News & Analysis

Serbia’s president ‘proud’ of country’s absence from EU financial assistance package

emerging europe serbia president vucic

The European Commission has adopted a proposal for a macro-financial assistance (MFA) package worth three million euros for 10 enlargement and neighbourhood partners to help them to limit the economic fallout of the coronavirus pandemic. The proposal comes on top of the ‘Team Europe’ strategy, the EU’s targeted response to support partner countries’ efforts in tackling the coronavirus pandemic. It represents an important demonstration of the EU’s solidarity with these countries at a time of unprecedented crisis.

The proposal, following a preliminary assessment of financing needs, provides for the MFA funds to be distributed as follows: Albania (180 million euros), Bosnia and Herzegovina (250 million euros), Georgia (150 million euros), Kosovo (100 million euros), Moldova (100 million euros), Montenegro (60 million euros), North Macedonia (160 million euros), and Ukraine (1.2 billion euros). Jordan (200 million euros) and Tunisia (600 million euros) are also included.

Notably absent from the list is Serbia, whose president Aleksandar Vučić was yesterday forced to explain why.

“This is not EU aid, these are loans,” he told reporters. “I am proud that Serbia is not on that list, the document states that it is given to countries that have significant disturbances in the balance of payments system, and we don’t have them. We will have problems, but less than others.”

The Serbian president has also announced that the country would soon ease lockdown restrictions.

“Shops will reopen next week, and everything else from May 4,” he said. “Get ready, let’s start working.”

The European Union’s MFA funds will be made available for 12 months in the form of loans on highly favourable terms to help the 10 countries cover their immediate, urgent financing needs. Together with the International Monetary Fund’s support, the funds can contribute to enhancing macroeconomic stability and creating space to allow resources to be allocated towards protecting citizens and mitigating the coronavirus pandemic’s negative socio-economic consequences. The instrument also remains available for other eligible countries experiencing balance-of-payments difficulties.

To benefit from an MFA, countries should meet certain political pre-conditions in terms of respect of democratic principles, human rights and rule of law. They should also benefit from an IMF financial assistance programme. In the implementation of the assistance, the Commission will ensure consistency with recent and ongoing MFA operations.

“Supporting our neighbours is essential during this time of crisis to keep the entire region stable. As part of the EU’s global response to the coronavirus pandemic, we need to help our neighbouring countries to cushion the worst of its economic impact. These ‘crisis MFA programmes’ will assist 10 countries in ensuring macro-economic stability and protecting their people and companies during the crisis,” said Valdis Dombrovskis, the executive vice president of the Commission’s An Economy that Works for People programme.

Paolo Gentiloni, European Commissioner for Economy, added: “European solidarity must not stop at the borders of our Union. Because in this global crisis, we stand or fall together. Today the European Commission is taking a decisive step to help ten of our neighbours in their fight against the Coronavirus. I call on the European Parliament and the Council to swiftly agree this important package.”

In addition to MFA, the EU is supporting the Western Balkans and its immediate neighbourhood through several other instruments, including humanitarian aid, budget support, technical assistance and guarantees from the European Fund for Sustainable Development to support investment in sectors most affected by the coronavirus pandemic.

The Commission’s proposal is subject to adoption by the European Parliament and the Council of the EU. Given the urgent need for this support, the Commission has said that it is counting on the cooperation of co-legislators to ensure its swift adoption.

The Commission will disburse the first installment as swiftly as possible after adoption and upon the agreement of a Memorandum of Understanding with each partner country. The second installment could be disbursed in the fourth quarter of 2020 or in the first half of 2021, provided that the policy measures attached to it have been implemented in a timely manner.

Photo: Serbian presidency official Twitter account

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