EU prepares Serbia reward package as Vučić calls snap elections

The European Commission is drafting a package of incentives for Serbia after Belgrade's parliament voted last Thursday to scale back judicial legislation that the Venice Commission and Brussels had warned would weaken judicial independence and stall corruption investigations. The move marks a tentative reset in relations that have deteriorated sharply over the past two years, but the timetable has been upended by President Aleksandar Vučić's weekend announcement that he will resign and call snap parliamentary and presidential elections.

The laws that triggered the crisis

The contested legislation, adopted late last year, would have given the executive greater control over the appointment and dismissal of judges and prosecutors, including those handling organised crime and corruption cases. The Venice Commission, the Council of Europe's top legal advisory body, issued a scathing opinion in December stating the laws would have a "chilling effect" on democratic institutions and could see specialised prosecutors removed from their posts. The European Commission echoed those warnings, threatening to withhold more than €1.5 billion in pre-accession funds conditional on rule-of-law compliance.

Under sustained pressure, the Serbian parliament voted on 26 June to amend the most contentious provisions. Danijel Apostolović, Serbia's ambassador to the EU and chief negotiator, told reporters in Brussels that the revised laws are now "fully aligned with the recommendations of the Venice Commission." That claim will be tested when the Commission publishes its formal assessment, expected before the summer recess.

A reward package takes shape

Four officials involved in the drafting told POLITICO that the Commission is preparing concrete steps to "incentivise Belgrade to continue reforms and avoid it reneging on commitments." The thinking, as one official put it, is that "there is a general feeling we shouldn't 'lose' Serbia completely." Serbia has been an official candidate since 2012 but has opened only two of the six negotiating clusters that structure the accession process. The third cluster, covering competitiveness, economic growth, industrial policy and alignment with the EU customs union, is seen in Brussels as the least politically sensitive and the most plausible next step.

The financial stakes are considerable. The EU is Serbia's largest donor, providing €586 million in non-repayable grants between 2021 and 2024 alone, with a further €1.5 billion earmarked but conditional on reform progress. Serbian government figures cite more than €7 billion in total EU funds and investments since 2000. Opening cluster three would unlock technical assistance and deeper regulatory alignment, though it stops well short of membership.

Vučić's election gamble

The Commission's plans assumed a stable political backdrop. That evaporated on Saturday when Vučić told a Serbian Progressive Party rally in Belgrade: "These are my last days and weeks as the republic's president. After that, I will resign." His second and final presidential term was not due to expire until 2027. By stepping down early, he triggers presidential and parliamentary elections within 60 to 90 days. Vučić is widely expected to run for prime minister, a post he held from 2014 to 2017, which would allow him to retain executive power while formally vacating the presidency.

The move comes after months of student-led protests and public anger over corruption allegations linked to the collapse of a railway station canopy in Novi Sad last November that killed 15 people. Opposition parties have demanded a transitional government to oversee fair elections; Vučić has rejected that. Commission spokesperson Paula Pinho told journalists on Monday that "it is not clear who will be … the candidates for the future elections," a diplomatic way of signalling Brussels is watching the electoral framework closely.

Scepticism in the capitals

Not everyone in Brussels shares the Commission's enthusiasm. Diplomats from two member states that have historically taken a hard line on Serbian democratic backsliding warned that opening a new cluster remains unlikely. "Going back to square one by undoing the damage you've done is the bare minimum; it can't be enough to merit a reward," one said. The Commission has recommended opening accession talks for five consecutive years, but unanimous agreement in the Council has been blocked by concerns over rule of law, media freedom, and Serbia's refusal to align with EU sanctions on Russia.

That last point remains a structural obstacle. Serbia has not imposed sanctions on Moscow since the full-scale invasion of Ukraine, citing energy dependence and historical ties. While Belgrade votes in line with the EU at the UN General Assembly, its foreign policy alignment score remains among the lowest of any candidate country. The Commission's draft reward package does not address this directly, but officials say progress on cluster three would require "credible steps" on foreign policy convergence.

The Venice Commission factor

The Venice Commission's role has been pivotal. Its December opinion provided the legal benchmark that both the Commission and the Serbian parliament used to measure the amendments. That gives Brussels a degree of cover: any reward can be framed as a response to an independent expert assessment rather than political bargaining. But the Commission's own enlargement methodology, revised in 2020, insists that fundamental rights and rule-of-law chapters, clusters one and two, must be opened and provisionally closed before others advance. Cluster three is technically an exception, but the precedent matters.

Apostolović argued that opening cluster three would "mark a turning point in Serbia's accession process and finally allow us to break the vicious circle in which we have been trapped for years." That circle, reform stalls, funds frozen, trust erodes, reform stalls, has defined the relationship since the 2020-2022 period when Serbia was downgraded in Freedom House's Nations in Transit report from a transitional government to a hybrid regime.

Money on the table

The financial architecture is already in place. The Instrument for Pre-Accession Assistance (IPA III) allocates €14.2 billion across the region for 2021-2027, with Serbia the largest single beneficiary. Of the €1.5 billion in conditional funding, roughly €800 million is tied to rule-of-law benchmarks and the remainder to green transition, digitalisation and private sector development. The Commission can release tranches once the Serbian government meets agreed milestones, verified by independent monitoring. That mechanism worked in 2023 when €200 million was released after Serbia adopted a new anti-corruption strategy, only for the strategy's implementation to stall.

This time, the Commission wants "irreversible" legislative changes backed by institutional practice. That means not just laws on paper but functioning prosecutorial independence, merit-based judicial appointments, and a track record of high-level corruption convictions. The Venice Commission will be asked to monitor implementation for at least 12 months before any cluster opening is formalised.

What the election changes

The snap election introduces two complications. First, any cluster opening requires a Council decision by unanimity. With a caretaker government in Belgrade and an uncertain electoral outcome, member states are unlikely to vote before a new parliament is constituted and its reform credentials assessed. Second, the election campaign itself will test the very institutions the revised laws are meant to protect. Opposition access to media, fairness of the electoral administration, and the role of the judiciary in adjudicating disputes will be immediate indicators of whether the legislative changes have practical effect.

Vučić's SNS party dominates the political landscape, controlling parliament, most local governments and the bulk of national media. Polls suggest it would win a plurality but possibly lose its absolute majority, forcing coalition talks. That could either moderate policy or produce paralysis. The Commission's draft reward package includes a clause that any progress is conditional on "continued democratic conduct of the electoral process."