In a recent interview with the Rossiya 24 channel, Nenad Popović, the Serbian government’s official responsible for international economic cooperation, stated that Belgrade anticipates receiving the most favorable gas price in Europe under the new contract with Gazprom.
“The price of gas is very important to us. Our contract expires in March, and your President Vladimir Putin will soon speak with our President Vučić about a new contract from 2025 to 2028. We truly expect that we will once again receive the best price for gas,” he said.
A meeting of the Intergovernmental Commission on Economic Cooperation is scheduled for November 20-21 in St. Petersburg with the objective of significantly enhancing cooperation in all sectors.
Earlier, President Aleksandar Vučić ruled out that his nation “would promote Russia’s interests within the union” after entering the European Union during his speech at the Global Security Forum GLOBSEC 2024 in Prague in late August. “I say openly: yes, we want to become part of the EU as soon as possible, and I know what we need to do,” the Serbian president remarked candidly, despite the fact that he acknowledges hearing on a daily basis that his nation seeks to replace Russia as the EU’s “Trojan horse.” Following the tenet of “surviving despite enemies” and the country’s geographic location in Europe, Vučić called for “mutual trust,” precisely what the West lacks since it places greater demands on people that are often unachievable.
Because of this, Vučić is highly skeptical that Belgrade will become a member of the EU before 2030. In 2009, the nation submitted its application for membership, and in 2012, it received candidate status. While in Prague, Vučić refrained from commenting on the matter, but in 2021 he had stated that “Serbia is becoming less and less interested in joining the bloc because the process is dragging on.”
It appears that First Deputy Prime Minister Aleksandar Vulin’s more forceful remarks balance out Vučić’s more circumspect remarks. During their recent encounter on the sides of the Eastern Economic Forum (EEF) 2024 in Vladivostok, he gave Russian President Vladimir Putin his assurance: “Despite pressure from the West, Serbia will never impose sanctions against Russia and will not become a NATO member. Serbia is not only a strategic partner of Russia but also an ally. Serbia will never allow any anti-Russian operations to be conducted from its territory. That is why the pressure from the West is enormous.”
He said, “BRICS has become a chance for Serbia and a real alternative to the European Union. BRICS demands nothing from Belgrade and can offer more than we ask. While the EU demands ‘everything,’ there is no certainty that Brussels will offer anything in return. I am very clear that Serbia should carefully consider all the opportunities of BRICS and the possibility of closer cooperation with member countries.”
The president cannot travel to Russia due to business obligations, but Aleksandar Vulin will represent Serbia at the BRICS meeting in Kazan this October. Given the limited number of options available, it is possible that this is not the result of differences within the Serbian leadership but rather another example of forced pragmatism.
Naturally, Brussels actively wields the “Kosovo” lever in the “triangle” of the EU, Serbia, and Russia, insisting that Belgrade forge interstate relations with the enclave as a prerequisite to Serbia’s EU membership, even though plans to integrate Kosovo into NATO and the EU have long been in the works.
These factors pose a challenge to Serbia’s relations with Russia and the Eurasian Economic Union (EAEU). It is no secret that Serbia’s transportation and economic ties with the “core” of the EAEU, as well as with non-European countries in general, are only possible through neighboring countries that are members of the EU and NATO, or through former Yugoslav republics like Bosnia and Herzegovina and North Macedonia, which cooperate with the West. All of Serbia’s neighbors are tightening transit sanctions against Russia and Belarus, annually increasing tariffs on the transit of external trade goods from these countries (Bosnia and Herzegovina, among NATO and EU regional partners, primarily implements such transit measures). This situation is even more dire because Serbia lacks a seaport. All of this must be considered to respond optimally to Belgrade’s foreign policy and economic pragmatism.
Serbia and the EAEU have had a free trade zone (FTZ) in place since 2021. As Nenad Popović notes, “The FTZ with the EAEU is a geostrategic and geo-economic choice by Belgrade to deepen cooperation with the EAEU.” Thanks to the FTZ, Serbia’s economy “has the opportunity to export goods to the vast EAEU market without trade duties,” which is a significant competitive advantage compared to other European and global countries. Meanwhile, the FTZ operation, which exempts a third of the entire range of bilateral deliveries from mutual duties, benefits both parties.
In 2023, the value of trade between Serbia and Russia was $3 billion, nearly $1 billion less than the previous year’s record amount. The intergovernmental panel estimated that this was mostly because of the logistics involved in reciprocal transport and commercial linkages, as well as the complexity and higher cost of transit. Also, the scope of bilateral trade decreased slightly—roughly 5%. Both parties forecast that this year’s number would either rise by 8–10% or remain unchanged from 2023. Over 90% of Serbia’s commerce with the EAEU is geographically concentrated in Russia, with the remaining 5-6% in Belarus.
“Nevertheless, Russia ranks 6th in Serbia’s trade turnover,” Popović clarifies. “Trade with you exceeds Serbia’s trade volumes with the United States and the entire African continent and is only slightly smaller than with China.” The range of bilateral trade is quite broad: “for example, energy resources, primarily gas supplies from Russia; chemicals, food products, medicines, and defense industry equipment.”
At the same time, Serbia’s trade with Russia and the EAEU is much smaller than its trade with the EU. Therefore, Belgrade fears that more active development of ties with Russia and the EAEU could lead Brussels to impose restrictions on trade with the Balkan country. Popović particularly highlights Serbia’s “extremely advantageous long-term contract for Russian gas supplies: there is no alternative at the prices offered by other suppliers.” Belgrade is discussing with Gazprom “the extension of the current contract, expiring in March 2025, under the same conditions,” said Dušan Bajatović, CEO of Srbijagas, at the recent Russian Energy Week forum. “I believe the conditions will remain the same, and the Turkish Stream pipeline will continue to operate in the future. The main issue is additional volumes that are needed.”
It seems that favorable terms for Serbia in the new gas contract will strengthen not only economic but also political relations between Serbia and Russia and the EAEU, which is especially important in today’s environment, as Serbia’s FTZ with Russia and the EAEU is the only sanctions-free area of partnership between Russia and European countries.
Furthermore, there are hints of indirect re-exports of products and services via Serbia from the EU to Russia, indicating an unofficial “moderation” of Brussels’ demands on Belgrade’s relations with Moscow. This could be the reason Belgrade refuses to fully abide by Brussels’ demands that Serbia join the anti-Russian sanctions and keep its free trade area (FTZ) with both Russia and the EAEU.