Contents

• Overview
• Political Developments
• Migration
• Economic Conditions
• Relations with Kosovo
• Border Adjustments
• Relations with the EU
• Relations with Russia
• Relations with the United States
• Issues for Congress

Summary

Following the conflicts in the late 1990s in the countries of the former Yugoslavia, the prospect of membership in the Euro-Atlantic community and the active presence of the United States and European Union (EU) in the Western Balkans provided a level of stability that allowed most of the countries of the region to pursue reform and adopt Western valuesadopt economic and political reforms. During this time, Slovenia and Croatia joined the European Union (EU)EU. These countries, along with Albania and Montenegro, also joined NATO. Montenegro became NATO's 29^th member on June 5, 2017. Other nationsOther countries of the Balkans are at various stages on the path toward EU orpursuing EU and NATO membership.

However, many observers in Europe and the United States have expressed concern that political stability in the Western Balkans, sometimes referred to as Europe's "inner courtyard," remains tenuous. Several of these countries have experienced governmental and political crises, sometimes involving third-party interference, as well as stagnating economies, high unemployment, and an exodus of people from the regionhigh rates of emigration. These crises have raised cautions that the continuation of or sudden increase in these factors could provide a vacuum in which outside political meddling, concerns that any decrease in EU or U.S. presence could create a regional vacuum in which transnational crime, radicalization, or terrorism could flourish.

At the center of the Balkans lies Serbia, which occupies a key strategic juncture at the social, political, and geographic crossroads between Eastern and Western Europe. Some observers see Serbia as more stable politically than several other countries in the region, despite difficult historical Furthermore, some observers are concerned with the growing economic and political role of Russia, China, and other states whose agendas in the Western Balkans might conflict with U.S. and EU interests in the region. Some observers see Serbia as relatively stable, despite its historically difficult relations with its neighbors, its ongoing dispute with Kosovo, recent concerns over its commitment to democratic developmentrule, and theits desire to balance its aspirationsorientation toward the West with its historical ties to Russia. Some also view Serbia as potentially the engine of economic growth for the entire Balkan region. At the same time, others view Serbia as an important piece in the geostrategicgeopolitical competition in the Western Balkans between the EU, the United States,West and Russia.

U.S. relations with Serbia have been rocky at times, due to past U.S. interventions in the conflicts in Bosnia and Kosovo and the U.S. recognition of Kosovo's independence. Nevertheless, relations between Washington and Belgrade seem to have improved recently; today, they appear to be cordial. Between 2001 and 2017, the United States provided close to $800 million in aid to Serbia to help stimulate economic growth, strengthen the justice system, and promote good governance. Despite the United States' disagreement with Serbia over Kosovo's independence and the mixed messages Washington believes Serbia sends over its relations with Moscow, theThe United States continues to support Serbia's efforts to join the EU. At the same time, the United States has sought to strengthen its own relationship with Serbia through deepening cooperation based on mutual interests and respect. Many observers believe the EU's commitment to further integration of the Balkans, despite its declaratory support, has been distracted by the EU migration crisis and the negotiations with the United Kingdom over its departure , despite its stated commitment to expansion in the Western Balkans, has been preoccupied by internal issues such as the migration crisis, recovery from the eurozone crisis, and the exit of the United Kingdom from the union. These observers, in both Washington and in the Balkans, believe the United States should reinvigorate its former strategy of active engagement with the Western Balkans, and in particular its relations with Serbia.

Congressional interest in Serbia (and Kosovo) dates to the 1991-1999 conflicts in the Western Balkans. Over time, Congress has established Member caucuses on both Kosovo and Serbia and has held several hearings on the Western Balkans. In 2018, the Serb Caucus in the House noted the 100^th anniversary of Woodrow Wilson's "day of prayer" for the people of Serbia. In 2018, the Serbian diaspora and Eastern Orthodox Church sent a letter to Congress regarding the discussions surrounding a possible land swap between Serbia and Kosovo. Many Members of Congress support Kosovo's independence, the efforts at reconciliation between Serbia and Kosovo, and EU membership for both countries, but other Members have expressed skepticism about Serbia's relations with Russia or the future viability of the Serbia-Kosovo coexistence.

This report provides an overview of Serbia and U.S. relations with Belgrade.

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Overview¹

For almost a century Serbia was part of varioustwo South Slavic states, including the interwar Kingdom of Serbs, Croats, and Slovenes (renamed the Kingdom of Yugoslavia in 1929) and the Socialist Federal Republic of Yugoslavia from 1945 to 1992.² Belgrade was the capital of Yugoslavia, and Serbs dominated the Yugoslav federation. both Yugoslav states, and Serbia was widely regarded as the dominant force in political, economic, and military affairs. Serbia was at the center of the Balkan conflicts throughoutduring the 1990s,²3 when Croatia, Slovenia, and Macedonia declared their independence from Yugoslavia in 1991, followed by Bosnia and Herzegovina in 1992. Between 1998 and 1999, ethnic KosovarsAlbanians in the southern province of Kosovo fought a war to liberate the provinceseparate from Serbia. The conflict ended short of full independence for the KosovarsKosovo after the intervention of NATO, which included the bombing of SerbSerbian forces in Kosovo and resulted in a Serb withdrawal and a cease-firecease-fire and Serbia's withdrawal from the province. The United Nations Security Council in 1999 adopted a resolution authorizing the establishment of a U.N. mission in Kosovo (UNMIK) to implement thepromote peace, and NATO and other forcesstability and a NATO-led force (KFOR) to provide security in Kosovo. The remnants of Yugoslavia, were reorganized as the State Union of Serbia and Montenegro, emerged in 2003 but dissolved in 2006 when Montenegro voted to leave the State Union in 2003. In 2006, an independence referendum passed in Montenegro and Serbia became the Republic of Serbia. In 2008, Kosovo's leaders formally declared independence, igniting new tensions with Serbia. Although over 110 countries, including the United States, have recognized Kosovo's independence, Serbia, Russia, China, and several European countries have not. Tensions continue to persist between Belgrade and Pristina (Kosovo's capital) even as the two negotiate a resolution of their differences (see below).

Political Developments

Since the end of the regime of nationalist strongman and indicted war criminal Slobodan Milosevic in 2000, Serbia has developed into what has been described as a functioning, if somewhat flawed, democratic political system. According to theThe Economist Intelligence Unit's 2017 Democracy Index, ranked Serbia ranked 66^th out of 167 countries and territories for the strength of its commitment to democracy but was rated as the only "flawed democracy" in the Balkan region.³

Domestic tensions continue to in its 2017 Democracy Index, putting it ahead of other Western Balkan states that have not yet joined the EU.⁴ Domestic tensions persist between those who favor a reorientationan orientation of Serbia toward the West, including membership in the European Union (EU)EU, and nationalist forces led by the ultranationalist Serbian Radical Party (SRS) that, which oppose a Western orientation and express a desire to remain close to Russia. Nationalist/populists forcesMany nationalists have not forgiven the West, particularly the United States, for the perceived bias against the preservation of the Yugoslav federation and for intervening in Serbia's conflict with Bosnia and then with Kosovo and its independencesupporting states that seceded from Yugoslavia in the 1990s, intervening in the Bosnia conflict, conducting airstrikes against Serbia in 1999, and supporting Kosovo's independence in 2008. Successive Serbian governments during this time have had to balance favorable domestic views of relations with Russia with the aspirations for better relations with the EU, the United States, and others, including NATO, although Serbia has indicated it has no interest in joining the alliance.

At the beginning of 2017, the government in Belgrade was led by Prime Minister Aleksandar Vučić of the Serbian Progressive Party (SNS). The Progressive Party was formed by Tomislav Nikolic and others, including Vučić, when they broke away from the Radical Party in 2008 to offer a more moderate/nationalist, pro-EU alternative.

In parliamentary elections held in March 2014, the SNS completed its electoral dominance, following the 2012 election of Nikolic as president, when it won a sizable victory in the 250-seat Serbian parliament, receiving 48.4% of the vote and 158 seatsNATO.⁵

From 2000 to 2012, most of Serbia's presidents and governing parties had roots in the liberal Slobodan Milošević-era opposition. However, since 2012, parties that ruled during the Milošević era but subsequently reformed their platforms have dominated Serbia's political landscape The Socialist Party of Serbia (SPS), led by Milošević throughout the 1990s, was reformed in the 2000s, when party leader Ivica Dačić brought in young moderates and embraced a pro-EU position. The Serbian Progressive Party (SNS) was formed in 2008, when Tomislav Nikolić, Aleksandar Vučić, and others split from the ultranationalist Serbian Radical Party (SRS), which had been aligned to Milošević for much of the 1990s. Like the SPS, the SNS adopted a pro-EU platform.

The SNS and SPS have governed together since 2012. Ivica Dačić (SPS) was prime minister from 2012 to 2014. In March 2014 parliamentary elections, the SNS-led coalition won a sizable victory in the Serbian parliament, receiving 48.4% of the vote and 158 of 250 seats, the strongest performance by any electoral coalition since the transition in 2000. The SNS victory was aided by the former government's increasing unpopularity as a result of corruption scandals and poor economic performance. Under Serbian law, the president appoints the prime minister, and Nikolic appointed Vučić to lead the government. Many in Serbia saw the election result as vindication for Nikolic's and Vučić's decision to leave the Radical PartyThe SNS's Aleksandar Vučić was appointed prime minister. The Socialist Party won 44 seats in the parliament and entered governmentgoverned as the SNS's coalition partner.

Between the 2014 election and spring 2016, the Vučić government was criticized for the stagnant economy, the poor state of the rule of law, its tight control of the media, and its disregard for opposition concerns about democratic progress. This situation led to a growing vocal challenge from the Radical Party. The SRS leader, Vojislav Seselj, who is a member of the Serb parliament, pledged never to give up fighting for Serbia to regain Kosovo and to oppose Serbian membership in the EU. Seselj also argued that Serbia should integrate more with Russia and stop cooperating with NATO.

In April 2016, faced with the prospect that mounting problems, including the erosion of his popularity and an internal governance feud with the Socialist coalition partner, could continue to erode support for the SNS, Prime Minister Vučić called for a snap parliamentary election, well ahead of the regularly scheduled 2018 elections. Although the coalition led by the SNS again won around 48% of the vote, the number of seats won by the SNS in the parliament declined to 131 as new, smaller parties entered parliament for the first time. Nevertheless, Vučić was again appointed to lead the new government.

By the time the 2017 presidential election period began, the popularity of President Nikolic and the SNS had stagnated once again. Despite Vučić's domestic problems, many saw him as the only politician in Serbia who could move the country forward.⁴ This assessment contributed to Vučić's decision to run for president, effectively preventing Nikolic from running for reelection. On April 2, 2017, Vučić won an overwhelming victory, capturing around 55% of the vote despite protests that his campaign abused state resources, and for what many believed was an autocracy-in-the-making by Vučić and his party.⁵ On September 8, 2017, Serbia's Anti-Corruption Agency ruled that Vučić did not abuse state resources during the presidential election campaign.

