Serbia Faces Decline Without Kosovo Solution, Report Warns

Serbia faces a bleak economic and demographic future if it fails to resolve the Kosovo conflict and does not join the EU, a new study by the Open Society Foundation in Serbia has warned.

Implementation of the Brussels Agreement on normalising relations would ensure far lower demographic and economic losses for Serbia than the scenario of not resolving relations, it adds - noting also that a widely mooted territorial swap would benefit Serbia to the tune of abut 90 million euros a year.

"Due to the improved economical climate and stabilisation of the political situation, the country's credit rating would rise, providing easier access to financial capital," the study said, stating that Serbia's foreign debt would drop from an estimated 24 billion euros in 2017 to 14.8 billion by 2030.

According to the report, "Economic, Demographic and Social Effects of Different Scenarios of Normalised Relations Between Belgrade and Pristina", Serbia faces worrying demographic problems, with the population potentially dropping dramatically by 2060.

If relations with Kosovo were normalised, it said, Serbia's population by that year would be around 5.57 million, compared to only 3.96 million if a "status quo scenario" is realised.

The status quo assumes that Belgrade and Pristina will not normalise relations, thus preventing Serbia from closing Chapter 35 in its EU negotiations, and so not becoming a member of the European club.

"Projected low growth rate of 1.9 per cent ... combined with the growth of all forms of consumption, inevitably leads to a growth of inflation and depreciation of the dinar [national currency]," the study said.

It added that this scenario would not be sustainable in the long term, and would lead to a "dramatic...