LOCAL PRESS

Ban Ki-moon: Community of Municipalities cornerstone of Brussels agreement (Tanjug)

UN Secretary-General Ban Ki-moon stresses in his latest report on Kosovo the importance of establishing the Community of Serb Municipalities (ZSO). In his latest regular report on the work of the UN mission in Kosovo, UNMIK, covering the period from July 16 to October 15, Ban also emphasized the importance of drafting the future community’s statute within the agreed framework, noting that the ZSO is “one of the cornerstones of the Brussels agreement.” The part of the EU-brokered agreement reached in the Belgrade-Pristina dialogue relating to the Community of Serb Municipalities has been suspended by Pristina earlier this week. In his report, Ban welcomes “the continuous progress” in the Brussels dialogue and the agreements reached on August 25, and especially that related to the ZSO. “The establishment of the association/community is an essential step towards achieving the full implementation of this historic agreement and further improvement in the daily lives of Kosovo’s population,” the UN chief stated, and added: “I congratulate Prime Minister Vucic and Prime Minister Mustafa on their exceptional leadership in carrying this process forward. I encourage all leaders in Pristina and Belgrade to sustain this momentum, including by finalizing the statute of the association/community in the time frame agreed, as well as ensuring swift implementation of all agreements included in the August 25 package.” Ban also “strongly welcomed the much awaited endorsement of the constitutional amendment and other laws to establish the Specialist Court by the Assembly of Kosovo.” “The progress made in this regard has been crucial to demonstrate Kosovo’s commitment to the fundamental principles of justice and accountability. I call upon all stakeholders to expeditiously complete the remaining arrangements for the full and prompt establishment of the court,” the report said.

Serbia admitted to UNESCO Executive Council (Novosti)

Serbia was granted four-year membership in the UNESCO Executive Council on Wednesday, Serbian Ambassador in UNESCO Darko Tanaskovic told Tanjug. A total of 186 countries took part in the voting, of whom 161 voted in favor of Serbia’s membership, which can be considered an excellent result after the major divisions in the General Conference over the request for Kosovo’s UNESCO membership, Tanaskovic said. UNESCO posted on its website that Serbia has been granted membership in the Executive Council of the organization as part of Group II together with Slovenia, Lithuania and Russia. The Executive Council is UNESCO governing body, which means that Serbia will be actively participating in the decision-making in all sectors of actions of the specialized UN agency in the period between two General Conferences, Tanaskovic said.

Nincic: Belgrade remains committed to the dialogue with Pristina (Tanjug)

Belgrade remains committed to the dialogue with Pristina and it will give its maximum for the dialogue to succeed, the State Secretary in the Serbian Foreign Ministry Roksanda Nincic said.

Opening the conference dubbed “Challenges of the Serbian Foreign Policy”, she said that development of relations with the EU and EU accession is the first priority in the Serbian foreign policy, but pointed out that this path is not easy considering the tighter conditions and hindered dialogue with Pristina. “So far, agreement on numerous issues has been reached within the dialogue. However, Pristina has tried to make the dialogue pointless by trying to acquire UNESCO membership, but it failed whereby the dialogue, as a basis for resolving this issue and similar ones, has been reaffirmed,” she said. Ninic voiced expectation that the negotiating Chapters 35 and 32 will be opened first, and soon afterwards, Chapters 23 and 24. Speaking about the harmonization of Serbia’s foreign and security policy with that of the EU, she noted that this percentage is now around 65 percent, recalling that Serbia has committed to a gradual but not complete harmonization that it will achieve once it becomes an EU member. “The different stand on Russia in relation to the EU stand we do not see as a problem,” Nincic said, adding that Serbia in principle opposes the policy of sanctions since, as she put it, Serbia has been assured over the past decades that nothing is achieved with sanctions, on the contrary – circumstances only become worse.

Drecun: Pointless to discuss normalization process without ZSO (Tanjug)

As long as the Community of Serb Municipalities (ZSO) is not formed, it is pointless to discuss the resumption of the process of normalization of relations, said the Chairman of the parliamentary Committee for Kosovo and Metohija Milovan Drecun. He told journalists at the Serbian parliament that Pristina is refusing, with deliberate obstructions, its formation and distorting the essence of the agreement. “Belgrade has done its part of the job, Pristina hasn’t,” said Drecun, noting that Brussels needs to take Pristina to the path of rational political behavior.