In early June 2017, President Vučić appointed Ana Brnabic as the new prime minister. At the time, Brnabic was serving as minister of public administration and local government. Brnabic is Serbia's first woman head of government. The appointment of Brnabic, created some tension within the SNS, as Brnabic was not a party member and because her strong views on integration with the EU (reflective of Vučić's views) were not universally shared within the SNS. Brnabic generated controversy during summer 2017, when she reportedly stated that Serbia, if forced to choose between closer ties with Russia and membership in the EU, would choose the EU.⁶ Since then, Brnabic has gained the party's confidence and seems to enjoy the full support of President Vučić and the general population. Most observers, however, believe that Vučić will be the real power in Serbia for the foreseeable future. Although some have compared Vučić to other strongmen in European politics and, as noted above, even accused him of being an autocrat, many believe he has successfully taken over the center ground of Serb politics, building a reputation for technocratic efficiency, ideological flexibility, and political pragmatism while retaining a solid constituency of center-right and right-wing voters.⁷

One issue involving the strength of Serbia's democracy that dogged the former Vučić government and continues in the Vučić/Brnabic government is the handling of the media. The previous Vučić government came under a great deal of pressure from within Serbia and from the EU for its crackdown on the media, particularly opposition media. The new government faced the same problem. In August 2017, the Adria Media Group announced that it had filed a total of 150 lawsuits against Serbian President Vučić, Interior Minister Nebojsa Stefanovic, the Tax Administration, and editors and owners of several Serbian tabloids. These actions were taken in response to what the Adria Group alleged was a smear campaign in progovernment media targeting Adria's flagship tabloid Kurir and the group's owner, Aleksandar Radic. Kurir's continuing negative reporting on the Serbian administration and Vučić after the suits were filed was reportedly met by the Tax Administration's decision to freeze the company's bank accounts over alleged tax debts.⁸ In late September, a similar decision by the Tax Administration apparently caused one of Serbia's popular local weeklies, Vranje's Novine Vranjske, which was also viewed as being not friendly to the government, to decide to shut down after management failed to settle its taxes. In October 2017, some 26 Serbian media associations, nongovernmental organizations (NGOs), journalists, and activists protested what they called the worsening situation of the free media and met in Belgrade to coordinate a new campaign, "For Media Freedom," in defense of media freedom in the country. Prime Minister Brnabic, in a meeting in Brussels in late 2017, criticized the country's media for its alleged lack of balance, suggesting that there were very few objective journalists in Serbia, but did agree to meet with the new group to discuss ways to improve the status of the media.

Another issue Serbia continues to confront is difficult relations with its neighbors and former members of the Yugoslav federation. Relations have been particularly tense over the issue of alleged war crimes committed by Serb military and security officials during the wars that followed the unraveling of Yugoslavia in the 1990s. During this period, it is estimated that some 130,000 people died in a series of conflicts throughout the Balkan region. In 1993, the International Criminal Tribunal for the Former Yugoslavia (ICTY) was established in The Hague to try war crimes suspects. The ICTY (which closed its doors in late 2017) investigated, brought charges, and secured convictions against persons from every ethnic background, including Croats, Bosnian Muslims, and Kosovo Albanians, for crimes committed against ethnic populations. However, the majority of, and the most high-profile, cases chiefly dealt with alleged crimes committed by Serbs and Bosnian Serbs. The arrests and trials continued to generate resentment of the West by many Serbs. One example of Serb attitudes on this issue was highlighted in early October 2017, when Serb Minister of Defense Aleksandar Vulin said in a speech to former army personnel that "Serbia will no longer be ashamed of those who defended [the former Yugoslavia], and that time has come to be 'quietly proud' instead."⁹ Serbian attitudes were reinforced by Russia's solidarity and position that the U.N. war crimes tribunal should have been shut down long ago because it was biased against Serbs.

In addition to the ICTY, Serbs have been confronted by courts in Kosovo that have addressed Serb war crimes. For instance, in January 2016, the Basic Court of Mitrovica in Kosovo, composed of a panel of international judges under the auspices of the EU's rule-of-law (EULEX) mission in the country, found the former head of a Serb paramilitary group guilty of committing war crimes against ethnic Albanian civilians and sentenced him to nine years in prison.

Belgrade has complained that Kosovo Albanians also had been responsible for war crimes but have not been prosecuted as often or as vigorously as have the Serbs. In response, the government of Kosovo in 2015 approved, through a controversial amendment to the constitution, the creation of a Special Court for Kosovo, affiliated with the judicial system of Kosovo but located in The Hague and staffed by international jurists who would hear cases against former members of the Kosovo Liberation Army (KLA).¹⁰ The Serbs, although skeptical, appeared satisfied that at least an impartial court would hear those cases. However, several legislators, and former KLA fighters, in Kosovo have tried to eliminate the law that created the Special Court, a move that has had negative consequences for Serb relations with Pristina. In July 2018, a Belgrade-based NGO, the Humanitarian Law Centre, said Serbia seemed to be stalling on its own prosecution of war criminals, stating that Serbia had made no notable progress in implementing its own war-crimes prosecution strategy.¹¹

In other Balkan countries, Serbs also have been indicted for war crimes. For instance, in Croatia, on October 16, 2018, 29 Serbs went on trial, in absentia, in Zagreb for the alleged murder of some 47 Croats by Serbian paramilitaries in the village of Vocin and other surrounding villages 27 years ago. This trial prompted some in Serbia to remind Croatia that during Croatia's 1995 operation "Storm," Croat military forces allegedly killed hundreds of Serbs and displaced thousands.

In other aspects of Serbia's relations with its neighbors, Serbia and Bosnia-Herzegovina have been involved in a long-standing dispute over a border demarcation separating the two countries. Serbia has asked for adjustments at four different points along the Drina River that would shift a segment of a railway, two dams, and a hydroelectric plant into Serbian territory. A Bosnian commission has begun to investigate Serbia's claims but likely would seek some kind of compensation for any agreement to move the border. Also regarding Bosnia, the Vučić government has insisted that it has no intention of incorporating the territory of the Republica Serbska (RS) into Serbia proper, should the RS leadership successfully follow through on its threat to hold an independence referendum in 2018 or later.

Migration

Serbia is located along the historical transit route between the Middle East and Western Europe, the so-called Balkans Route that continues to illicitly move weapons, narcotics, and people. During the early stages of Europe's recent migration and refugee crisis, Serbia became a major transit route for those fleeing the Middle East (and Afghanistan) via Greece and Turkey for Germany and Northern Europe. It was estimated that some 160,000 migrants and refugees may have transited Serbia between 2014 and late 2015. Although the Balkans Route for migrants and refugees has been effectively shut down since March 2016, as Hungary, Croatia, and Bulgaria closed their borders, migrants and refugees became stranded in Serbia. The U.N. Refugee Agency estimated that in 2017 some 3,000-4,000 migrants and refugees remain in Serbia. The government of Serbia, however, has not processed many applications for asylum and has rejected most of the cases heard thus far.¹² In mid-2018, migrant flows across the Balkans seem to show an increase in numbers.

The migration and refugee crisis exposed numerous vulnerabilities in Serbia's border security, which largely matched vulnerabilities in neighboring countries. In response to the migrant crisis, Serbia has been updating its screening tools and border security with neighboring countries to improve border security and information sharing. In 2016, Serbia established a Migrant Smuggling Task Force, a prosecution-led multiagency team within the Ministry of the Interior that integrates representatives from various departments. The U.S. Department of State's Export Control and Related Border Security (EXBS) program has conducted training courses for Serbia and has donated equipment to Serbian Customs and Border Police.¹³ Recently, Serbian officials asked Frontex, the European Border and Coast Guard Agency, for additional assistance to conduct checks on migrants at the Serb border, in cooperation with the Serbian Interior Ministry.

Economic Conditions

According to the Economist Intelligence Unit, in the period following the 2008 global financial crisis, Serbia had been one of the region's weakest-performing economies, owing to institutional and regulatory deficiencies, poor infrastructure, ; Dačić was appointed Minister of Foreign Affairs.

The Vučić government was criticized for economic stagnation, weaknesses in the rule of law, tightening control over the media, and democratic backsliding more broadly. In April 2016, amid concerns that these challenges could continue to erode support for the SNS, Prime Minister Vučić called early parliamentary elections, well ahead of the regularly scheduled 2018 elections. He claimed that early elections—and an SNS victory—would secure a stable basis for enacting reforms necessary for EU membership.⁶

Although the SNS-led coalition once again won the largest number of votes in 2016, its share of seats in parliament declined from 148 to 131. Aleksandar Vučić was appointed prime minister for the second time. However, the SNS's slightly eroded popularity created an opening for the SRS, which came in third after the SPS and received 22 seats, making it the largest opposition party in parliament.⁷ The SRS is led by Vojislav Šešelj, who was tried for war crimes in International Criminal Tribunal for the former Yugoslavia (ICTY) and subscribes to an anti-West and Greater Serbia agenda. The far-right Dveri party earned 13 seats. The liberal opposition was split into several groupings, the most successful of which was the "Enough is Enough" party, which garnered nearly 7% of votes and received 16 seats.

By the time the 2017 presidential election period began, the popularity of President Tomislav Nikolić (SNS) and the Vučić government was stagnating once again. Despite Vučić's domestic problems, many saw him as the only politician in Serbia who could move the country forward.⁸ This assessment contributed to Vučić's decision to run for president, effectively preventing Nikolic, his fellow SNS member, from running for reelection. On April 2, 2017, Vučić won an overwhelming victory, capturing 55% of the vote in the first round amid allegations that his campaign abused state resources.⁹ However, thousands of demonstrators gathered in Belgrade and other cities to protest against what they viewed as Serbia's descent into autocracy.

In June 2017, President Vučić appointed Ana Brnabić as prime minister. At the time, Brnabić was serving as minister of public administration and local government. Brnabić is Serbia's first female head of government. Her appointment reportedly caused tension within the SNS, as she was not a party member and her strongly pro-EU views were not universally shared within the SNS. Brnabić generated controversy shortly after her appointment when she reportedly stated that Serbia, if forced to choose between Russia and membership in the EU, would opt for the EU.¹⁰ Since her appointment, Brnabić reportedly has gained the party's confidence and seems to enjoy the support of President Vučić. However, many observers believe Vučić will be the real power in Serbia, despite the fact that the presidency has relatively limited formal powers.¹¹

Serbian civil society and the EU criticized Vučić when he was prime minister for Serbia's increasingly hostile media environment. An analysis by a prominent Serbian NGO found that media coverage of the 2017 presidential election was disproportionately focused on Vučić and overwhelmingly positive.¹² In August 2017, the Adria Media Group complained that increasingly critical reporting in its publications had resulted in harassment from the Tax Administration and a smear campaign in pro-government media.¹³ An independent news magazine from southern Serbia, Vranjske, also reportedly came under pressure due to its critical coverage.¹⁴ The democracy watchdog organization Freedom House reports that smear campaigns, high competition for limited advertisement revenue, and intimidation tactics have increased self-censorship among journalists and editors.¹⁵ In September 2017, roughly 150 Serbian media publications and civil society organizations launched a blackout campaign on their websites to protest against the media climate in Serbia.¹⁶

Although some have compared Vučić to other strongmen in European politics and, as noted above, accused him of being an autocrat, many believe he has successfully taken over the center ground of Serbian politics. He has built a reputation for technocratic efficiency, ideological flexibility, and political pragmatism while retaining a base of center-right and right-wing electoral support.¹⁷ EU officials and many member state leaders have praised him as a reliable partner in the region.¹⁸ Twelve of the 35 negotiating chapters required for EU membership were opened between 2015 and 2017, when Vučić helmed the government or presidency. Others believe Vučić's nationalist credentials and authority make him uniquely prepared to bring the country to terms with a compromise agreement with Kosovo and limit nationalist backlash.

