the country toward stability and Euro-Atlantic integration.

U.S. assistance to Serbia is strategically targeted to address priority U.S. foreign policy objectives and to promote Serbia's successful transition to a functioning market economy and stable pluralistic democracy. These resources, although modest in comparison to the European Union and other multilateral donors, have proven to be instrumental in leveraging other investments and in focusing Serbia's reform agenda.

Annual congressional restrictions have been imposed on U.S. assistance to Serbia in order to ensure that the country meets its obligation to comply with the rulings of the International Criminal Tribunal for the former Yugoslavia (ICTY).

U.S.-SERBIA RELATIONS
After severing diplomatic relations in March 1999, the U.S. Embassy formally reopened in May 2001. The Serbian Embassy in Washington and the U.S. Embassy in Belgrade have reestablished bilateral relations and provide a full range of consular services. Serbia withdrew its ambassador to Washington from February to October 2008 in protest of U.S. recognition of Kosovo’s independence. Vice President Joseph Biden visited Serbia in May 2009 and met with President Tadic, Prime Minister Cvetkovic, and Defense Minister Sutanovac. Vice President Biden’s visit was the highest-level U.S. visit to Serbia since Vice President George H.W. Bush’s visit in September 1983 and signaled an interest in energizing U.S.-Serbia relations. In 2009 and 2010, other high-ranking U.S. officials, including Secretary Clinton, visited Serbia and met with key leaders in an effort to bolster Serbia’s European integration path.

Principal U.S. Embassy Officials
Ambassador--Mary Burce Warlick
Deputy Chief of Mission--Earle Litzenberger
Political Counselor--Matthew Palmer
Economic Counselor--Douglas Apostol
Management Counselor--Jeffrey Cellars
Public Affairs Counselor--Ryan Rowlands
Consul General--Peter Marigliano
Defense Attache--Col. Paul Brotzen
Senior Commercial Officer--Bradley Harker
USAID Mission Director--Susan Fritz

The U.S. Embassy in Serbia is located at Kneza Milosa 50, 11000 Belgrade (tel. 381-11-361-9344).



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