How to kill four birds with one stone: The West’s foreign policy challenge in Serbia

The European Union and the United States pursue four broad foreign policy objectives in their relations with Serbia: contain Russia, contain China, normalise Serbia-Kosovo relations, and protect the sovereignty of Bosnia and Herzegovina. However, for many years now they have achieved little success on any of these matters. Several reasons explain this, some lying within Serbia and some within Western capitals. EU and US policymakers could change this dynamic, but it appears unlikely they will do so.

Western governments consistently treat Belgrade as the indispensable player on the major questions facing the Western Balkans. Whatever the issue at hand, Serbia’s president, Aleksandar Vucic, is the first person they call. Part of this is understandable: power in Serbia is concentrated with Vucic, who has accrued considerable control to himself. And by any measure Serbia is the strongest country in the region. It enjoys sufficient political and financial leverage over unruly Serb politicians in Bosnia, northern Kosovo, and Montenegro to rein them in when they cause trouble.  

Yet Western governments’ record sheet is thin. Serbia has so far refused to participate in all rounds of EU sanctions against Russia and shows no sign of changing course on this. As an EU candidate country, Serbia is supposed to align with the bloc’s foreign policy positions – but its recent compliance in this area has dropped to just 45 per cent, down from 64 per cent in 2020. China’s influence in Serbia has grown rather than diminished, whether measured by investment, Chinese presence in the country’s critical infrastructure, or political and cultural ties. Serbia continues to support Milorad Dodik, president of the Republika Srpska entity in Bosnia and Herzegovina, whose actions and rhetoric threaten the destruction of the country’s central government. On Serbia and Kosovo, despite hype about a recent proposal by France and Germany, a sustainable solution remains unlikely. And on 23 January this week, Vucic gave a televised speech lasting an hour and a half whose contents give many reasons to doubt he is taking part in negotiations in good faith.

Meanwhile, Vucic effectively controls the media in Serbia, whose influence seriously narrows the space for solutions to these problems, trammelling the choices available to Serbia’s politicians – including his own. He has built up an image of the West as an enemy and portrays himself as struggling heroically not to succumb to Western pressure to align with the EU’s sanctions on Russia or offer concessions to Kosovo. This discourse is amplified by Russian television operations in the country: the EU-sanctioned Russia Today launched its operations in Serbia in November 2022, while Sputnik has never ceased to broadcast there. Just after a meeting last week between Vucic and EU and US representatives on the Franco-German proposal, Sputnik aired Vucic’s 23 January address, in which he expressed pride in resisting alignment with EU sanctions on Russia. The speech was marked with bad-faith statements about Kosovo’s prime minister, Albin Kurti, and the EU and US delegations he had just negotiated with.

If Brussels and Washington are taking note of all this, it is not apparent. Belgrade’s refusal to align with EU sanctions has so far brought no serious consequences for its relationship with either the EU or the US. The public rhetoric of EU and American officials towards Serbia continues to assume that Serbia is a reliable partner and factor of regional stability, whatever harsher words may be spoken behind closed doors.

In short, Vucic’s confidence that he can continue on his current course stems from the West’s consistent failure to develop and exercise the potential leverage it has. Indeed, the president masterfully uses each of the key issues to obscure responsibility for not delivering on others.

Recognise Kosovo? Too difficult, given the right-wing nationalist opposition and public opinion (which Vucic has helped shape). After last week’s Franco-German proposal meeting, he announced to the Serbian public that, thanks to him, recognition of Kosovo is off the table.  

Deal with secessionism in Bosnia and Herzegovina? He claims to do this, yet up pops Dodik as a welcome guest in Belgrade, including in attendance at Serbia’s largest military exercises, which showcase Serbia’s military ability to defend “our country and our people”. In a similar vein, Serbia’s foreign minister is a regular guest at the unconstitutional 9 January celebrations in Banja Luka, which commemorates a wartime initiative to unify Republika Srpska and Serbia.