Serbia's relations with its neighbors have been particularly tense due to allegations of war crimes committed by Serbs during the dissolution of Yugoslavia in the 1990s. During this period, it is estimated that some 130,000 people died in a series of conflicts in Croatia, Bosnia, Serbia, and Kosovo. In 1993, the International Criminal Tribunal for the Former Yugoslavia (ICTY) was established in The Hague. The ICTY, which closed its doors in late 2017, investigated and prosecuted cases against persons from numerous ethnic backgrounds, including Croats, Bosnian Muslims, and Kosovo Albanians, for alleged war crimes against other ethnic groups. However, the majority of cases were brought against Serbs. The arrests and trials fueled resentment of the West by many Serbians. One example of Serbian attitudes on this issue was highlighted in early October 2017, when Serbian Minister of Defense Aleksandar Vulin said in a speech to former army personnel that "Serbia will no longer be ashamed of those who defended [the former Yugoslavia], and that time has come to be 'quietly proud' instead."¹⁹ Serbian attitudes were reinforced by Russia's solidarity and position that the U.N. war crimes tribunal should have been shut down long ago because it was biased against Serbs.

Serbs also have been confronted by courts in Kosovo. In January 2016, Kosovo's Basic Court of Mitrovica, which is composed of a panel of international judges under the auspices of the EU's rule-of-law mission in the country, found the former head of a Serb paramilitary group guilty of committing war crimes against ethnic Albanian civilians and sentenced him to nine years in prison.

Belgrade has complained that war crimes cases against Kosovo Albanians have not been prosecuted as often or as vigorously as cases against ethnic Serbs. In response, Kosovo's government introduced a controversial court to prosecute cases against former members of the Kosovo Liberation Army (KLA) identified in the EU Special Investigative Task Force report.²⁰ The specialist chambers is affiliated with the judicial system of Kosovo but located in The Hague and staffed by international jurists. However, several legislators and former KLA fighters in Kosovo have tried to eliminate the law that created the special court, a move that had negative consequences for Serbia's relations with Pristina. At the same time, the Belgrade-based Humanitarian Law Centre recently accused Serbia of stalling on its prosecution of war criminals, stating that Serbia has made little progress in implementing its own war-crimes prosecution strategy.²¹

The legacy of the wars of Yugoslav dissolution has strained Serbia's relationship with Croatia, particularly around the anniversaries of major wartime events and over the issue of war crimes. Croatian courts have tried Serbs for war crimes. Most recently, in October 2018, a trial began in abstentia for nearly 30 Serbs accused of murdering 47 Croats in the Croatian region of Slavonia in 1991, when Serbian paramilitaries and breakaway forces controlled much of the territory.²² On two separate occasions in 2016, Croatia blocked ongoing EU accession talks with Serbia, citing objections due to historical grievances. In both cases, Croatia lifted its objections under pressure from EU leaders. Both Croatia and Serbia expressed disappointment with the International Court of Justice's rejection in February 2015 of long-standing claims of genocide by Croatia and Serbia against one another. Finally, the two countries have not yet resolved their dispute over territory along a stretch of the Danube River.

Serbia's relationship with Bosnia also has been strained at times. The two countries dispute border demarcation at four locations along the Drina River; Serbia's preferred demarcation would shift local infrastructure and a hydroelectric power plant onto Serbian territory. A Bosnian commission has begun to investigate Serbia's claims. In addition, Serbia's relationship with the Bosnian entity of Republika Srpska also led to tensions between Belgrade and Sarajevo. Former Republika Srpska president (and current member of Bosnia's collective presidency) Milorad Dodik made frequent threats to hold an independence referendum and seek union with Serbia. However, the Vučić government repeatedly has stated that it respects Bosnia's territorial integrity and has no intention of incorporating the territory of the Republica Srpska into Serbia proper.

Migration

Serbia is located along a historical trade route between the Middle East and Western Europe. The so-called Balkan Route continues to be a corridor for trafficking weapons, narcotics, and people. During the early stages of Europe's recent migration and refugee crisis, Serbia became part of a land route for refugees and migrants from the Middle East and Africa bound for the European Union. Analysts estimate that roughly 1 million migrants and refugees may have passed through Serbia in 2015 and 2016.²³ Although the Balkan Route has been effectively shut down since March 2016, thousands of migrants and refugees became stranded in Serbia. The U.N. Refugee Agency estimated that in 2017 some 3,000-4,000 migrants and refugees remain in Serbia. The government of Serbia, however, has not processed many applications for asylum and has rejected most of the cases heard thus far.²⁴ In mid-2018, some reports suggested that migrant flows across the Balkans were increasing again, albeit not to the levels seen in 2015 and 2016.

The migration and refugee crisis revealed deficiencies in Serbia's border security regime. Since then, Serbia has taken steps to strengthen screening and security measures along its borders and improve information-sharing practices with its neighbors.²⁵ In 2016, Serbia established a Migrant Smuggling Task Force that drew together representatives from relevant government departments. The U.S. Department of State's Export Control and Related Border Security program donated equipment and provided training for Serbia's Customs and Border Police.²⁶

Economic Conditions

According to the Economist Intelligence Unit, in the period following the 2008 global financial crisis, Serbia was "one of the region's worst-performing economies, owing to institutional and regulatory deficiencies, poor infrastructure, an oversized state, insufficient openness of the economy, low levels of innovation, and demographic weaknesses."²⁷ Between 2013 and 2017, average real GDP growth was just 1.2%, one of the region's lowest rates.²⁸

Nevertheless, for the first half of 2018, real GDP growth was reported to be 4.9% year on year, a significant increase from the 1.4% during the same period in 2017.²⁹ Serbia's recent growth is attributed in part to increased consumption and investment.³⁰ Furthermore, Serbia's unemployment level has decreased slightly to 12.5%, although it varies by region and is higher in southern and southeastern Serbia. However, Serbia's high youth unemployment rate, estimated to be 33% in 2017, remains a policy challenge.³¹ Serbia was ranked 48^th in the World Bank's Doing Business 2019 report, an improvement from previous years and a stronger rating than most of the country's neighbors, including those already in the EU.³²

Serbia's main exports include machinery, manufactured goods, agricultural products, and chemicals. Belgrade has bilateral trade agreements with countries such as Russia, Belarus, Kazakhstan, and Turkey, as well as with the EU and the European Free Trade Association. Serbia also is a signatory to the Central European Free Trade Agreement. The United States and Japan designate Serbia as a Generalized System of Preferences beneficiary.

Under President Recep Tayyip Erdogan, Turkey has funded loans and investment projects in the Western Balkans. During a high-profile visit to Serbia in 2017, Erdogan signed numerous agreements to expand economic ties between the countries.³³ Turkish businesspeople traveling with Erdogan reportedly wereinsufficient openness of the economy, low levels of innovation, and demographic weaknesses.¹⁴

Nevertheless, the Statistical Office of the Republic of Serbia recently has reported that real GDP growth picked up to 4.4% year on year in the second quarter of 2018, from an overall 1.9% growth in 2017. This was the fastest rate of growth for Serbia in a decade. The Economist Intelligence Unit estimates that overall growth will be around 4.4% in 2018. The estimated unemployment rate for Serbia is relatively high; for 2018, it is forecast to be around 14% with an inflation rate at about 2.1%. Serbia's main exports include machinery, manufactured goods, food, and chemical products. The EU is Serbia's largest trading partner, with a 2017 volume of trade at approximately €2.3 billion. Serbia's main trading partners include Italy, Germany, China, Bosnia, and Russia.¹⁵

In recent years, according to the Economist Intelligence Unit, despite Serbia's slow level of development, its size, and its distance from main markets, its fast export growth has caught up with Serbia's overall economic potential. This is unlike the situation in other western Balkan countries that appear to under-trade. The robust growth in exports has been the result of a recent strong growth in foreign direct investment, along with Serbia's flexible exchange rate.

One example cited by Vučić (and used as evidence that his policies for economic recovery are reaping success) was the announcement in August 2017 that Swedish-founded furniture retailer IKEA would open a large store in Belgrade that would employ thousands of Serb workers. Another indication of Serbia's potential as a good place for foreign investment was the October 2017 visit of Turkish President Recep Tayyip Erdogan. During Erdogan's three-day visit to Serbia, the two leaders signed 12 bilateral agreements, including a revision of the free trade agreement between Serbia and Turkey. With some 20 Turkish businesses already registered in Serbia, Erdogan reportedly was accompanied by over 100 Turkish businesspeople interested in economic projects involving an extension of the TurkStream gas pipeline to Serbia, as well as Serbia's textile and tourist industries and infrastructure construction, including several highway projects.¹⁶ In addition to his meetings with Vučić, Erdogan also attended a Turkey-Serbia Business Forum and visited Novi Pazar, a mainly Bosniak (Muslim) city.34 Turkey's exports to the Western Balkans surged in 2018 thanks in part to the weakening of the Turkish lira.³⁵

China is also investing in Serbia as a corridor to Europe for China'sas part of its "one belt, one road" global investment strategy. In 2016, China's He Steel Company purchased the Smederevo steel mill, and in August 2018, Belgrade announced that China's Zijin Mining Group would become the major investorstrategy. China reportedly has invested more than $6 billion in Serbia thus far. At a June 2018 meeting with Balkan leaders, Beijing pledged nearly $9.5 billion for the Western Balkans, including Serbia.³⁶ These investments have targeted transportation and infrastructure projects, as well as aging industrial complexes. For example, Chinese investments and loans are being used to improve rail and highway links between Serbia and neighbors such as Montenegro and Hungary. China's He Steel Group purchased Serbia's Smederevo steel mill in 2016, and the Zijin Mining Group recently won the tender to invest in RTB Bor, Serbia's main copper mining company.³⁷ in RTB Bor, Serbia's main copper mining company. In September 2018, Serbia's finance minister visited Beijing and signed severalnumerous agreements, including onesseveral for Chinese companies to invest in a Belgrade-based bus manufacturer, to help construct an industrial park, and to build a bypass highway around Belgrade.

In an apparent attempt to further promote Serbia's economic growth and its potential role as an economic leader in the Balkans, Vučić—at the fourth Western Balkans summit held in July 2017 in Trieste, Italy—called on his neighbors to establish a Balkan customs union. The union would include the elimination of internal tariffs and duties by member countries, the removal of all restrictions on the movement of goods, and the adoption of common customs tariffs. Around half of all intraregional goods exported in the Western Balkans originate from Serbia.¹⁷

The EU and the European Bank for Reconstruction and Development (EBRD), which has invested €10 billion ($11 billion) in the region, have endorsed the idea of creating a single market of 20 million people focused on improving the general business climate and facilitating private investment initiatives, including to helping improve the environment for small- and medium-sized enterprises (SMEs).¹⁸

One issue that continues to stunt Serbia's economic growth, according to the EBRD, is that SMEs, which form the backbone of the Serbian private sector, face limited access to financing. The EBRD has established a program to assist SMEs in financing projects conducive to sustainable growth.¹⁹

In 2015, the International Monetary Fund (IMF) and Serbia agreed to a three-year, $1.2 billion standby loan agreement. The initial IMF loan required slashing the size of Serbia's public sector and fighting corruption. The Vučić government has hesitated to take some unpopular steps, such as selling off or shutting downAlthough Chinese and Turkish investments in Serbia have expanded in recent years, the EU is still Serbia's most important economic partner by a wide margin in terms of trade and foreign direct investment. In 2017, trade with the EU comprised nearly three-quarters of Serbia's total trade, whereas trade with China was just 5%.³⁸ The total value of Serbia's exports to EU countries increased more than threefold between 2009 and 2017, from 3.2 billion euros to 9.9 billion euros.³⁹ Similarly, for the period 2010-2017, more than 70% of foreign direct investment in Serbia, amounting to 11 billion euros, came from EU member states.⁴⁰ Finally, Serbia has received support from international financial institutions. In 2015, the International Monetary Fund (IMF) and Serbia reached agreement on a $1.2 billion standby loan. The loan's terms required slashing the size of Serbia's public sector and fighting corruption. The Serbian government hesitated to take some unpopular measures, such as selling off or closing heavily subsidized state-owned utility and mining companies, which it claims would increase unemployment, drawing criticism from the IMF. However, an IMF mission that visited Serbia between February 27 and March 6, 2017, issued a more. However, the IMF issued a generally positive assessment of the program's progress, stating that Serbia's economy had "strengthened dramatically" since 2015. In February 2018,Serbia's progress in complying with the loan's terms, and in February 2018 Serbia successfully completed the three-year IMF program. However, the IMF has emphasized that Serbia needs to continue to strengthen its institutions to support private sector-led growth and to modernize its tax administration and public services.²⁰

Relations with Kosovo

One of Serbia's most difficult domestic political and foreign policy challenges in recent years has been its relations with Kosovo. pursue structural and institutional reforms to support long-term growth.⁴¹ To this end, a Policy Coordination Instrument was approved in July 2018. The instrument aims to facilitate fiscal consolidation and improved public finances. Relations with Kosovo

One of Serbia's most difficult domestic political and foreign policy challenges in recent years has been its relations with Kosovo. Serbians regard Kosovo as the cradle of their nation and their Orthodox Christian faith. Many key Serbian Orthodox religious sites, including medieval churches and monasteries, are located in Kosovo.

