STORIES FROM LOCAL PRESS

• Nikolic very carefully monitoring election process (Tanjug)
• Zarif: Great efforts needed for ensuring conditions for free elections in north Kosovo (Tanjug)
• Vucic: I will be visiting Kosovo in the coming days (Tanjug)
• Entire government to visit Kosovo (Novosti)
• Mrkic expects positive EC report (Beta)
• Jankovic and Beyani: IDPs to also vote on 3 November (Tanjug)

STORIES FROM REGIONAL PRESS

• EU launches procedure to suspend IPA funds for B&H (Oslobodjenje)
• Finci: We alone blocked our European path (Fena)

RELEVANT ARTICLES FROM INTERNATIONAL MEDIA SOURCES

• Serbia tells state development fund to stop lending (Reuters)
• Serbia woos British firms with zero corporation tax offer (Management Today UK)
• Bosnian politicians have European salaries (World Bulletin)
• Bosnia’s Prijedor Urged to Allow Non-Serb Memorials (BIRN)
• Macedonia Opposition Slams Police Hunt For Council Boss (BIRN)

LOCAL PRESS

Nikolic very carefully monitoring election process (Tanjug)
Serbian President Tomislav Nikolic will address again the citizens who live in Kosovo and Metohija only once he is hundred-percent sure that they are enabled to elect democratically their representatives at the local elections, Nikolic’s advisor Stanislava Pak told Tanjug. “President Nikolic is monitoring very carefully the election process in Kosovo and Metohija and enabling the Serbs to form, in a fair and democratic manner, their stand on who they will choose to conduct the local self-government. The Serbs need to turn for the elections, because otherwise, the Albanians would be enabled to administer the Serb community. However, the question is whether the election process will be regular, whether the atmoshpere will be fair and democratic, and finally, there is also the question of the implementation of the Brussels agreement. For that reason, the Belgrade delegation is regularly in Brussels, fighting against various imputations, aimed at disabling the Serbs to vote while, at the same time blaming them for this. We will not allow that. President Nikolic is aware of the responsibility and trust that the citizens living in the province have in him and this is why he will address them again when he is certain that they will be enabled to elect democratically their representatives, who will represent their interests in the best possible way,“ said Pak.

Zarif: Great efforts needed for ensuring conditions for free elections in north Kosovo (Tanjug)
During the visit to northern Kosovo, UNMIK Head Farid Zarif has assessed there is plenty of room for optimism when it comes to the upcoming local elections in Kosovo. Zarif said it was necessary to respect the principles of tolerance and democracy. According to him, it is necessary to continue with the great efforts in order to ensure conditions for a free and fair process of the local elections in northern Kosovo, UNMIK said in a statement. He pointed out that all factors need to respect the opinion of others and to foster the spirit of democracy where each individual freely passes decisions. He warned there would be no tolerance for one single act of intimidation and coercion and that every non-democratic act would be condemned. The UNMIK Head voiced satisfaction with the fact that the leaders of all sides clearly assured him they were devoted to this, reads UNMIK’s statement. “All communities and their leaders in northern Kosovo must stay devoted to civilized behavior and to realize their goals in a peaceful and democratic manner,” said Zarif. He voiced assurance that Kosovo citizens would use their democratic right by actively taking part in the election process.

Vucic: I will be visiting Kosovo in the coming days (Tanjug)
Serbian First Deputy Prime Minister Aleksandar Vucic has stated in Leskovac that he will be visiting Kosovo and Metohija in coming days. He said that, when it comes to Kosovo and Metohija, the priority task is the formation of the Union of Serb Municipalities. That is why we need to take part in the elections, because we will have, for the first time, recognition of the entire world, including the West – formal and essential recognition of the Union of Serb Municipalities, said Vucic. He explained this was why the Serbian Government was calling the Serbs to turn out for the elections in Kosovo and Metohija slated for 3 November.

