Serbian EU entry talks pose challenging path with Kosovo key

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BRUSSELS -- The European Union has begun entry talks with Serbia, demanding that the country at the center of the continent's bloodiest conflicts since World War II mend ties with Kosovo and improve norms on justice and civil liberties.

The Balkan state of 7.2 million people wants to be the third former Yugoslav republic in the 28-member EU, with the goal of finishing 35 negotiating areas, or chapters, by 2018 and joining by 2020. Neighboring Croatia, which entered the EU in July 2013, took eight years.

"Starting negotiations means entering into a very demanding phase," said EU Enlargement Commissioner Stefan Fule at a Brussels briefing last week with Serbia's two top leaders. "Hard work will be needed and many challenges lie ahead."

EU membership would solidify Serbia's effort to overcome the isolation triggered by the collapse of Yugoslavia under strongman Slobodan Milosevic. It also had to drop resistance to EU demands to give up suspected war criminals, renounce claims on the former province of Kosovo and bring its courts, economy and approach to personal freedoms in line with EU norms.

"Difficulties are ahead of us, but we are ready," Serbian Deputy Prime Minister Aleksandar Vucic said at the news conference Tuesday. "I'm convinced we can do it. We can do everything by 2018. Then it will be up to you gentlemen, up to the climate in Europe, whether you are ready to admit Serbia by 2020."

Serbia is struggling to emerge from the effects of two recessions since 2009. Membership may help lift living standards, lure more foreign investment and create jobs in a country where almost a quarter of the workforce is unemployed.

The economy will grow 1.5 percent this year, according to the central bank. The government has stepped up plans to sell state companies, consolidate the deficit by 2016 and renew talks with the International Monetary Fund, which will send a mission to Belgrade on Feb. 26.

Investors have responded to the EU drive by pushing down the yield on the 2021 dollar bond to seven-month lows, according to data compiled by Bloomberg.

While other ex-communist states that joined the EU have seen living standards surge since membership, Serbia has languished at about a third of the EU average over the last decade. Foreign direct investment, which totaled $24 billion from 1994 to 2012, is less than half of what neighboring Bulgaria, the EU's poorest member, lured in the same period.

Last week's press conference was dominated by Kosovo and will remain a key measuring stick for progress. The North Atlantic Treaty Organization pushed Serb troops out Kosovo, considered a religious and cultural heartland by many Serbs, 15 years ago, leading to a 2008 declaration of independence that Serbia has never recognized. Serbia was also at the center of the 1990s Balkan wars that killed 140,000 people, displaced 4 million more and eventually split the federation into seven separate entities, including Kosovo.

Among other tasks, the country must overhaul a court system in which cases sometimes take as long as 20 years, compared with the EU average of eight months, Serb EU chief negotiator Tanja Miscevic said last week.

Serbia ranked 95th out of 178 countries according to the 2014 Index of Economic Freedom compiled by the U.S.-based Heritage Foundation. Unlike all 28 EU states, it fell in the "mostly unfree" category, with "widespread" graft.

"The 2020 target copies the accession timeline of CEE countries, but obviously cannot be guaranteed," Otilia Dhand, an analyst at political risk evaluator Teneo Intelligence, said in an e-mail. "The most controversial chapter is the one on relations with Kosovo, which will be the first to be screened."

It must also tackle ultra-nationalists and organized crime, a group of whom ordered the 2003 assassination of then-Prime Minister Zoran Djindjic, a pro-Westerner who took a stand against the criminal underworld.

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