Belgrade strongly opposed Kosovo's declaration of independence in February 2008 and has refused to recognize Kosovo's independence. Enshrined in theThe preamble of the SerbSerbia's constitution isincludes wording that Kosovo is Serbian. part of Serbia. To emphasize its position that Kosovo is part of Serbian territory, Belgrade is paying nearly $1 billion to the Paris Club, the London Club, and the European Bank for Reconstruction and Development for Kosovo foreign debt incurred before Yugoslavia's collapse.⁴² Serbia won an important initial diplomatic victory when the U.N. General Assembly voted in October 2008 to refer the question of the legality of Kosovo's declaration of independence to the International Court of Justice (ICJ). However, Serbia's diplomatic strategy suffered a setback when the ICJcourt ruled in July 2010 that Kosovo's declaration of independence did not contravene international law.

Serbs regard Kosovo historically and culturally as the cradle of their nation and their Orthodox Christian faith. Many of the most important Serbian Orthodox religious sites are located in Kosovo. Recently, several prominent Serbian Orthodox bishops called on their followers to pray for Kosovo, saying that Kosovo cannot be taken from Serbia. In addition, Serbia continues to pay off close to €900 million ($1 billion) in Kosovo foreign debt incurred between 1970 and 1990 to the Paris Club, the London Club, and the EBRD, because Serbia considers the former province a part of its own territory.²¹

Reports indicate that Serbia is trying to convince some countries to reverse their recognition of Kosovo's independence, and Belgrade has blockedSince 2008, Belgrade has drawn on Russian support to block Kosovo's attempts to gain membership in organizations such as the U.N., Interpol, and UNESCO. At the same time, Serbia continues to support the semiautonomy of the approximately 120,000 Serbs living in areasde facto autonomy of the four Serb-majority municipalities in northern Kosovo, including part of the divided town of Mitrovica, the largest town in northern Kosovo, as well as the protection of other Serb minority enclaves throughout Kosovo.

Despite its nonrecognition of Kosovo, Belgrade entered into EU-brokered talks with Pristina in 2011. These early negotiations resulted in technical agreements on mobilitytalks with Pristina in 2011 facilitated by the EU, which conditioned Serbia's progress toward EU membership on holding such talks. Initial discussions led to technical agreements on free movement of persons, customs stamps, mutual recognition of university diplomas, real estate records, civil registries (which record births, deaths, marriages, etc., for legal purposes), integrated border/boundary management, and regional cooperation. Implementation of many of these accords, however, has lagged. The two sides also agreed to exchange liaison personnel (to be located in EU offices in Belgrade and Pristina) to monitor the implementation of these agreements and address any problems that may arise.

The implementation record of these early technical agreements is mixed; some were carried out fully, and others were not.⁴³

On April 19, 2013, the leaders of Kosovo and Serbia concluded a landmark "First Agreement of Principles Governing the Normalization of Relations." The agreement affirmed the primacy of Kosovo's legal and institutional framework throughout Kosovo's territory. More importantly, the 15-point agreement called for the creation of an "Association/Community of Serbian-majority municipalities" in Kosovo. This "Association/Community" would have "full overview" of the areas of economic development, education, health, urban and rural planning, and any others that Kosovo's central government in Pristina grants. The police in northern Kosovo would form part of Kosovo's unified police force and would be paid only by Pristina. The police commander in the north was to be a Kosovo Serb selected by Pristina from a list of nominees provided by the mayors of the four Serb municipalities in the North. The ethnic composition of the local police in the North was to reflect the overall ethnic composition there.

The situation in the judicial system was to be resolved in a similar manner. The judicial system in northern and southern Kosovo operates under Kosovo's legal framework, but an Appellate Court in Pristina is composed of a majority of Kosovo Serb judges to deal with all Kosovo Serb-majority municipalities. A division of the Appellate Court is based in northern Mitrovica.

In August 2015, the two sides reached key deals on energy, telecommunications, and finally, the establishment of the Serbian-majority municipalities. However, the implementation of these agreements has lagged due to complicated political problems on both sides. For instance, the energy agreement stipulates that Kosovo must allow Serbia's public energy company to establish a supply company within Kosovo. However, as part of the licensing requirement, Kosovo insists that the Serb company make it clear that it would be operating in Kosovo. The Serbian side has rejected this demand, claiming such a statement would suggest an indirect recognition by Serbia of Kosovo's independence.²²

With respect to the Serb "Association/Community" agreement, both sides have continued to disagree over the powers the municipalities would have. In addition, opposition parties in Kosovo's parliament have fiercely contested the agreement, claiming it is a capitulation to Serbian interests, also known as the Brussels Agreement. The EU-brokered agreement, which established a basis for normalizing relations, addressed politically sensitive issues concerning Kosovo's judiciary, policing, and the rights of ethnic Serb minorities. Two proposed concessions were particularly notable: Serbia would concede policing in northern Kosovo to Kosovo's police force, effectively dismantling some of the parallel structures in the region, and Kosovo would agree to the creation of an Association of Serbian Municipalities with powers in economic development, education, health, urban and rural planning, and potentially other areas. However, there has been relatively little progress on the steps outlined in the agreement, and both sides claim that the other party is at fault for the delay.⁴⁴

In August 2015, the EU brokered four technical deals on energy, telecommunications, and the proposed Association of Serbian Municipalities. However, as was the case with previous agreements, the implementation of provisions has lagged due to political problems on both sides. For instance, the energy agreement paved the way for a Serbian energy company to develop a supply company in Kosovo. However, the agreement stalled when Kosovo insisted that the company's statute acknowledge that it operates in Kosovo—a requirement that Belgrade claimed was tantamount to indirect recognition of Kosovo's independence.⁴⁵

Furthermore, Belgrade and Pristina continue to disagree over the Association of Serbian Municipalities proposed in the Brussels Agreement. Indeed, the two sides have at times espoused significantly different visions of what the association would entail.⁴⁶ Kosovo's political opposition, of which the nationalist Vetëvendosje party is the largest, is opposed to the association. Tensions between Serbia and Kosovo rose during summer 2018, as the August 4 deadline for drafting a statute for the Association of Serb Municipalities came and went without success. This prompted Serb President Vučić to claim in an open letter to Kosovo Serbs that Pristina would not likely establish the promised Association of Serb Majority Municipalities in Kosovo.

passed without success.

The on-again, off-again dialogue between Belgrade and Pristina has servedhelped to ease some of the lingering tensions that exist between Serbia and Kosovo over any number of other issues. However, the talks are often negotiations often are complicated by unanticipated events, such as the following:

• In January 2018, unknown assailants murdered Kosovo Serb politician and activist for a Serbia-Kosovo reconciliation Oliver Ivanovic. Both sides pledged to cooperate to identify and prosecute those involved. However, the investigation has not produced information, which has resulted in accusations that both sides were dragging their feet on the investigation.
• On July 10, that lead to flare-ups in nationalist rhetoric, as the following recent examples demonstrate:
• Scheduled talks between Serbian and Kosovo officials were halted in January 2018, when unknown assailants murdered controversial Kosovo Serb politician Oliver Ivanović outside of his office in the divided city of Mitrovica. His supporters viewed him as a moderate pragmatist willing to compromise with Kosovo leaders, but hard-liners on both sides viewed him as a political foe.⁴⁷
• In March 2018, Kosovo police arrested Marko Đurić, the Serbian government official who heads the Office for Kosovo, for illegal entry. Serbian media criticized Kosovo police for using excessive force in the arrest, which reportedly included the use of tear gas and stun grenades to dispel Kosovo Serbs who tried to prevent the police from detaining Đurić. Pristina countered that Đurić had been banned from Kosovo's territory due to his "inflammatory remarks" and was warned in advance that he would be arrested if he attempted to enter Kosovo. The presidents of Serbia and Kosovo called for calm, although President Vučić condemned the act as a "brutal provocation" and stated that Serbia would not let the incident "go unpunished. "⁴⁸
In July 2018, Kosovo police arrested five ethnic 2018, Kosovo police arrested five Serbs, alleging they were "involved in activities against the constitutional order and security of the Republic of Kosovo."⁴⁹ Belgrade reacted by threatening to halt all talks withwith Pristina until the men were released.
• In September 2018, Vučić traveled intoPresident Vučić visited northern Kosovo—including to Gazivode Lake, which both sides see as strategically important—for two days of discussions with Serbs living in Kosovo. Although the Pristina governmentKosovo Serbs. Although Pristina approved the visit, some Kosovo citizens tried to block Vučić's intended travel route. The Serbian president was criticized for giving a speech in Kosovo in which he praised Slobodan Milošević as a "great Serbian leader." Partly as a result of the fallout from these events, talks scheduled to be held that month between Vučić and Thaçi instead were held separately with EU High Representative Federica Mogherini.
• In October 2018, as Serbia and Kosovo's presidents floated the idea of adjusting borders to normalize relations (see "Border Adjustments," below), Kosovo's parliament passed a law to transform the Kosovo Security Force into a national army over the objections of Kosovo Serb members of parliament. In the past, NATO indicated it would not support a Kosovo army if Kosovo Serbs were not part of the dialogue in its creation. Belgrade sharply opposed this measure.
• In November 2018, on the eve of scheduled talks between presidents Vučić and Thaçi, Kosovo imposed a 10% customs tariff on imports from Serbia in response to Serbia's alleged efforts to block further recognition of Kosovo. Although the two leaders still met, Vučić stated that talks with Kosovo would continue only when the "illegal" tariffs were removed.⁵⁰

Since the launch of the dialogue in 2011, the tone taken by officials in both countries has ranged from cooperative to combative at times. Some analysts note that Serbian and Kosovo officials tend to take a more conciliatory, cooperative tone before external—primarily American and EU—audiences. However, the same officials may adopt zero-sum rhetoric and hard-line positions before domestic audiences, particularly during election campaigns, when they appeal to nationalist voters.⁵¹ However, some observers believe these setbacks—whether intentional or not—jeopardize a fragile peace. Furthermore, they may undermine each side's trust in the other as a reliable negotiating party, complicating future negotiations.⁵² Finally, the difficulty in reaching and implementing agreements to normalize relations also reflects the considerable political cost that leaders in both countries likely would pay for making concessions or compromising.⁵³

Border Adjustments

In summer and early fall 2018, leaders from Serbia and Kosovo made statements alluding to border adjustment as an approach to normalizing relations. The idea of partition or border adjustment had been floated occasionally by officials in the past, but usually it was quickly rejected by the West or by domestic political factions. Although the particular details of the "adjustment" have not been hammered out, some observers believe one possible scenario would be Kosovo ceding four majority-Serb municipalities in the north in exchange for diplomatic recognition and/or territory in Serbia's Albanian-majority Preševo Valley. Both sides have rejected this idea in the past, as have many Western states, which opposed the principle of redrawing borders on an ethnic basis in the Balkans.