Decouple from Russia? He would like to, but 80 per cent of Serbia’s population oppose sanctions on Russia – in part thanks to the media he controls constantly putting out pro-Russian messaging. Ditto for China, which became the largest single investor in Serbia in 2022 and whose popularity in Serbia has increased exponentially, again due to the government-controlled media.

A different approach: Possible, but unlikely

There will be little incentive for Serbia to change so long as there are no consequences for playing the West off in this way. But the main obstacle lies as much in Western capitals as in Belgrade. When push comes to shove, Western officials appear to have no desire to invest political capital in seeking sustainable solutions by addressing the root of the problems. Privately, for example, many Western officials suggest that Serbia is doing “enough” on Ukraine and that the West should not push it further into Russia’s and China’s arms.

Theoretically, the EU and the US could approach this differently, applying dual tactics towards Serbia – engagement and cold shoulder. They could each accompany engagement with the active use of political and economic leverage towards well-defined goals, such as ending Serbia’s destabilising policy of meddling in the affairs of neighbouring states that host Serbian minorities. But they would also need to be ready to ensure there are consequences for failing to meet these goals.  

Neither the EU nor the US lacks leverage in Serbia. Indeed, as the charts below show, Serbia is predominantly integrated into Western economic structures, conducting most of its trade with the EU, and receiving considerable foreign direct investment from the bloc. And while China has grown in importance, its contribution to Serbia’s economy is insignificant compared to cumulative investment and trade from the EU. Russia is even less important – in 2021, 65 per cent of Serbia’s exports went into the EU and only 3 per cent to Russia. Investment from the EU continues despite Serbia’s poor foreign policy track record.

More broadly, key capitals such as Berlin and Washington could deliver a sharper response to Vucic’s domestic anti-Western propaganda, increasing the costs to him of its use. For example, EU and US officials could stop giving him an audience each time they visit the region. Numerous sources over the years have suggested that a fear of missing out would have an impact on Vucic’s behaviour. Playing on this could be one of the keys to changing the dynamic of the relationship.

To take another issue area: this week, Vucic publicly claimed the EU threatened to abolish the visa-free regime and withdraw all investment if he does not accept the Franco-German plan. This is likely exaggerated, given that the EU avoids using the visa-free regime as a threat and member states such as Germany claim not to have control over private investors. Yet a tougher approach along these lines is precisely what is needed, alongside additional sticks such as wider targeted sanctioning of nationalist criminal actors that foment instability the region, and their political patrons.

Indeed, still missing from the wider approach is the absolutely vital need to weaken the existing patronage system that links government officials with clandestine networks, whether in Serbia or beyond its borders in northern Kosovo, Bosnia, and Montenegro. Loosening the grip of criminal networks over the state and improving the transparency of governance would set off an important ripple effect across the region, where state capture and criminality often hide behind destabilising ethnic politics. The muddled jurisdictions and legal grey zones in Republika Srpska or northern Kosovo, which political leaders seek to legitimise by making demands for greater “ethnic autonomy,” allow organised crime to flourish and entrench state capture. The history of post-Dayton Bosnia is full of examples that attest to the tight link between crime and nationalist politics.

Western policymakers should study these cases carefully before contemplating constitutional models in northern Kosovo such as the Association of Serb Municipalities. They should also be aware that, for Russia and China, untransparent and unaccountable governance models provide ideal environments in which to operate. This issue should therefore be one of the first areas for action for Western policymakers: resolving Serbia’s and the region’s rule of law problems would make operating there harder for Russia and China and weaken ethno-criminal networks of influence across the Western Balkans.

All this could be part of a new EU and US approach to the region, if the key Western powers were indeed keen to adopt a longer-term framework for action and invest greater political capital. Yet, for the time being, Western Balkans strongmen and wider associated networks will remain at liberty to manufacture instability in the region – part and parcel of their methods for holding on to power and remaining popular without being accountable.