Popov: EU on the move following suspension of Brussels agreement (Beta)

The Director of the Centre for Regionalism Aleksandar Popov has stated that the EU is on the move following the decision of the Kosovo Constitutional Court to suspend the agreement on the Community of Serb Municipalities (ZSO). He opines that the EU should react more strongly to the disrespect of the Brussels agreement. “For the time being, this stronger reaction has not occurred, and this is not good because it thus destroys the credibility of the EU,” Popov told Beta. He says that two prime ministers signed in Brussels the agreement and assumed the obligation to implement it, but the Kosovo authorities are now conducting an obstruction. Popov says that Brussels, unfortunately, is now occupied with internal problems regarding the refugee crisis and the discord among the member states that has, as he put it, “stripped to the bone all weaknesses and problems within the EU”. He recalls that the Serbian Constitutional Court passed decisions on some items of the Brussels agreement and on the agreement as a whole, but not at the request of the authorities, and that it declared itself unauthorized, since at issue is a political document and not a legal one.

REGIONAL PRESS

Vucic: Serbia donates 5 million EUR for Srebrenica (Klix.ba/Nezavisne)

Serbian Prime Minister Aleksandar Vucic said in Srebrenica that his government would donate 5 million EUR to this town. Serbia will on Monday transfer EUR 2 million to the municipality of Srebrenica for development of infrastructure, and has earmarked another EUR 3 million for future joint projects, Vucic said on Wednesday. Addressing an investment-development conference titled “Srebrenica 2015”, Vucic described this donation as an investment in the future. “Serbia looks to the future and wants the best possible relations with Bosniaks – to build up the best future, to spend the next hundred years in peace, to ensure that we all live better. This is our small contribution to the shared future,” Vucic said. He added that in 2015, Serbia was “saving” and achieved good results and would like to set up a joint team with Republika Srpska and Bosnia and Herzegovina that would work on important projects.

B&H insists on right to access to international waters (Oslobodjenje/Hina)

B&H will demand that Croatia ensure access to international waters for its vessels, Transport and Communications Minister Slavko Matanovic told the Oslobodjenje daily in an. “Croatia actually took the maritime borderlines from the former Yugoslavia, ignoring the fact that our country too has access to the sea and that it is entitled to have access to international waters under conventions,” Matanovic said. He explained that under the present circumstances vessels cannot sail directly into Neum because they first have to enter Croatia’s internal waters, go to the port of Ploce and then are escorted to the B&H coastal town. Matanovic said that the two countries had agreed to establish a commission this year to deal with outstanding maritime issues, but that the Croatian government had not named its members and the commission never started work. Matanovic said that Croatia’s plan to build a bridge between the mainland and the Peljesac peninsula, which would bypass the Bosnian stretch of the coastline, was questionable because the bridge would only make it more difficult for Bosnian vessels to reach international waters. “The bridge would become Croatia’s maritime property and Croatia would have control of both that property and what’s underneath it,” the minister said. The authorities in B&H do not have a common view on the construction of the Peljesac Bridge. The Croat members of the present state-level government do not dispute Croatia’s right to connect its south, which is cut off at Neum, with the rest of the country.

Croatia protests against Slovenia’s fence on its territory (Hina)