As in the past, both leaders faced immediate opposition from powerful factions following these statements. Nationalist parties in Kosovo and Serbia expressed opposition to any border adjustment, as did a number of NGOs.⁵⁴ Vučić faces further opposition from the Serbian Orthodox Church, and Kosovo's leader faces firm opposition from the prime minister and parliament. Although some E.U. officials, as well as officials from the United States, Austria, and other key countries, have indicated they are willing to listen to a proposal based on border adjustment, Germany has remained firmly opposed. It remains to be seen whether Serbia and Kosovo's leaders can reach agreement on a concrete border adjustment proposal and, if so, whether that proposal would be subjected to a referendum or parliamentary ratification in each country.

Relations with the EU

Since 2000, membership in the EU has been one of Serbia's key foreign policy goals. Although the EU welcomes Serbia's desire to join the union, it has emphasized that Serbia's membership is contingent upon its normalization of relations with Kosovo. Most EU member states have recognized Kosovo as an independent country, but five EU countries have not for various reasons.⁵⁵

In 2012, the EU officially recognized Serbia as a candidate for EU membership, and in September 2013 a Stabilization and Association Agreement between the EU and Serbia entered into force. In January 2014, Serbia was formally invited to begin EU membership negotiations. However, Serbian public support for EU membership, while mostly positive, has waned slightly in recent years amid signs of enlargement fatigue within the EU, as well as the EU's insistence that Serbia normalize relations with Kosovo before joining.

As part of the negotiations process, Serbia must harmonize its legislation with the EU's body of laws, the acquis communautaire. As of November 2018, Serbia has opened 14 chapters of the acquis and provisionally closed two chapters. In October 2017, Serbian Prime Minister Ana Brnabić made her first official visit to Brussels with a message of reassurance that Serbia was committed to joining the EU. After previously sending mixed messages on the prospects of European enlargement into the Western Balkans, in 2018 European Commission President Jean-Claude Juncker stated that Montenegro and Serbia could become members as early as 2025. Some analysts, however, believe ongoing disagreements over Kosovo's status could slow Belgrade's timetable.

EU financial assistance to Serbia is primarily provided through the Instrument for Pre-Accession Assistance (IPA). According to the European Commission, the IPA funding allocation for Serbia for the period 2014-2020 will amount to approximately €1.5 billion. This figure excludes loans from the European Investment Bank and bilateral aid from EU member states. At present, there are roughly 600 EU-funded projects in partnership with the Serbian government, businesses, and civil society organizations.⁵⁶ Since 2009, Serbian citizens have been able to travel without a visa to Schengen countries.⁵⁷

Although Serbia has insisted that it be free to balance its relations between the EU and Russia, some EU officials have criticized Serbia for not joining EU sanctions against Russia in response to Russia's actions in Ukraine. However, the EU has not made implementing the sanctions a condition for progress toward Serbia's membership at this stage. Nevertheless, some believe EU attitudes toward Serbia reinforce the view of many in Belgrade that Serbia has not been fully embraced by Brussels and that it would be premature for Serbia to greatly distance itself from Moscow until it receives a stronger commitment from Brussels.

The 2015 European migration crisis, in which hundreds of thousands of migrants and refugees entered the EU via the Balkan route, was a reminder of the region's strategic importance. The EU is also worried about potential political instability and the influence of third powers, such as Russia, China, and Turkey, in the Western Balkans. Proponents of EU enlargement see it as the main tool to assure peace, stability, prosperity, and the rule of law in the region. Some observers speculate that the EU also feels the need for a new mission and purpose, such as integrating the Western Balkans, in the post-Brexit era.⁵⁸

Relations with Russia

Russia has long considered the Balkan region, and Serbia in particular, to be in its sphere of influence due their Slavic language and Orthodox Christian religious connections, as well as what Russia touts as its historical role as "protector" of Christian Slavs in the Ottoman Empire.⁵⁹ However, relations between the former Yugoslavia and Soviet Union were often rocky after Yugoslav leader Josip Broz Tito broke with Stalin in 1948. Russia's relationship with Serbia strengthened in the 1990s, when Moscow advocated at times on behalf of Slobodan Milošević during the wars of Yugoslav dissolution. The relationship has improved since Kosovo's 2008 declaration of independence. Russia supports Serbia's nonrecognition stance and uses its permanent seat on the U.N. Security Council to block Kosovo's admission.

Russia's current influence in Serbia is partly rooted in its popular support. For instance, public opinion polls suggest that most Serbians identify Russia as Serbia's closest friend and Vladimir Putin as their favorite foreign leader (Germany's Angela Merkel placed second).⁶⁰ A study conducted by Belgrade's Center for Euro-Atlantic Studies in 2016 tallied more than 110 registered NGOs, associations, and media outlets in Serbia with Russian connections, a sharp increase from about 12 in 2015.⁶¹ Russia also channels its influence through its media and energy linkages with Serbia. Kremlin-linked media outlets such as Sputnik and RT operate in the Balkans and amplify anti-Western narratives.

Political and economic ties between Moscow and Belgrade strengthened after the breakup of Yugoslavia, particularly during the 1999 NATO campaign against Serbia's actions in Kosovo, which Moscow opposed. Russia supplies Serbia with all of its natural gas, which in 2016 amounted to around 2 billion cubic meters (bcm). In December 2017, a new gas agreement between the two countries pledged an increase in Russian gas deliveries to Serbia to 5 bcm through 2021. Russia also has invested heavily in Serbia's oil and natural gas industry, and Russia's Gazprom has majority shares in Serbia's NIS energy enterprise.

The extent of Russian influence over Serbia's political structures is difficult to assess. Moscow reportedly provides financial and political support to several Serbian political parties. In 2016, the Democratic Party of Serbia, the Dveri Movement, and the Serbian People's Party signed a declaration with Russia's ruling United Russia party expressing support for a neutral military area in the Balkans.⁶²

Some observers believe Russia uses its position in Serbia as a base to carry out operations in the Balkan region. According to a report published in 2017 approved the visit, some Kosovo citizens tried to block various routes Vučić intended to travel, including to the village of Banje, which has a large Serb population. Although many saw Vučić's public address to the people of Mitrovica as conciliatory, Vučić did invoke memories of former Yugoslav leader Slobodan Milosevic, to the dismay of many in Kosovo.

Although Kosovo's government is not under any illusion that Vučić would recognize Kosovo's independence any time soon, it nevertheless has hoped that Vučić might be willing to make concessions on Kosovo to ease tensions with Pristina and smooth Serbia's relations with the EU. One idea raised by observers was that Belgrade would find a way to "normalize" relations with Pristina without explicitly recognizing Kosovo, which could enable Kosovo to join, for instance, UNESCO or Europol.

Many observers attribute Belgrade's reluctance to recognize Kosovo as a step too far for those who were in power at the time of the dissolution of the former Yugoslavia or who fought in the numerous wars to save the federation, particularly in Kosovo. However, interesting attitudes have surfaced among the younger generations of Serbs who were not directly a part of the conflict years. Reportedly, two recent surveys of Serbs under the age of 25 (one conducted in 2016 by the European Movement in Serbia and one conducted in 2018 by the Institute of European Affairs) seem to indicate that views range from staunch opposition to recognition of Kosovo's independence to interest in an agreement—provided Serbia gains full control over Serb-majority parts of northern Kosovo. In addition, a large percentage of those surveyed indicated they would not support full EU integration if it entailed recognition of Kosovo's independence.²³ If these attitudes are widespread and persistent among the younger generations of Serbs, the political implications for a final resolution of the Kosovo question could become problematic for any present or future Serb government. It also may point to the challenges pro-EU Serbs have in trying to convince the population of the benefits of European integration.

Border Adjustments

Another controversial issue that had previously stirred debate both within and outside of Serbia and Kosovo and resurfaced again in summer 2018: the idea of border adjustments. The idea, raised in early summer 2018 by the Belgrade-based Center for Euro-Atlantic Studies,²⁴ suggested minimal adjustments to the administrative line of four municipalities in northern Kosovo as a possible starting point for the recognition of Kosovo. The proposed adjustments quickly evolved among some into calls for the partition of Kosovo and parts of Serbia. Under such a partition proposal, Kosovo would agree to cede the Serb-dominated parts of northern Kosovo (north of the Ibar River) in exchange for diplomatic recognition and/or territory in southern Serbia in the Albanian-dominated Presevo Valley. Both sides had rejected this idea in the past, as had many observers of the Serb-Kosovo debate. However, in early August 2018, Kosovo President Thaci discussed the concept when he made statements regarding "border corrections" with Serbia, although he denied proposing partition. It appeared that Vučić and Thaci may have been trying to lay the groundwork for a real debate over possible border adjustment that could have resulted in some type of political recognition of Kosovo. However, both leaders faced immediate opposition from their own sides and from much of the international community, which typically has rejected the idea of land swaps, even though Kosovo and Montenegro had agreed to their own border adjustment after a tense period. Curiously, the EU, which encouraged the Kosovo-Montenegro border agreement, seemed split on the Serbia-Kosovo border issue and the United States seemed to back away from outright opposition, deciding to see what both sides eventually proposed.

In early August, some 30 or more NGOs from Kosovo and Serbia—including some from Kosovo's majority-Serb north—reportedly may have sent a letter to EU High Representative Federica Mogherini asking for a clear EU stand against Kosovo's partition or an exchange of territories with Serbia along ethnic lines.²⁵ After this incident, both Vučić and Thaci appeared to back away from a further pursuit of the idea.

In addition, in September 2018, leaders of Serbian Orthodox congregations and Serbian-American organizations in the United States sent a letter to Members of Congress and the Administration asking the United States to protect the rights of Kosovo Serbs and to express strong opposition to the proposed ethnic partition of territory.²⁶

Relations with the EU

Under former President Boris Tadic and during Vučić's time as prime minister and now president, one of Serbia's foreign policy goals has been to join the European Union. Although the EU has welcomed Serbia's desire to join the union, it has conditioned progress on Serbia's EU candidacy on normalizing the country's relations with Kosovo. Most EU member states have recognized Kosovo as an independent country, but five EU countries have not for various reasons, including some of their own minority populations demanding independence.²⁷

In 2012, the EU officially recognized Serbia as a candidate for EU membership and in September 2013, a Stabilization and Association Agreement (SSA) between the EU and Serbia entered into force. In January 2014, Serbia was formally invited to begin EU membership negotiations. Serbia had aimed to finish negotiations with the EU and become an EU member by 2020 or 2021.

In December 2015, the EU opened negotiations on two chapters of the EU's body of laws, the acquis communautaire, concerning financial control and Kosovo. As of June 2018, Serbia had opened 14 chapters of the acquis and provisionally closed two chapters. In October 2017, Serbian Prime Minister Ana Brnabic made her first official visit to EU institutions with a message of reassurance that Serbia was committed to joining the EU and being an active member. In mid-2018, European Commission President Juncker revised the EU timetable for Serbia's accession to 2025 but stated that Serbia and Montenegro were the two earliest possible candidates to join the union given their accomplishments thus far. Some analysts, however, believe that ongoing disagreements over Kosovo's status could slow Belgrade's timetable.