Entire government to visit Kosovo (Novosti)
The state leadership is planning to visit Kosovo and Metohija at the end of next week, and Gracanica will most probably be the first station within the election campaign. That was confirmed by Serbian Prime Minister Ivica Dacic, who said that the date of the visit has not been determined yet, but that 19 October was considered. Novosti learns that after the visit of the Head of the Office for Kosovo and Metohija Aleksandar Vulin, who was the first one “to break the ice” following’s Pristina’s ban for Serbian officials to travel to Kosovo, Serbian Minister of Agriculture Dragan Glamocic will be travelling to the province as early as tomorrow, who was given a green light to visit Klokot. All ministers in the Serbian Government have received guidelines to get involved maximally in the election campaign in Kosovo and Metohija and to be on the ground as much as possible. The Prime Minister underlined that all visits will be arranged between the Office for Kosovo and Metohija and EULEX, and that he doesn’t expect the Kosovo authorities to raise tensions before the 3 November elections with new bans. While Belgrade is heating the election campaign, a rally against the elections was held in Kosovska Mitrovica, in the organization of the Provisional Assembly of the Autonomous Province of Kosovo and Metohija. “We know what we will gain if we turn out and vote – departure from Kosovo or assimilation,” said member of “anti-election” headquarters Vladmir Rakic and called all citizens to go anywhere on 3 November but not to the polls, because this way they will support the Republic of Serbia. Publisher Yves Bataille addressed the protesters, calling citizens not to go to the polls because they will not bring them anything good. The Chair of the Serbian parliament Committee for Kosovo and Metohija Milovan Drecun tells Novosti that the prosperity of the Kosovo Serbs cannot be organized with protest walks but with participation in the elections and formation of the Union of Serb Municipalities.

Mrkic expects positive EC report (Beta)
Serbian Foreign Minister Ivan Mrkic says he expects the European Commission report on Serbia’s progress on the EU course to be positive. He assessed that there is no reason for the EU accession talks not to start in December. “Many signals indicate that the document will be positive,” Mrkic said after presentation of the Ministry’s report before the Parliamentary Committee of Foreign Affairs. Earlier at the session, Mrkic pointed out that diplomacy responded to tasks the Government set before it. The Minister reminded that Serbia’s foreign political priorities are to get closer to the EU, preserve territorial integrity and sovereignty of the country, maintain good relations with the regional states, particularly neighboring ones, as well as good relations with the most powerful countries in the world.

Jankovic and Beyani: IDPs to also vote on 3 November (Tanjug)
It is necessary to enable the practical possibility for the internally displaced persons (IDPs) to vote at the upcoming local elections in Kosovo and Metohija, Serbian Ombudsman Sasa Jankovic and the UN Special Rapporteur on the Human Rights of IDPs Chaloka Beyani jointly assessed in Belgrade. Jankovic pointed out that the key issue for freedom of elections is that nobody, especially not the representatives of any government, should be exerting pressure on the voters, his cabinet said in a release. He adds that, because of the known state-of-affairs in Kosovo and Metohija, he doesn’t have the ability of conducting on-site checks concerning complaints he is receiving and from offering efficient protection to citizens who turn to him for help. Jankovic appealed “to all the authorities in the territory of Kosovo and Metohija to ensure, respect and protect citizens’ right to elect their political representatives with their free will.”

REGIONAL PRESS

EU launches procedure to suspend IPA funds for B&H (Oslobodjenje)
The EU announced it would launch the procedure to suspend part of the EU funds for BIH, after representatives of seven B&H parties at the meeting with the EU Enlargement Commissioner Stefan Fule, failed to present any sort of joint proposal to implement the European Court of Human Rights ruling in the Sejdic-Finci case. So, if agreement is not reached urgently, IPA fund will be reduced by 54 percent. In practice, this means B&H will lose 47 million Euros. In a statement from Fule’s office, they say that, if in the next few days an agreement is reached, the suspension procedure could be halted. The statement also notes that, despite the recent failure, the European perspective for B&H still exists. However, the implementation of the Sejdic-Finci ruling is essential in order to eliminate discrimination against minorities and violation of international obligations. “B&H political leaders must find a solution without delay, in order to be prepared for the 2014 general elections. Yet another electoral cycle contrary to the European Convention on Protection of Human Rights would seriously damage the legitimacy and credibility of the electoral body in the future.” The European Commission will decide on a possible follow-up meeting soon, as well as on measures that could be undertaken if no agreement occurs.