The Croatian Ministry of Foreign and European Affairs on Wednesday strongly protested with the charge d’affaires at the Slovenian Embassy in Croatia after Slovenian authorities, which have been putting a barbed wire fence alone the country’s border with Croatia to control the migrant influx, put the fence on a part of Croatian territory. “Slovenia has been requested to remove the fence in the shortest time possible,” the ministry said in a statement. Official Slovenian sources too describe the area in question as belonging to the Republic of Croatia, the ministry said. The Croatian police earlier in the day warned that the fence the Slovenian police were putting along the border with Croatia to control the migrant influx near the border crossing of Harmica was on Croatia’s territory and that it would have to be removed from there. The part of the fence encroaching on Croatia’s territory is in the area of responsibility of the Zagreb Police Precinct and Zagreb police chief Goran Burusic this afternoon informed the Slovenian police of Croatia’s position. After the negotiations between Burusic and Slovenian officials, Croatia withdrew riot police from the area after having reportedly sent them there to remove the fence. According to media reports, the situation at the border was tense throughout the day as Slovenia also deployed some 50 riot police along its part of the border. A State Secretary at the Slovenian Ministry of the Interior, Bostjan Sefic, said that Croatia had been informed of Slovenia’s plan to put a fence on parts of its border and that the fence was on Slovenia’s side of the border and not on Croatia’s as claimed by Croatian authorities. The barriers are being put exclusively on Slovenian territory and they do not prejudge the borderline, the Slovenian government’s public relations office said in a statement.

INTERNATIONAL PRESS

Kosovo Says US Firm Will Build Power Plant (BIRN, by Petrit Collaku, 12 November 2015)

The Ministry of Development on Tuesday claimed it had reached an agreement with the US company Contour Global to build the new Kosovo e Re power plant. Kosovo’s government says it has reached an agreement with the World Bank and the company Contour Global to build a new power plant and expects to sign the contract soon. During his visit to the US, Blerand Stavileci, Minister of Economic Development, said he had reached an agreement with Contour Global after negotiations that began in April. Successful negotiations with Contour Global will pave the way for the signing of a contract with the company for the Kosova e Re – New Kosovo – power plant, a press release from the ministry said. No other details of the agreement are yet known. The role of the World Bank in the agreement is related to a loan, but it remains unclear how much the bank will invest in the project. Kosovo’s government stated earlier that Contour Global had proposed to invest a third of the cash in the project while the rest will come from international financial institutions and other lenders. The government plans to construct two plants generating 300 MW each, and the price for the construction of each is expected to reach up to 1.4 billion euro. The Kosovo delegation will continue to stay in the US until the end of the week. The government approved a single bid in the tender to construct the Kosova e Re plant on April 10 and said Contour Global was the preferred bidder. Civil society groups criticised the use of this procedure for the tender, accepting one offer only, saying it violated public procurement law, which demands at least two responsible bidders. The Kosovo Civil Society Consortium for Sustainable Development, KOSID, also criticised the government for lack of transparency and information on this project. “Negotiating 1.4 billion euro from the citizens of Kosovo without the approval of the Kosovo Assembly and the lack of transparency over such great sums represents a serious threat to the credibility and legitimacy of the process,” the organisation said. The organization raised questions about the investment conditions and about who will finance the plant’s construction. KOSID said that according to the World Bank, the price of electricity after the construction of the Kosova e Re plant will rise by about 300 per cent. “That would be unbearable for the citizens of Kosovo who even today face an enormous burden with electricity price bills,” KOSID said.

Serbia will be able to raise pension, wages in 2016, PM says (Reuters, 11 November 2015)

BELGRADE – Serbian Prime Minister Aleksandar Vucic said on Wednesday his government has created room for increases in pensions and the wages of doctors, teachers, police and military.

The increase, which had been agreed with the International Monetary Fund, will take effect as of January 2016, Vucic said. The government cut pensions and public-sector salaries in October of last year to secure a three-year, 1.2 billion-euro agreement with the IMF. All pensions will be increased by 1.25 percent and teachers, doctors, police and military will get a wage increase of 2 to 4 percent. Vucic said. Teachers in elementary and high schools will get a one-off payment of 7,000 dinars ($62.46) by the end of the year. Serbia’s general government deficit is forecast at 4.1 percent of GDP in 2015, well below the target of 5.9 percent. The smaller-than-planned deficit enabled the wage and pension increase, Vucic said. “The increase could be higher next year if the growth continues,” Vucic said. The IMF completed a third review of the three-year loan deal with Serbia on Tuesday. It said then fiscal improvements and planned increases in fuel excises would make pension and wage increases possible. It also raised its forecast for 2015 gross domestic product growth to 0.75 percent and projected 2016 growth of 1.75 percent. In the loan agreement with the IMF, Serbia committed to cut down its public sector, which employs 500,000 people. They include administrators, doctors, police, and teachers, among other groups. Over the next two years it will have to lay off around 30,000 people. Another 10,000 will retire. ($1 = 112.0700 Serbian dinars) (Reporting by Aleksandar Vasovic and Ivana Sekularac, editing by Larry King)