Since becoming an EU candidate country, EU financial assistance to Serbia has been provided through the Instrument for Pre-Accession Assistance (IPA). According to the European Commission, the IPA funding allocation for Serbia for the period 2014-2020 amounts to approximately €1.5 billion. This figure does not include loans from the European Investment Bank or bilateral assistance from EU member states. Currently, there are some 600 EU projects being implemented in close cooperation with Serbian authorities, businesses, and civil society organizations. Serbia's trade with the EU totaled €1.9 billion ($2.1 billion) in 2016. Serb citizens enjoy visa-free travel throughout the EU.²⁸

According to the NGO Center for Free Elections and Democracy, between 52% and 55% of Serbs questioned still support closer relations with the EU. However, there has been some increase in anti-EU sentiment, mostly associated with the EU's insistence that Belgrade recognize Kosovo as an independent country. Some Serb officials, such as Innovation Minister Nenad Popovic and Defense Minister Aleksandar Vulin, reportedly have claimed that the EU-facilitated Belgrade-Pristina dialogue did not deliver any results.²⁹

Although Serbia has insisted that it be free to balance its relations between the EU and Russia, some EU officials have criticized Serbia for not joining EU sanctions against Russia in response to Russia's actions in Ukraine. However, the EU has not made implementing the sanctions a condition for progress toward Serbia's membership at this stage, making it appear that Serbia remains a top candidate for EU membership. Nevertheless, some believe EU attitudes toward Serbia reinforce the view of many in Belgrade that Serbia has not been fully embraced by Brussels and that it would be premature for Serbia to greatly distance itself from Moscow for now.

The EU-Western Balkans summit on May 17, 2018, in Bulgaria's capital, Sofia, was meant to reassure the western Balkan countries about their EU membership prospects. The 2015 migration crisis, in which hundreds of thousands entered the EU via the western Balkan route, was a reminder of the region's strategic importance. The EU is also worried about potential political instability and the influence of third powers such as Russia, China, and Turkey in the Western Balkans. Proponents of EU enlargement see it as the main tool to assure peace, stability, prosperity, and the rule of law in the region. Some speculate that the EU also feels the need for a new mission and purpose, such as integrating the Western Balkans, in the post-Brexit era.³⁰

One recent issue, however, has slightly soured Belgrade's relations with Brussels. After the Catalan (Spain) referendum resulted in a victory for independence, the EU rejected the vote. President Vučić echoed the view of many Serbs that Brussels's rejection of Catalan independence while endorsing Kosovo's was an example of the EU applying a "double standard."³¹ The EU dismissed the accusation as not comparable.

Relations with Russia

Russia has long considered much of the Western Balkans, but particularly Serbia, to be an area with which it has historical linkages, whether through ethnic connections to the Slavic populations or as a result of a 1774 treaty in which Catherine the Great forced the Ottoman Empire to grant Russia vague rights to "represent" the Christian people of the Balkans. This development established Russia's role as patron and father figure for the Orthodox Christians of the Balkans.³² During the Communist years, Russia exercised, despite a somewhat unstable relationship with the Yugoslav leader Tito, significant influence in the region, but after the collapse of the Soviet Union its influence waned. Russian influence today is limited to certain areas of the Western Balkans but appears strong among some elements of Serb society and rests mainly on popular support, the thousands of Russians who live or vacation in the region, and a strong Russian economic, energy, and media presence throughout the Balkans. Of particular concern for many is Russia's dominance of the natural gas market in the Balkans, which, with the exception of Romania, leaves the region vulnerable to exploitation. Without alternate energy sources and a more diversified Balkan energy infrastructure, Russia will continue to hold this powerful lever.³³

Beyond historical cultural and religious bonds with Russia, political and economic ties between Moscow and Belgrade were strong after the breakup of Yugoslavia and grew stronger during the NATO campaign against Serbia's actions in Kosovo, which Moscow opposed. Serbia enjoys a free trade agreement with Russia, Serbia's fourth-largest trading partner and market for Serbian goods. Russia supplies Serbia with all of its natural gas, which in 2016 amounted to around 2 billion cubic meters (bcm). In December 2017, Vučić traveled to Moscow and signed a new gas agreement that will boost Russian-delivered gas to Serbia to 5 bcm through 2021. Serbia also has sought and received Russian investment, especially in its oil and natural gas industry.

According to a 2017 survey by the Belgrade-based Demostat research center, 41% of Serbs surveyed perceive Russia as Serbia's greatest friend.³⁴ Moscow has reinforced these Serb attitudes on a number of issues, including the previously mentioned U.N. war crimes tribunal (ICTY), which Moscow maintained should have been shut down long ago, and Moscow's refusal to recognize Kosovo's independence. Moscow also maintained that former Kosovo Liberation Army commander Ramush Haradinaj, now Kosovo's prime minister, who was acquitted of war crimes by the ICTY in 2012, should not have been cleared.³⁵

The extent of Russian influence also is illustrated by a May 2016 study by the Center for Euro-Atlantic Studies. The study estimated that some 110 registered NGOs, associations, and media outlets operating in Serbia appeared to be directly connected with the Russian lobby in Serbia, up from about 12 in 2015.³⁶ The report suggested that the West was not taking seriously the impact of Russia's soft power on Serbia. The Kremlin's two main news networks, Sputnik and RT (formerly Russia Today), also are present in Serbia and offer television programming, online news, and radio broadcasts in the Serb language to Serb media outlets. In addition, Russian state newspaper Rossiyskaya Gazeta prints Nedeljnik, a widely read weekly, in Serbia.³⁷

Djordje Vukadinovic, a political analyst and editor-in-chief of Nova Srpska Politicka Misao, a magazine and portal dedicated to Serbian politics and perceived by some as close to Russia, agreed that Russian influence on Serbian media is significant. However, he added that Western views also are presented through the various American- and Western-owned media available in Serbia, such as Serbia's N1 radio and TV, Radio Free Europe, Voice of America, and Greek B92. He further noted that there are NGOs in Serbia that benefit financially from the West if they are perceived to be working to counter Russian influence.³⁸

The exact degree of Russia's influence on the political structures of Serbia is concerned is difficult to assess. With a fairly pro-Russian attitude within the government and among the population, Moscow may not feel it needs to be overly covert in its activities in Belgrade. Moscow reportedly supports several Serb political parties politically and financially. In 2016, three Serbian political parties, the Democratic Party of Serbia, the Dveri Movement, and the Serb People's Party, signed a declaration with Russia's ruling United Russia party supporting a neutral military area in the Balkans.³⁹ In the same Demostat survey cited above, 50% of Serbs stated that they supported the country's neutrality position.⁴⁰ However, some observers believe it is misleading to call Serbs and Russians allies and that many in the West make the mistake of oversimplifying Serbs as "little Russians." These observers believe the majority of Serbs in Belgrade and throughout Serbia have become more committed to closer relations with the West and that the perceived relationship between Serbia and Russia bears closer examination.⁴¹

The West also perceives Russian presence in a "friendly" Serbia as helping to project Russian influence elsewhere in the Balkans. According to a report published on June 2, 2017, by the Organized Crime and Corruption Reporting Project, NOVA TV, and the Crime and Corruption Reporting Network,⁴² agents from Russia's by the Organized Crime and Corruption Reporting Project, NOVA TV, and the Crime and Corruption Reporting Network, agents from the Russian Foreign Intelligence Service have planned and carried out Russianregional intelligence activitiesoperations from a station in the Serbian capital of Belgrade.Belgrade.⁶³ Ahead of the 2017 parliamentary elections in Montenegro, several ultranationalist Serbs, reportedly acting underon instructions of Russian intelligence officers in Belgrade, were arrested for the attempted assassination ofin relation to an alleged assassination plot against Montenegro's prime minister and attempting to derail Montenegro's accession to NATO.

One of the Russian facilities in Serbia that has caused concern in both Europe and the United States is a Russian "humanitarian" center located in Nis, Serbia. The center opened in 2012 and, according to the Kremlin, is involved in emergency training for Serbian first responders, in providing emergency humanitarian response, and in the prevention of natural disasters and technological accidents. The center is in a location relatively close to the NATO peacekeeping force next door in Kosovo. The United States and the EU have expressed concern that through the center, Russia is operating a subtly disguised military and intelligence operation set up by the Kremlin to spy on U.S. and other interests in the Balkans. Such concern was expressed byin attempt to derail Montenegro's accession to NATO. U.S. and EU officials have expressed concern at a Russian facility in the Serbian city of Niš. The Kremlin claims the center provides emergency humanitarian response training for Serbian first responders. However, the center is relatively close to the NATO peacekeeping forces in neighboring Kosovo, and the United States and the EU have expressed concern that Russia is using the center for military and intelligence operations. Former U.S. Deputy Assistant Secretary of State for European and Eurasian Affairs Hoyt Yee expressed this concern during a June 2017 hearing of the Senate Foreign Relations Committee's Subcommittee on Europe and Regional Security Cooperation.⁴³ The Serbian government has denied that it is permitting a Russian military base to operate at Nis.⁴⁴ Russia has also insisted that the center's staff in Nis be given the same diplomatic status that NATO staff in Serbia enjoy. In an August 2017 visit to Belgrade, the chairman of the U.S. Senate's Subcommittee on Europe expressed concern over the Russian request for diplomatic immunity for the Nis center and suggested the Serbs think seriously about whether to grant such status.⁴⁵

64 Russia also has requested that Serbia extend the diplomatic status that NATO officials enjoy in Serbia to the Russian staff at the Niš center. The Serbian government has denied that it is permitting a Russian military base to operate at Niš.⁶⁵

In early 2017, Russian President Putin and then-Serbian Prime Minister Vučić agreed to the deliverytransfer of six used MiG-29 fighter jets, 30 T-72 tanks, and 30 BRDM-2 armored vehicles to Serbia. According to reports, the weapons are being provided free but the cost to "fully modernize and refurbish" them in Serbia will be paid by the Serbs. The first of the MiGs were delivered in early October 2017. Additional reports suggest that Serbia expressed interest in buying a Russian air defense system as well as opening a repair center for Russian MIL helicopters, which analysts believe would be tantamount to opening a Russian military base on its territory. In all, the current and future arms purchase agreements could worsen tensions with neighboring states, particularly with Croatia and Kosovo, and could trigger an arms race in the region.⁴⁶

Despite its relations with Russia, Serbia participates in NATO's Partnership for Peace (PfP) program (which it joined in 2006), including through joint exercises and training opportunities. NATO maintains a small office in Belgrade. In 2015, Serbia signed an individual Partnership Action Plan, a higher-level cooperation agreement designed for countries not intending to join NATO. And although Serbia's military forces have exercised with Russian forces, including two exercises in 2017 with Russian and Belarussian forces, in 2017, Serb forces participated in 13 military exercises with NATO members and 7 with U.S. forces.⁴⁷ More recently, on October 8-11, 2018, Serbia hosted a NATO emergency response exercise involving several hundred personnel from numerous countries in Mladenovac, near Belgrade. Nevertheless, Belgrade has been under constant political pressure from Moscow, which continues to pursue a goal of keeping all countries in the Balkan region, and especially Serbia, out of NATO and other Western institutions. Among a majority of Serbs, continuing resentment of NATO air strikes in Serbia in 1999 and of U.S. support and that of other leading NATO countries for Kosovo's independence, also drives Serbia's relations with Russia.

