Serbia to avoid sides in Ukraine crisis, President Nikolic says

Bloomberg: 10. july 2014

By Gordana Filipovic

Tomislav Nikolic, Serbia's president, pauses during an interview at his office in Belgrade..

Serbia will strive to remain on the sidelines of the Ukrainian crisis that has put the European Union, which it wants to join, at odds with Russia, its longtime ally from Soviet times.

The largest ex-Yugoslav republic, whose $40 billion economy is facing a third recession since 2009, will seek to become a bridge for investment between east and west, President Tomislav Nikolic said in an interview in his Belgrade office yesterday. Serbia needs trade and investment after devastating floods in May caused $2 billion damage.

“It would be very unpleasant if we were forced to take sides,” Nikolic said. “That would even divide Serbia. Many people in Serbia are Russophiles, while others accept western civilization as a better foundation for their life.”

Foreign direct investments in Serbia dropped to 201 million euros ($286 million) in the four months through April, or 8.6 percent less than in the same period last year, according to central bank. Recovery from the floods will fuel the budget deficit to more than 8 percent of economic output, the highest in Europe.

A prolonged European-Russian dispute over Ukraine may prompt “many EU investors to urgently transfer their investments to Serbia because it seems that Europe will impose sanctions that could negatively affect small and medium-sized EU companies that do good business with Russia,” he said.

East, West

Nikolic, who founded the Serbian Progressive Party in 2008, was once a prominent member of the Radical party led by Vojislav Seselj. Seselj is a former associate of Serbian strongman Slobodan Milosevic and is awaiting a Hague court verdict on charges of war crimes and crimes against humanity. The Progressive Party dominates the ruling coalition after March 16 general elections.

Nikolic said his east-west orientation follows one pursued by former Yugoslav President Josip Broz Tito.

“Nowadays, Tito’s foreign policy concept is the only right choice,” while any other way would be wrong, he said.

The conflict between the EU and Russia over Ukraine won’t affect Serbia’s plans to build its arm of the South Stream pipeline, which is designed to ship Russian natural gas via the Black Sea and the Balkans to the EU. The South Stream project is meant to avoid “insecure and unstable” shipments through Ukraine, he said.

“Serbia has friends both in the West and in the East and they must not tear us apart, pulling us one way or the other,” Nikolic said. “I don’t expect Serbia to be in a position to make a choice between the two because Serbia would not be able to choose.”