Finci: We alone blocked our European path (Fena)
“It was not realistic to expect, after 45 months of failure to do anything, that we would reach the sought agreement in four and a half days,” Jakob Finci, one of the appellants in the European Court of Human Rights and president of the Jewish community in B&H, told Fena when asked to comment on the fact that no agreement was reached on implementing the Sejdic-Finci ruling at the meeting in Brussels. “With this we blocked our own European path ourselves, and the question is when we will unblock it,” said Finci, adding that he does not think Europe was only joking when it put forward all its ultimate, with the aim of realizing or implementing the decision. “Whether they had in mind that it means the abolition of all economic and financial relations with financial institutions on which, unfortunately, we really depend these days. Because this time, when you are suspended from the CoE, you are also suspended from cooperation with international financial institutions that simply aren’t able to financially help undemocratic countries. And with that they suspend you and you become an undemocratic country,” said Finci. “We need to sit at the table, to forget our personal interests and reckonings a bit because we didn’t accept what others proposed. We need to find a solution so that, even though B&H in the 21st century is approaching Europe, and not straying from Europe, and is to stand like a ‘black hole’ not just in the Balkans, but in this part of Europe, as the only country that has no relations with the EU, that has no perspective that one day it would enter that EU simply because it cannot respect basic human rights, and that is that all citizens of their country be treated equally. If this is something we can’t do, then we can’t even expect that the international community will treat us as an equal member in its ranks. Without that, we remain a ‘black hole.’ It seems that, through our leaders, we are seeking this ourselves,” said Finci.

INTERNATIONAL PRESS

Serbia tells state development fund to stop lending (Reuters, by Aleksandar Vasovic, 10 October 2013)
Serbia's economy ministry has asked the state-run Development Fund to stop lending after discovering that bad loans constituted almost half of its portfolio, it said on Thursday.
The ministry said in a statement the credit freeze should last until it has scrutinised the fund.
Serbia's new Finance Minister Lazar Krstic, a 28-year-old former McKinsey consultant brought in to reverse years of economic stagnation and growth in government debt, told the nation this week it needed to save 1.5 billion euros ($2 billion) by 2017 to avert default.
The ministry said the Development Fund, a state body that aids financing in domestic investments, has more than 40 percent of non-performing loans in its 217 billion dinars ($2.57 billion) portfolio.
"More than 40 percent of the loans have matured fully and have not been paid at all. Furthermore, another 20 percent have reached partial maturity and have delays in payments...," the ministry said.
It said the Fund had also issued guarantees worth more than 79 million euros to businesses that are not solvent.
The government plans to cut subsidies to as many as 179 loss-making state firms and trim the public sector, which employs more than 660,000 of Serbia's 7.3 million people, through job and wage cuts and a gradual reform of the pension system.
The International Monetary Fund said this week the government had taken the right step to tackle its economic troubles but warned that the 2013 deficit - including non-budgeted spending which Serbia accounts for differently - could reach 7.5 percent of gross domestic product (GDP), from the targeted 4.7 percent.
The IMF also cut Serbia's economic growth forecast for this year to 1.5 percent.
Belgrade lost a previous 1 billion euro ($1.35 billion) deal with the lender in 2012 over inflated spending and debt and hopes to start fresh talks with IMF in the first quarter of 2014. ($1 = 0.7395 euros) (Editing by Zoran Radosavljevic and Ruth Pitchford)