Relations with Moscow received a blow in 2014, when Belgrade was caught off guard by President Putin's sudden decision to cancel the South Stream gas pipeline project, which would have run through Serbia, providing Serbia with gas and revenue from transit fees. It is unclear whether Russia's replacement for the project, the TurkStream pipeline, will come to fruition, andarmored vehicles to Serbia. Serbia will bear the cost of upgrading and modernizing this equipment. In addition, media reports suggested Serbia was interested in acquiring a Russian air defense system and establishing a facility to repair Russian MIL helicopters, which some analysts likened to "opening a Russian military base on [Serbian] territory."⁶⁶ Serbia's arms purchases have the potential to exacerbate tensions with neighbors such as Kosovo and Croatia.⁶⁷

However, some observers believe the extent of Russian influence in Serbia is often exaggerated.⁶⁸ These observers contend that most Serbians are also committed to Euro-Atlantic integration.⁶⁹ For instance, although Serbia's joint military exercises with Russia and observer status in the Russian-launched Collective Security Treaty Organization are widely reported, Serbia participates in a greater number of exercises with NATO and the United States than with Russia. In 2017, Serbian forces participated in 2 joint exercises with Russia and Belarus but held 13 exercises with NATO members and 7 with U.S. units.⁷⁰ Serbia joined NATO's Partnership for Peace program in 2006 and in 2015 signed an individual Partnership Action Plan, an agreement with a more extensive level of cooperation designed for countries that do not aspire to join NATO. Nevertheless, some analysts believe Belgrade is subjected to pressure from Russia, which hopes to thwart further NATO expansion into the Western Balkans.

Serbia's relationship with Russia experiences occasional tensions. For example, relations with Moscow received a blow in 2014 when Belgrade was reportedly caught off guard by President Putin's decision to cancel the South Stream gas pipeline project, which would have run through Serbia and provided it with gas and transit fee revenue. It is unclear whether Russia's replacement for the project, the TurkStream pipeline, will come to fruition and, if so, what role Serbia would play in the transmission of gas into Europe. Additionally, Belgrade's relations with Moscow soured somewhat after Belgrade publicly called for respecting Ukraine's sovereignty and territorial integrity after Moscow annexed Crimea and supported separatist elementsaided separatists in eastern Ukraine. Serbia, however, as noted above, did not join the EU and the United States in imposing political or economic sanctions on Russia for its actions in Ukraine. Finally, Moscow also has noted Belgrade's courting of Ankara and Bejing for economic investment and development, as noted above.

Relations with the United States

In 1999, the United States broke off relations with Belgrade when the Serbs launchedSerbia conducted an ethnic cleansing and deportation campaign against ethnic Albanians living mostly in Serbia's province of Kosovo. This was followed by a bombing campaign of Serbia by NATO that lasted 78 days until the Serb government agreed to allow the establishment of UNMIK and the NATO-led Kosovo Force (KFOR), which allowed displaced persons and refugees to return to their homes. The United States formally reopened its embassy to the Yugoslav Federation in 2001 after the collapse of the regime of Serbian strongman Slobodan Milosevic in 2000. The United States has viewed a democratic and prosperous Serbia, at peace with its neighbors and integrated into Euro-Atlantic institutions, as an important part of its key policy goal of a Europe whole, free, and at peace. U.S.-Serbian ties deteriorated again after U.S. recognition of Kosovo's independence in February 2008, but recovered soon afterits ethnic Albanian minority population, primarily in the province of Kosovo. In response, NATO carried out a bombing campaign against Serbia that lasted for 78 days and ended with the creation of UNMIK and KFOR to stabilize the region and enable the return of displaced persons. Since Serbia's 2000 transition, the United States has viewed a stable, democratic Serbia as essential to stability in the Balkan region. U.S.-Serbian ties were strained when the United States recognized Kosovo's independence in 2008 and remained one of Kosovo's strongest external supporters. Although the United States has offered to "agree to disagree" with Serbia over Kosovo, the issue may continue to affect relations, particularly as the United States generally remains Kosovo's most influential international supporter.

In early 2016, U.S.-Serbia relations hit a snag when the U.S. ambassador, along with his UK colleague, was accused by a daily newspaper close to Vučić of instigating chaos in Serbia and even of intending to overthrow the prime minister. Vučić abruptly canceled plans to visit the United States withSerbian relations were strained when a daily newspaper close to then-Prime Minister Vučić accused the U.S. and U.K. ambassadors of provoking chaos in Serbia in hopes of overthrowing Vučić. This prompted Vučić to cancel a scheduled visit to the United States to commemorate the inaugural Air Serbia flight to New York and; he instead met with President Putin in Moscow. Relations were eventually smoothed over when, during a July 2016 visit to Belgrade by the then-U.S. Assistant Secretary of State for European and Eurasian Affairs, Victoria Nuland, it was announced that Serbia had agreed to allow two Guantánamo inmates, one Yemeni and one Tajik national, to be transferred to Serbia.⁴⁸ inmates from the Guantánamo Bay detention camp in Cuba to be relocated to Serbia.⁷¹ Relations between the United States and Serbia continued to improve and in. In June 2017, President Vučić visited Washington, DC, and met with Vice President Mike Pence. Some Members of Congress expressed concern over the meeting because of Serbia's relations with Russia, but but it was reported that Vice President Pence reportedly raised the issue of Russia and Russia's "humanitarian" center in NisNiš, Serbia, with Vučić. Relations again hit a slight snag in October 2017, when the U.S. Ambassadorambassador to Belgrade was accused, mostly by the progovernmentpro-government press, of interfering in Serbia's internal affairs after he reportedly criticized Defense Minister Aleksandar Vulin's expressions of support for convicted war criminals, suggesting that such comments might undermine efforts to improve Serbia's image in the United States. Similar complaints again erupted in Belgrade after the October 2017 visit of U.S. Deputy Assistant Secretary of State Hoyt Yee, who was accused by the Serbs of demandingwhom Serbia accused of insinuating that Belgrade would soon have to choose between the West and Moscow.

U.S. foreign aid to Serbia has fluctuated for several years, perhaps reflecting overall U.S. budgetary stringency, changing U.S. global priorities, and the expectation that Serbia would receive increased aid as an EU membership candidate. The United States provided $22.9 million in aid to Serbia in FY2014, $14.2 million in FY2015, and $16.8 million in FY2016. For FY2017, the Obama Administration requested approximately $23 million, including $16 million in economic support funding (ESF), $1.8 million in Foreign Military Financing (FMF), and $1 million in International Military Education and Training (IMET). The FY2018 budget submission from the Trump Administration requested $12.1 million, including $8 million in economic support and development assistance (ESDA)Economic Support and Development Assistance and $1.0 million in IMET. The Senate Foreign Operations and Related Agencies appropriations bill for FY2018 included $12.9 million in economic support, along with $1 million in IMET and $1.8 million for Foreign Military Financing (FMF)FMF. The Trump Administration's FY2019 request was for $10.5 million, including $6.4 million in Economic Support and Development.

According to the U.S. Department of State, targeted U.S. assistance continues to focusfocuses on helping Serbia further integrate into the EU as it moves forward with negotiations and opens additional chapters in the accession process. Assistance will focus on strengthening democratic institutions and the rule of law; reducing corruption; increasing the capacity ofnew chapters are opened in the accession process. Assistance focuses on supporting democracy and the rule of law, rooting out corruption, supporting civil society organizations and independent media; fostering broad-based, inclusive economic progress; enhancing export and border controls; and building goodpress, supporting economic development, strengthening Serbia's border regime, and building positive bilateral relationships with neighboring countries. Serbia relationships with neighboring countries. According to the Administration, support will also help build Serbia's resilience in the face of external pressure from Russia.

Other U.S. aid is targeted at strengthening Serbia's export and border controls, including against the spread of weapons of mass destruction. Serb-U.S. military relations also have improved recently, as U.S. military aid has helped Serbia participate in NATO's Partnership for Peace programs and prepare for international peacekeeping missions. In November 2017, paratroopers from the United States and Serbia held a joint exercise in Serbia.⁴⁹72 The Ohio National Guard also participates in a partnership program with Serbia's military.

Among the leading U.S. investors in Serbia are KKR,American firms including Philip Morris, Coca-Cola, Ball Packaging, Coca-Cola, PepsiCo, Cooper Tire, and Van Drunen Farms. There has been increased interest from U.S. technology companies in Serbia, with specific emphasis on opportunities in e-government, cloud computing, digitization, systems integration, and IT security.PepsiCo, KKR, Cooper Tire, and Van Drunen Farms have invested in Serbia. In 2013, Microsoft signed a $34 million software contract with the Serbian government. U.S. technology companies likewise have demonstrated interest in investing in Serbia.⁷³ In 2013, contract to provide software to Serbian government offices in 2013. Imports from Serbia have increased since 2013, when Fiat began shipping cars manufactured in its plant in Serbia to the United States.

According to the U.S. Department of State's 2018 Trafficking in Persons report, Serbia is "a source, transit, and destination country for men, women, and children subjected to sex trafficking and forced labor. The Department of State has indicated that the government of Serbia has demonstrated significant efforts to address trafficking by operationalizing a permanent human smuggling and trafficking law enforcement task force, identifying more victims, and providing guidelines to"⁷⁴ The Office to Monitor and Combat Trafficking in Persons notes that Serbia's government has undertaken "significant efforts" to address the problem, establishing a law enforcement task force devoted to trafficking, expanding the identification of victims, and establishing guidelines for prosecutors and judges. However, Serbia remains listed as a Tier 2 country because the State Department has determined that, despite these efforts, the Serbian government has not yet fully complied with the minimum standards for the elimination ofeliminating trafficking.⁵⁰

75

According to the U.S. Department of State's 2016 report on terrorism, the government of Serbia has continued its efforts to counter international terrorism. Serbia has hosted a regional counterterrorism conference focused on foreign terrorist fighters and has sent representatives to countering violent extremism conferences hosted in Albania, Italy, and Slovenia. Serbia's law enforcement and security agencies, the Ministry of Interior Directorate of Police, and the Security Information Agency continued bilateral counterterrorism cooperation with the United States.⁵¹

Issues for Congress

Serbian law enforcement and security agencies receive assistance and training from the United States.⁷⁶ Issues for Congress

Congressional interest in Serbia (and Kosovo) dates to the 1991-1999 conflicts in the Western Balkans. Over time, Congress has established Member caucuses on both Kosovo and Serbia and has held several hearings on the Western Balkans. In 2018, the Serbia Caucus in the House noted the 100^th anniversary of Woodrow Wilson's "day of prayer" for the people of Serbia. In 2018, the Serbian diaspora and Eastern Orthodox Church sent a letter to Congress regarding the discussions surrounding a possible land swap between Serbia and Kosovo. Many Members of Congress support Kosovo's independence, the efforts at reconciliation between Serbia and Kosovo, and EU membership for both countries, but other Members have expressed skepticism about Serbia's relations with Russia or the future viability of the Serbia-Kosovo coexistence.

Over the past several years, Congress has maintained a steady interest in the stability of the Western Balkans and has supported the efforts of those countries to join the EU and NATO. House and Senate committees have held several hearings on the Balkans during the 114^th and 115^th Congresses. Some Members of Congress also visited countries in the Western Balkans during the summer ofin 2017 and in 2018.

The United States has viewed a democratic and prosperous Serbia, at peace with its neighbors and integrated into Euro-Atlantic institutions, as an important part of its key policy goal of a Europe "whole, free, and at peace." Recognizing that Serbia is an important political and economic factor in the overall future of the Western Balkans and that the United States has provided a sizable amount of assistance to Serbia, Congress may want to focus more specifically on U.S. relations with Serbia; its role in the Western Balkans; Serbia's EU membership negotiations; and SerbSerbia-Russia relations, particularly the operation of the Russian facility in NisNiš and Russian support for pro-Moscow political parties in Serbia. Congress likely will continue its interest in developments in the SerbSerbia-Kosovo relationship, which could continue to constrain closer U.S. cooperation with Belgrade.

