The upcoming political pension of Angela Merkel, who has been the Chancellor of the Federal Government of Germany for 15 years and the president of the most influential German political party CDU since 2002, has opened a big political gap at the European level, which is questionable. However, in 2016, Angela Merkel was proclaimed the “leader of the free world”. Her (second successor) to the position of party president, Armin Lache, has yet to show up in politics at the national and international levels. With Brexit, most of the burden thus falls on France and President Macron, within the old Franco-German partnership. Due to their size, both economic and population, without the cooperation of these two countries on important issues, there is no easy passage through European institutions and agreements at the supranational level.
The French, under the leadership of President Macron, have shown greater interest in the Western Balkans region than the previous French administration since the fall of Milosevic. France has little interest in the region – it is more economically linked to Central Europe (Germany and Austria) nor is there a significant number of citizens from this region (immigration centers to France are primarily the Maghreb and sub-Saharan Africa, countries that are former colonies) so this was surprise. France proposed a newly adopted change in the accession methodology and was against the opening of EU pre-accession negotiations with Northern Macedonia. Having in mind the strength of Macron’s party La Republique en Marche within the European Parliament, and the parliamentary group Renew Europe, it is not worse to see what the economic relations between Serbia and France look like.
Trade undeveloped, little investment
The total export from Serbia to France during 2020 amounted to around 480 million euros. It is interesting that exports to France were not affected by the corona crisis, as they are at a similar level in the previous few years, although total exports decreased by about 5%. Bearing in mind that the total export from Serbia amounted to 19.5 billion euros, France is not a particularly important market with only 2.5% of our exports. But bearing in mind that the total French imports during the previous year amounted to as much as 478 billion euros (total Serbian goods accounted for only 0.1% of total imports), it is clear to whom trade cooperation is more important, but also how much potential remains untapped.
Individually, the most important export products from Serbia are car tires, followed by frozen raspberries, cars, metal products, furniture and propulsion machines. Taken together, these six products account for almost half of total exports to France. Behind some of them there is actually only one factory (which clearly speaks of the strength of the Serbian economy): in the case of car tires, they mostly come from Michelin’s factory in Pirot, and cars from Fiat’s factory in Kragujevac.
At the same time, imports to Serbia from France amounted to just over 610 million euros, and almost half of the total imports are medical and pharmaceutical products, cars and industrial machines, while in fourth place are essential oils and perfumes.
Trade in services is not much more developed compared to trade in goods. During 2020, according to the data of the National Bank of Serbia, a service worth 152 million euros was exported from Serbia to France, while at the same time a service worth 200 million euros was imported. France thus ranked 14th on the list of countries in terms of exports of services from Serbia. In front of it are not only other large economies such as the United States or Germany, but also many smaller countries from our neighborhood, such as Bosnia and Herzegovina, Croatia or Slovenia.
France is not a particularly important source of foreign direct investment (FDI) coming to Serbia. Before the corona, in the period 2010-2019 from France, a total of 1.2 billion euros of FDI was recorded, compared to a total of 23 billion euros of FDI invested in Serbia in that period. During this period, France was among the most significant investors for only one year – in 2018, which is a consequence of the takeover of Nikola Tesla Airport by Vinci Airports SAS, and the payment of the concession fee.
Projects of importance – airport, waste incinerator and metro
Therefore, economic ties between Serbia and France are rather weak. However, they have recently been strengthened through several state infrastructure projects. In addition to the already mentioned concession of Nikola Tesla Airport, French companies are participating in the construction of two large projects in Belgrade: the construction of a garbage incinerator in Vinca and the recently announced construction of the subway. In both projects, French companies are part of a consortium with companies from other countries (in the case of the incinerator with a Japanese company, and in the case of the subway with a Chinese company). But state projects in Serbia have been taking place for decades in an environment where it is not clear where normal functioning ends and influence trade, nepotism or corruption begin, so these projects have also attracted a lot of negative comments from the profession. In the case of the incinerator, it is a question of environmental standards that will be used – primarily due to the fact that garbage will be used to create heat and electricity, instead of first going to waste separation and recycling, which would be more in line with European standards and “zero waste”orientations within the EU. The metro project has been criticized because of the route that does not follow the agglomeration of the population, but the first line that will start construction should cross the Makisko field. Both projects have attracted attention because of the high costs – solving the issue of waste disposal in Belgrade and metro traffic is important for Belgrade, but precisely because these projects will pay off for decades, it is important that they really solve these burning problems and keep costs under control.
Politics ahead of economics
According to this, most of France’s interest in the region lies in politics, not economics. According to recent opinion polls, French society is quite reluctant to further EU enlargement, which is probably one of the reasons for Macron’s insistence on “deepening integration” first between existing members and only then a new enlargement by accepting” poor relatives from the countryside”. The Corona crisis hit France hard, which also had a big drop in President Macron’s popularity, which began to earlier due to attempts to reform the pension system, which should reduce costs by increasing the number of years needed to retire. Bearing in mind that the next presidential elections in France are in April 2022, more precisely in a year, the question is whether Macron will manage to pass from the current unpopularity to the second round, where Marin Le Pen will most likely expect him again, or dissatisfaction due to the economic crisis and the way the state dealt with the pandemic, it managed to bring to the fore the candidates of the Republican or some other party. France’s current interest in the Balkans could therefore pass suddenly, just as it appeared, Talas reports.