Serbia woos British firms with zero corporation tax offer (Management Today UK, by Elizabeth Anderson, 10 October 2013)
With the threat of bankruptcy hanging over its head, Serbia is offering tempting financial incentives to encourage foreign businesses to invest. But is it enough?
After spending much of the last few decades on the front line of politics, Serbia is now grappling with a new set of problems. The country’s budget deficit is swelling, a quarter of its people are unemployed and, according to deputy prime minister Aleksandar Vucic, Serbia is ‘virtually on the verge of bankruptcy.’
The country’s public debt ballooned from around 35% of GDP in 2009 to almost 60% last year and its budget deficit is around 7.5%.
To stave off an impending crisis, the cash-strapped country is hoping British businesses can help relieve the financial strain. In an attempt to woo foreign investors, companies which set up shop in Serbia will get a 10-year corporate tax break, providing they invest €9m (£7.8m) in the country and create at least 100 jobs.
In the heart of Belgrade, a factory is pumping out 1,900 cans a minute for the likes of Heineken, Coco-Cola and Pepsi. Ball Packaging is one of Serbia’s most successful foreign direct investment projects, investing €100m into its operations since coming to Serbia in 2004.
‘We came here because we need to be close to our customers, and being in the centre of everything saves on transport costs,’ says David Banjai, Ball Packaging’s plant manager. ‘The labour costs are also cheaper. A skilled person costs a lot less here than in Germany, for instance.’
Ball Packaging Europe, which is headquartered in Zurich and operates in 12 locations across Europe, produces around 1 billion cans a year. The business has been fairly recession-proof, having benefited from people opting to buy cheap cans from their local supermarket rather than go to the pub. Last year the firm’s exports from Serbia rose by around 40% on 2011.
‘When we first came here in 2004, I thought companies sexier than us would soon follow,’ Banjai says. ‘Why didn’t they come? Beats me. The only thing I can think of is that people haven’t made the effort to get to know the sorts of opportunities that are here. They think Serbia is a godforsaken black hole somewhere in the middle of the Balkans.’
Certainly Serbia has struggled to shake off memories of its troubled past. The seat of at least one world war and more recently in the 1990's, venue for some of the bloodiest and most divisive civil conflicts of the 20th century, the Balkans is historically the least politically stable area in the western world.
In a recent European Attractiveness Survey commissioned by EY, just 1% of investors picked Serbia as an attractive place to do business, although in reality the situation is more positive – Serbia scooped up 11% of all Central and Eastern Europe foreign investment projects in 2012. ‘This glaring mismatch suggests the country faces perception problems among foreign investors,’ the report concluded.
Despite Serbia’s troubled past, businesses are coming. Since 2000, the country has attracted nearly €25bn of inward foreign direct investment from companies including Microsoft, Telenor and Siemens. Its central location in south-east Europe means there is easy access to both the EU and Russia, and Serbia benefits from free trade agreements with both.
Entry into the EU is the Serbian government’s next priority; partly in the hope it will lure more firms to the country and partly to get access to all those centrally funded EU grants for areas of economic hardship. Accession negotiations between the European Council and Serbia will open in January next year, although the country isn’t expected to become a fully-fledged EU member before 2020.
‘Joining the EU means that your country holds up to certain standards. It gives a sense of security to people investing their capital here,’ says Vladimir Tomic, assistant director for FDI at SIEPA, Serbia’s investment promotion agency. ‘Serbia has struggled for years with perception problems, due to the civil wars in the 1990s and later the Kosovo problem. The EU gives you a stamp – certified country, safe to invest.’ Of course, EU membership will also give Serbia access to centrally-funded grants for economically deprived areas.
The country’s biggest ever industrial investment has come from Fiat. Since signing a joint venture with Serbia in 2008, the Italian carmaker has spent €1.2bn building a new plant in Kragujevac, a city on the outskirts of Belgrade, employing more than 3,000 people. Exports from the Fiat plant are a key driver of economic growth in the Balkan country, which emerged from recession in the first quarter of this year.
Aleksandra Rankovic, Fiat Serbia’s communications manager, praised the government’s support and tax and training incentives, but says he is concerned about the level of Serbia’s bureaucracy and the country’s infrastructure: ‘The roads and the railways need modernising to help us deliver products and make it easier for us to do business.’
But there are more pressing concerns for the government. Like other Balkan states, Serbia has suffered something of a ‘brain drain.’ With an unemployment rate of 24%, it has struggled to keep hold of graduates seeking better wages and opportunities abroad.
There are signs that things are picking up though. On the outskirts of the city centre, a group of 20-somethings are huddled round a chess board, taking time out between conference calls to the US. Microsoft’s development centre in Belgrade employs 150 developers working on services such as Bing and Office. When it was established in 2005, it was one of just four such centres in the world.
‘Ten years ago if you wanted a really good product to work on, you’d need to move abroad. Now we’re seeing more and more cool places to work in Serbia,’ says Djordje Nijemcevic, 31, a senior development engineer in the Bing team.
There are now 1,600 IT companies in Serbia, employing more than 14,000 people. For the first time ever, software exports will exceed frozen raspberries this year, despite Serbia being the world's largest raspberry exporter.
‘I worked in Germany for a year before coming back here to work for Microsoft,’ Nijemcevic adds. ‘In more developed countries, you’re just like one cog in a big machine. Here you have a chance to have some impact and to influence young folks and raise the bar of what Serbia can offer.’
So let's hope they can stave off that impending bankruptcy and keep the show on the road.