Serb Central Bank Holds Benchmark Rate With Focus on Fed, ECB (Bloomberg, by Gordana Filipovic, 12 November 2015)

Serbia kept borrowing costs unchanged, holding fire after surprising economists with three consecutive cuts as policy makers brace for the impact of higher U.S. interest rates. The National Bank of Serbia kept its one-week repurchase rate at 4.5 percent on Thursday after reducing it by a combined 1.5 percentage points between August and October, according to a statement on its website. Fifteen of 23 economists surveyed by Bloomberg forecast no change, four predicted a quarter-point cut and four saw a half-point reduction. A U.S. Fed “interest rate increase could adversely affect liquidity in international financial markets and capital flows to emerging markets,” the bank said in the statement. Inflation will “temporarily return to target range” at the start of 2016 and should stabilize by mid-year, it said. The bank cut its key policy rate two days after an International Monetary Fund mission agreed to make an additional 89.6 million euros ($96 million) in financing available to Prime Minister Aleksandar Vucic’s government. The central bank is trying to spur growth after three recessions since 2009, cutting interest rates by a cumulative 350 basis points before Thursday’s decision to lift inflation that has languished below its target range since February 2014. The dinar weakened 0.2 percent to 120.63 against the euro at 12:03 p.m. in Belgrade, according to data compiled by Bloomberg. The yield on Serbia’s dollar bonds maturing in 2021 slid four basis points to 4.565 percent.

External Risks

While the “recent monetary easing is appropriate and should support private sector growth,” Serbia also “faces continued external risks, notably from rising global interest rates, the slowdown in emerging markets, and the potential intensification of the refugee crisis,” the IMF said in a statement as its mission. Inflation has run below the bank’s target range of 2.5 percent to 5.5 percent since February 2014, as cheap global crude oil prices and weak domestic demand — the result of public wage and pension cuts — tame price growth. Keeping borrowing costs on hold would help avoid capital outflow, as “risks related to an interest-rate increase by the Fed are growing, and once they raise rates, there will be some impact on debt markets,” Ljiljana Grubic, an analyst at Raiffeisenbank in Belgrade, said by phone before the rate decision. It should also take into account ECB monetary stimulus and look at eastern Europe, where policy easing seems to have come to a halt in some countries, she said. The central bank has repeatedly said that lowering rates and mandatory reserves, should translate into cheaper commercial loan costs and increased credit activity, which it sees as key to reviving growth. Banks have remained reluctant to increase lending until the government comes up with solutions to resolve non-performing credit portfolios, which account for nearly a quarter of their loan portfolios.

Macedonia Approves Government That Includes Opposition (RFE/RL/AFP/AP, 12 November 2015)

Macedonia’s parliament has approved a cabinet reshuffle that includes members of the left-wing opposition in the government, part of a Western-brokered deal that ends a months-long political crisis. The new government, which was approved by parliament on November 11, includes Social Democrat Oliver Spasovski as interior minister and gives the Labor Ministry portfolio to the opposition. The Social Democrats will also be allowed to appoint three deputy ministers, including posts in the Agriculture and Finance ministries. The agreement bringing the opposition into the government was reached in July following mediation by the EU and the United States.

The deal will also see Prime Minister Nikola Gruevski of the ruling VMRO-DPMNE party resigning by mid-January and early parliamentary elections held on April 24. The agreement came following months of political turmoil in which Social Democrat leader Zoran Zaev claimed Gruevski’s government had illegally wiretapped 20,000 people, including police, judges, religious leaders, journalists, and foreign diplomats. Gruevski denied the charges and blamed foreign spies for conducting the wiretapping. The government also filed charges against Zaev and accused him of spying and trying to destabilize Macedonia.

* * *

Media summaries are produced for the internal use of the United Nations Office in Belgrade, UNMIK and UNHQ. The contents do not represent anything other than a selection of articles likely to be of interest to a United Nations readership.