Figure 1. Map of Serbia

Source: Created by CRS using data from IHS and ESRI.

Author Contact Information

Footnotes

Definitions of the region known as the Balkans in southeastern Europe vary. For purposes of this report, the Balkans refers to the entire geographic region between the Adriatic Sea and the Black Sea; it includes the countries of the former Yugoslavia, Albania, Romania, Bulgaria, Greece, and a part of Turkey. The Western Balkans usually refers to Bosnia and Herzegovina, Croatia, Kosovo, Macedonia, Montenegro, Serbia, Slovenia, and Albania.

8. 13. 19. 24. 27. Economist Intelligence Unit, "Government Signs New Agreement with the IMF," August 3, 2018.

33. Hamdi Firat Buyuk, "Turkish Exports to Balkan Countries Rise Rapidly," BalkanInsight, June 21, 2018.

41. Cyprus, Spain, Greece, Romania, and Slovakia do not recognize Kosovo's independence for various reasons, including ethnic disputes in several countries. Op. cit. EIU.

70. 74.

Ibid.

1.	CIA, The World FactBookWorld FactBook: Serbia, August 2017.
2.	Throughout this report, Serbia refers to the Federal Republic of Yugoslavia (1992-2003), the State Union of Serbia and Montenegro (2003-2006), and the Republic of Serbia (since 2006).	3.
34.	'Western Balkans to 2025: A Brighter Future or Permanent Marginalization," Economist Intelligence Unit, July 2018.
4"Democracy Index 2017: Free Speech under Attack," Economist Intelligence Unit, 2018. Kosovo is not included in the rankings.
5.	Serbia cooperates with NATO but does not seek membership.
6.	"Serbia: Elections in 2014," Inter-Parliamentary Union, at http://archive.ipu.org/parline-e/reports/arc/2355_14.htm.
7.	Vojislav Šešelj, an ethnic Serb from Bosnia, is the leader of the Serbian Radical Party. He voluntarily surrendered to The Hague in 2003, and his war crimes trial lasted for years. He was released in 2014 to receive cancer treatment in Belgrade; upon his return to Serbia, he returned to political life. In 2016, he was acquitted. However, his first-instance verdict was partly reversed on appeal in 2018. He was found guilty of crimes against humanity and sentenced to 10 years in prison, a term he had served already in the custody of the International Criminal Tribunal for the former Yugoslavia.
"Vucic Reaps Benefits from Guantanamo 'Favor,'" BalkanInsight, July 19, 2016.
59.	Vanja Djuric, "Anti-Government Protests Continue in Belgrade, Novi Sad," BalkanInsight, April 5, 2017.
610.	10 Comments reported by Prime Minister Ana Brnabic, EurActiveBrnabić, EurAktiv.rs, July 7, 2017.
7.	Economist Intelligence Unit, Country Report on Serbia, August 2018.
811.	Dejan Anastasijevic, "Hard Days Ahead for Serbia's Gay PM," EUObserver, June 19, 2017.
12.	Center for Research, Transparency, and Accountability, Study c.f. Miloš Damnjanović; Freedom House, Nations in Transit 2017: Serbia Country Report.
"Serbian Media Group Files 150 Suits Claiming 'Repression,'" Balkan Media Watch, August 8, 2017.
914.	Julija Simic, "Serbian Media Under Political Pressure," Euractiv, September 21, 2017.
15.	Freedom House, "A Cry for Help from Serbia's Independent Media," October 5, 2017.
16.	Ibid.
17.	Economist Intelligence Unit, Country Report on Serbia, August 2018.
18.	Aleks Eror, "How Aleksandar Vucic Became Europe's Favorite Autocrat," Foreign Policy, March 9, 2018.
"Serbian Minister Reaffirms Praise for Freed War Criminals," BalkanInsight, October 12, 2017.
1020.	Law Library of Congress, "Netherlands: Special Tribunal for Alleged War Crimes," Global Legal Monitor, January 2016.
1121.	Statement of the Humanitarian Law Center, HLC, March 2018.
1222.	Milos Stanic, "27 Years On, Croatia Tries Serbs for Vocin Massacre," BalkanInsight, October 15, 2018.
23.	European Union Civil Protection and Humanitarian Aid Operations, "Serbia Factsheet," July 20, 2018.
United Nations High Commissioner for Refugees (UNHCR), "Serbia Update," September 2017.
1325.	U.S. Department of State, 2016 Country Reports on Terrorism.
1426.	Ibid	Economist Intelligence Unit, "Country Report: Serbia," October October, 2018.	28.
1529.	Ibid.
1630.	World Bank, "Western Balkans Regular Economic Report: Higher but Fragile Growth," No. 14, Fall 2018.
31.	International Labour Organization, 2017.
32.	World Bank, Doing Business 2019, 2018.
"Turkey's President Erdogan to Visit Serbia," BalkanInsight, August 9, 2017.
1734.	Op. cit. EIUIbid.	35.
1836.	Economist Intelligence Unit, "China's Expanding Role in the Western Balkans," October 19, 2018.
37.	Stevan Veljovic, "New Smederevo Steel Mill Owner Promises Investments and Jobs – For Now," BalkanInsight, May 2, 2016; Aleksandar Vasovic, "China's Zijin Mining to Take Stake in Serbian Copper Complex," Reuters, August 31, 2018.
38.	Economist Intelligence Unit, "China's Expanding Role in the Western Balkans," October 19, 2018.
39.	European Union Delegation to Serbia, "Benefits from Serbia-EU Trade."
40.	European Union Delegation to Serbia, "FDI to Serbia."
ERBD, "ERBD to Support Western Balkans Regional Economic Integration and Trieste Summit," press release, July 7, 2017.
19.	European Bank for Reconstruction and Development, "Country Overview: Serbia," 2017.
20.	"Serbia Completes Successful IMF Program," IMF Country Focus, February 22, 2018.
2142.	"Serbia Pays Off Kosovo's Billion Euro Debt," BalkanInsight, July 12, 2017.
2243.	"Serbia Must Implement Energy Deal, Kosovo Negotiator Says," BalkanInsight, July 27Donika Emini and Isidora Stakic, "Belgrade and Pristina: Lost in Normalisation?" European Union Institute for Security Studies Brief No. 5, 2018.
2344.	"Serbian Students Doubtful About Deal on Kosovo," Mitjo Vaulasvirta, BIRN, September 24Michael Rossi, "Brussels Agreement Remains Kosovo's and Serbia's Best Hope," BalkanInsight, April 19, 2018.
2445.	"West Side Story," Report of the Center for Euro-Atlantic Studies, June 2018. Serbia Must Implement Energy Deal, Kosovo Negotiator Says," BalkanInsight, July 27, 2018.
2546.	"EU Urged to Speak Up Against Kosovo PartitionIgor Jovanovic, "Serbia and Kosovo Reach Four Key Agreements," BalkanInsight, August 726, 2018.
2647.	See Eastern American Diocese of the Orthodox Serbian Church website at http://www.easterndiocese.org/linksGordana Knezevic, "Kosovo Assassination Leaves Fear, Silence in its Wake," RFE/RL, January 22, 2018.
2748.	Cyprus, Spain, Greece, Romania, and Slovakia do not recognize Kosovo's independence for various reasons, including ethnic disputes in several countries.
28.	European Commission, "European Commission Enlargement Policy: Serbia."
29.	"Anti-EU Rhetoric Risks Swaying Serbian Public, Experts Say," BalkinInsight, September 28, 2018.
30.	Op. cit. EIU.
31.	"EU's Catalan Response Leaves Serbia Feeling Aggrieved," BalkanInsight, October 11, 2017.
32.	Marcus Tonner, "Russia Never Went Away From the Balkans," BIRN, February 8, 2017.
33.	Ibid.
34.	"Serbians Support Military Neutrality, Research Says," as reported by BalkanInsight, September 5, 2017.
35"Kosovo: Serbia President Aleksandar Vucic Condemns Arrest of Marko Djuric," DeutscheWelle, March 27, 2018; "Andrew MacDowall, "Kosovo Detains Serbian Politician after 'Illegal Entry' into Region," Guardian, March 26, 2018; "Kosovo Deports Senior Serbian Official for Illegal Entry," RFE/RL, March 26, 2018.
49.	Adelina Ahmeti, "Kosovo Releases Arrested Serbs under Pressure from Belgrade," BalkanInsight, July 10, 2018.
50.	"Vucic, Thaci Exchange Angry Statements After Brussels Meeting," BalkanInsight November 8, 2018.
51.	Emini and Stakic, op cit.
52.	Ibid.
53.	Marta Szpala, "Serbia-Kosovo Negotiations—Playing for Time under Pressure from the West," Centre for Eastern Studies Commentary, August 21, 2018.
54.	"EU Urged to Speak Up Against Kosovo Partition," BalkanInsight, August 7, 2018.
55.	Russian Minister Says Hague Tribunal "Should Be Closed," Balkan Transitional Justice report, October 16, 2017.
3656.	"Eyes Wide Shut," report of the Center for Euro-Atlantic Studies, Belgrade, May 2016. Delegation of the European Union to the Republic of Serbia, "EU and Serbia at Work."
3757.	"Russia Stirs a Hornets Nest," Stratfor, March 28, 2017European Commission, "European Commission Enlargement Policy: Serbia."	58.
3859.	"How Influence of Russian Media Risks Making Serbia a Moscow Bureau," Committee to Protect Journalists, October 20, 2016Marcus Tonner, "Russia Never Went Away From the Balkans," BIRN, February 8, 2017.
3960.	"Serbia Parties Sign Declaration with United Russia Party," B92, June 2016Vuk Vuksanovic, "Serbs Are Not 'Little Russians,'" The American Interest, July 26, 2018.
4061.	Op. cit., DemostatCenter for Euro-Atlantic Studies, Eyes Wide Shut, May 2016.
4162.	"Serbs are Not 'Little Russians,' Vuc Vuksanovic, The American Interest, July 26, 2018. Serbia Parties Sign Declaration with United Russia Party," B92, June 2016.
4263.	"Russian Meddling in Balkans A matterMatter of Supply and Demand," BalkanInsight, June 12, 2017.
4364.	Testimony of Deputy Assistance Secretary of State Hoyt Yee before the Senate Subcommittee on Europe and Regional Security, June 14, 2017.
4465.	"Serbia Denies Plans to Open Russian Military Base," InSerbia.info, December 2014.
4566.	"Senator Opposes Immunity for Serbia's Russian Center," BalkanInsight, August 30Dusan Stojanovic, "Putin to Approve Weapons Delivery to Balkans, says Serbian Defense Minister," Associated Press, March 28, 2017.
4667.	"Serbia: Putin Agrees to Large Weapons Delivery to Balkans," VOA, March 29, 2017.
4768.	Vuk Vuksanovic, op. cit.
69.	Ibid.
According to the 2017 International Institute for Security Studies' Military Balance report, Serbia's armed forces number approximately 28,000 active personnel and approximately 50,000 reserves. The SerbSerbian army is the largest branch, with approximately 13,000 personnel. The Air Force consists of some 60 combat-capable aircraft.
4871.	Op. cit. BalkanInsight, July 19, 2016.
4972.	"Serb, U.S. paratroopers jump together to boost ties," New York Times, November 17, 2017.
5073.	United States Embassy in Serbia, "US & Serbia Relations."	U.S. Department of State annual, Trafficking in Persons report, 2017. Report, 2017.	75.
5176.	U.S. Department of State, Country Reports on Terrorism, 2016.