Bosnian politicians have European salaries (World Bulletin, 10 October 2013)
With salaries 40 percent higher than that of average citizens, Bosnian politicians are the only ones who can afford life according to European standards. The rest of the population can hardly afford to cover monthly costs of living.
Politicians in Bosnia and Herzegovina have the highest salaries among their colleagues in the region, and 40 percent higher than that of the average salary in the country.
Members of the state parliament in Bosnia are receiving between 2,500 and 3,500 euro a month. Statistically, 12.8 percent of the GDP goes into the public sector.
At the same time, according to available surveys, Bosnian families can hardly afford to cover costs of living. While average salary is around 450 Euro, the minimum monthly costs of living are around 750 euro.
With salaries high like these, Bosnian politicians are closer to the European standards, than regional. Just to compare - in Germany, parliament members salary is about 7,500 euro, in France around 5,514, and in Sweden about 6,700 euro.
At the same time, Serbian parliament members receive between 800 to 1,300 euro a month. However, on Monday Serbian government announced budget cuts that will affect public salaries in the first place.
With these new measures, salary of the Serbian president will be 1,202 euro. At the same time, member of the Bosnian Presidency – one of three members – receives 2,433 euro a month, and there are no plans for cutting.
Furthermore, prime minister in Serbia gets 1,508 euro, and with cuts it will be 1,350 euro. Prime minister of Bosnia gets 2,190 euro.
In Croatia, a country that became EU member this spring, parliament member’s salary ranges from 2,500 to 4,500 euro, in Macedonia from 1,000 to 4,500 euro, and in Montenegro 1,000 to 1,700 euro.
According to the Agency for Statistics, 547,300 people are registered as unemployed in Bosnia, which makes unemployment rate up to 44.5 percent, the highest rate in Europe.

