Serbia: Current Issues and U.S. Policy

Steven Woehrel
Specialist in European Affairs

Serbia faces an important crossroads in its development. It is seeking to integrate into the European Union (EU), but its progress has been hindered by a failure to arrest remaining indicted war criminals and by tensions with the United States and many EU countries over the independence of Serbia's Kosovo province. 

Parliamentary elections were held in Serbia on May 11, 2008. On July 7, the Serbian parliament approved a new government coalition led by pro-Western forces, but which also includes the Socialist Party (once led by indicted war criminal Slobodan Milosevic). The global economic crisis poses serious challenges for Serbia. The downturn has required painful budget cuts. In January 2009, the International Monetary Fund approved a $530 million stand-by loan for Serbia and another $4.2 billion loan in April. Serbia has also received loans from the World Bank and EU. 

Serbia's key foreign policy objectives are to secure membership in the European Union and to hinder international recognition of Kosovo's independence. The European Union signed a Stabilization and Association Agreement (SAA) with Serbia on April 29, 2008. It provides a framework for enhanced cooperation between the EU and Serbia in a variety of fields, with the perspective of EU membership. In December 2009, the EU agreed to allow the trade provisions of the SAA to be implemented, although ratification of the accord and the implementation of the remaining provisions awaits an EU determination that Serbia is fully cooperation with the former Yugoslavia war crimes tribunal. In late December 2009, Serbia submitted an application to join the EU. It hopes to join the organization as early as 2014, although many observers are skeptical about the likelihood of such a rapid accession. 

Serbia has vowed to take "all legal and diplomatic measures" to preserve Kosovo as part of Serbia. So far, 65 countries, including the United States and 21 of 27 EU countries, have recognized Kosovo's independence. However, Russia, Serbia's ally on the issue, has used the threat of its Security Council veto to block U.N. membership for Kosovo. Serbia won an important diplomatic victory when the U.N. General Assembly voted on October 8, 2008, to refer the question of the legality of Kosovo's declaration of independence to the International Court of Justice. A decision on the case is expected later this year. 

In December 2006, Serbia joined NATO's Partnership for Peace (PFP) program. PFP is aimed at helping countries come closer to NATO standards and at promoting their cooperation with NATO. Although it supports NATO membership for all of its neighbors, Serbia is not seeking NATO membership. This may be due to such factors as memories of NATO's bombing of Serbia in 1999, U.S. support for Kosovo's independence, and a desire to maintain close ties with Russia. U.S.-Serbian relations have improved since the United States recognized Kosovo's independence in February 2008, when Serbia sharply condemned the U.S. move and demonstrators sacked a portion of the U.S. Embassy in Belgrade. During a May 2009 visit to Belgrade, Vice President Joseph Biden stressed strong U.S. support for close ties with Serbia. He said the countries could "agree to disagree" on Kosovo's independence. He called on Serbia to transfer the remaining war criminals to the ICTY, promote reform in neighboring Bosnia, and cooperate with international bodies in Kosovo. 

Date of Report: January 21, 2010
Number of Pages: 11
Order Number: RS22601
Price: $29.95

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