The Serbian and Russian presidents have reached a long-term gas supply agreement. It will enable Serbia to import cheap gas in the next three years. So, what does it mean to the economy of the Balkan country, and how will the good relations with Russia affect the county's EU integration? Serbia will certainly have enough gas for the winter at one tenth of its cost in EU countries, Mr Vucic said. In the meantime, Serbia is facing constant pressure from both the East and the West, with Sergei Lavrov paying a visit on 7 June, and Olaf Scholz on 10 June.

Serbia can heat with cheap gas

Serbia can buy Russian gas at a discounted price in the next 3 years, according to an agreement reached between Serbian President Aleksandar Vucic and Russian President Vladimir Putin over the phone. The two leaders agreed that gas supply to the Balkan country will remain continuous in the future, the Serbian president said following their discussion.

„The price of natural gas will be calculated using a certain formula, which means it cannot exceed $408 per 1 thousand cubic metres, but we may as well be able to purchase it for $310. This price applies for a consumption of 2.2bn cubic metres, while the price of an additional 800 million cubic metres – which reflects the growth in our consumption in the recent period – still remains a question.”

Mr Vucic explained.

Serbia pays tenth of the price available for Europe

After the two leaders reached an agreement, the Serbian government sent a written note to Gazprom CEO Alexey Miller, proposing to hammer out the details in the coming days. Signing the document is urgent for Belgrade, as the current gas contract expires on 31 May.

Photo: President of Serbia

„If we do everything we agreed upon with President Putin, we will have a calm winter in terms of gas supplies. Only after the negotiations with Gazprom are over and the quantities are defined will we be able to tell the average price Serbia will need to pay for one cubic metre of natural gas.

The current price would be one third of the market price, going down to one tenth of what the rest of Europe will pay in the winter.”

the Serbian president told the press.

In light of its economic development and industrial expansion which boost its consumption, Serbia needs more gas than before, Mr Vucic told the Russian president. The two heads of state also discussed the extension of storage capacities in the country. As it is known, Serbia does not have properly sized gas storage facilities at the moment, so it stores a portion of its purchased gas supplies in Hungary. This agreement between Mr Vucic and Hungarian PM Orban was reached in Novi Sad recently.

Photo: Facebook

Serbia is interested in peace

During their phone conversation Aleksandar Vucic told President Putin that Serbia’s interest was putting a swift end to the war and reaching peace in Ukraine as soon as possible. In response, Vladimir Putin stressed that a contract was already on the negotiating table between Moscow, Kyiv and the Western powers, adding that he shared its details with Serbia’s president. Mr Vucic, however, told the Serbian press that this was none of his business, adding that he could not disclose any details shared by Mr Putin regarding the contract.

„I hope that there will be peace. We had a very fair and good conversation,”

the Serbian president said, evaluating the talks.

The Kremlin also issued a statement after the phone discussion, according to which the two heads of state mainly discussed gas supplies to Serbia, and agreed that they both intended to reinforce the strategic partnership between Russia and Serbia. The Kreml added that the two leaders also discussed the situation in Ukraine and in Kosovo.

Serbia pursues independent politics

According to experts, political pressure towards Belgrade may intensify after it held talks with Russia, with President Vucic also expecting the same. This has been a daily experience for Serbia since the war began, Mr Vucic said, as every political actor would like to tell us how to lead Serbia. The head of state noted ironically that almost everyone knows this better than he does.

Photo: Facebook

„For the time being, I don’t know how long we can maintain our autonomous, sovereign and independent policy. The last 90 days have not been easy. Over the past three months, we have stood by the position we took at the beginning of the war in Ukraine,”

Mr Vucic said.

According to Belgrade, international pressure will mainly focus on the issue of Kosovo.

Western and Eastern leaders to visit Belgrade

Sunday’s phone call came after a wait of several days. Earlier, the Serbian president announced that he would exchange views with the Russian head of state last Wednesday, but shortly afterwards the Kremlin said that having a discussion was not on Vladimir Putin’s agenda. The conversation finally happened on Sunday, and Belgrade has sealed a gas contract that is unique in Europe and will secure the country’s supplies for the next three years.

Photo: President of Serbia

Some analysts, however, believe that this agreement could trigger further political difficulties for Aleksandar Vucic. Brussels does not take kindly to the fact that while Serbia is an EU candidate country, it also enjoys excellent relations with Russia. EU leaders say it is impossible to remain neutral while the war in Ukraine continues.

As a result of political pressure, the Serbian leadership is facing two very important visits. On 10 June, the German Chancellor will visit Belgrade as part of his Balkan tour, in addition to Pristina, Skopje and Sarajevo. According to an article published by the Croatian Jutarnji news outlet, Olaf Scholz is about to discuss relations with Russia with Mr Vucic. Some in Western European believe that Serbia’s failure to coordinate its foreign and security policy with the EU could draw its progression towards the bloc to a complete halt.

Three days ahead of Mr Scholz’s arrival, one of the Russia’s most influential politicians – Foreign Minister Sergei Lavrov – will also visit the Serbian capital. Mr Lavroc will likely arrive with Mr Putin’s additional messages.

If the head of Russian diplomacy wants to visit a country, the initiation cannot be refused, said Ognjen Pribicevic before the meeting. According to the former Serbian ambassador to Germany, President Vucic cannot reject Mr Lavrov’s arrival, even if the EU and Germany will certainly disagree.

Photo: President of Serbia

So far Serbia has not imposed sanctions on Russia and it supported Ukraine’s territorial integrity. Thanks to this approach, the country has secured its gas supply for the upcoming winter. The next task facing Serbia’s leadership is to cope with pressure from its European partners, who are opposed to this type of cordial Russian-Serbian relationship. According to Mr Pribicevic, FM Lavrov’s visit will further increase pressure from the West.

Pro-European government is needed

Serbia held parliamentary elections on 3 April, but a new government has not yet been formed. For the moment, there is complete political uncertainty about who will lead the country. Opinions are divided even within the Serbian Progressive Party itself, but analysts say that one man will decide everything. He is the party leader and the country’s president-elect, who will take the oath of office on Tuesday before the Republic’s MPs. However, in recent days, many of Aleksandar Vucic’s party colleagues have expressed their opinions on what kind of policy the country should pursue in the next period.

Photo: Serbian government

According to Zorana Mihajlovic, a minister in the current government, the primary goal of the next cabinet should be full EU membership.

„There is no dilemma, Serbia must do everything to achieve this goal,” the politician said.

According to Vladimir Dukanovic, a close associate of Serbia’s head of state, imposing sanctions against Russia would obviously open all doors to the West but, as he said, other concepts – such as morality and honour – also happen to be at play.