Bosnia’s Prijedor Urged to Allow Non-Serb Memorials (BIRN, by Denis Dzidic, 11 October 2013)
Human rights campaigners urged the mayor of Prijedor in Bosnia’s Serb-dominated Republika Srpska to allow the building of memorials to Bosniaks and Croats killed during wartime.
The International Centre for Transitional Justice, ICTJ, a US-based rights group, sent an open letter to Prijedor mayor Marko Pavic, asking him to publicly acknowledge Bosniak and Croat victims of wartime atrocities in the town which currently only has memorials to Serbs killed in the 1990s conflict.
The ICTJ called on Pavic to initiate the building of a memorial to victims in the town and at the nearby Omarska wartime Bosnian Serb detention camp.
Refik Hodzic, communications director for the ICTJ, told BIRN that Prijedor was important because of the horrendous crimes committed there and the continuing ethnic discrimination by the Pavic and the city administration.
“The letter is a clear expression of the outrage of experts and human rights activists from around the world at the continuation of this unacceptable situation,” Hodzic said.
The recent discovery of a mass grave in the Tomasica mines near Prijedor, which could contain the remains of dozens of Bosniak and Bosnian Croat civilians, was the trigger for the attempt to show Pavic that “things have to change, victims must be acknowledged and memorialized as they deserve”, Hodzic explained.
Along with the ICTJ’s president David Tolbert, the signatories of the letter include the United Nations special rapporteur on torture, Juan Mendez, the executive director of the International Coalition of Sites of Conscience Elizabeth Silkes and other international human rights activists.
“The names of people from the list are a guarantee that this issue is not going away and mayor Pavic needs to understand that. The Prijedor victims are not alone, they have powerful friends across the globe and will win this struggle, rest assured,” said Hodzic.
According to data from the ICTJ, during the first year of the Bosnian war, more than 3,000 Bosniaks and Bosnian Croats from Prijedor in the north-west of the country were killed or disappeared. Twenty years later, however, the Bosnian Serb local authorities are still preventing the building of memorials to non-Serb victims in the city.
“In your role as mayor, you have so far refused to allow a memorial for these victims to be built in Prijedor and you, personally, have stopped an initiative to build a memorial at the site of the Omarska detention camp,” the letter alleges.
“Further, while serving in this public capacity, you have targeted victims’ families and survivors for organising public events and using the word ‘genocide’ to describe what they experienced,” it says.

Macedonia Opposition Slams Police Hunt For Council Boss (BIRN, by Sinisa Jakov Marusic, 11 October 2013)
The Macedonian opposition has accused the government of playing politics after police issued an arrest warrant for a council chief in Skopje’s central municipality over fraud claims.
The opposition Social Democrats, SDSM, accused the government of demanding the arrest of Miroslav Sipovic, the head of the opposition-led council in Skopje’s municipality of Centar, in an attempt to win back power there.
“You can arrest all of our councillors and thus gain a majority… and you can falsify the will of the people… but you will not succeed because we are elected by the people and work for their benefit,” said the opposition mayor of Centar, Andrej Zernovski.
Police said that Sipovic was the main suspect in a one-million-euro fraud case centred on a company called Masino Promet.
On Thursday, 12 people – most of whom have been board members at the company – were questioned by an investigative judge in Skopje after having been arrested the day before. Among them was Sipovic’s brother.
Police said they had issued an international arrest warrant for Sipovic, who is believed to be out of the country on a private visit.
Mayor Zernovski claimed that the arrest warrant for Sipovic was intended to threaten him and undermine his work.
Zernovski took office earlier this year and now runs what was previously a key bastion of the ruling VMRO DPMNE party of Prime Minister Nikola Gruevski. The opposition only has a slim majority over the ruling party on the Centar council.
Zernovski’s ongoing review of the municipality’s role in the grand state-sponsored revamp of the capital called 'Skopje 2014' for evidence of financial crime have set him on a collision course with the government, he said.
“The stopping of the megalomaniac project 'Skopje 2014' and the revision of all the projects and inconsistencies that were carried out by the previous [municipal] leadership is enough for them to do everything they can to oust us,” Zernovski said.
The ruling VMRO DPMNE however said that the opposition SDSM should trust the police's intelligence.
“SDSM’s attempt to amnesty Sipovic is an unjustifiable precedent. It is obvious that the [law inforcement] institutions have information that make Sipovic a suspect for the embezzlement of millions and only they, the institutions, are responsible for having the final say,” the ruling party said in a statement.