AGP Executive Report

Protest Crackdown: Tens of thousands of students and opponents of President Aleksandar Vučić rallied in Belgrade for early elections, but the day turned violent when smaller groups split off and clashed with riot police, throwing flares, rocks and bottles; police responded with pepper spray and stun measures as authorities blocked protesters’ return routes. Political Backdrop: The movement traces back to the 2024 Novi Sad rail-station roof disaster that killed 16 and sparked anticorruption anger, now reframed as a push to end Vučić’s 12-year rule. Energy Deal Drift: In parallel, Serbia’s NIS ownership talks remain in limbo as the U.S. granted MOL a two-week extension to June 6 to finalize negotiations over the sanctioned Russian stake. Food Security Diplomacy: The UAE and Serbia also moved to deepen cooperation under CEPA, focusing on sustainable agriculture and resilient food systems. Industry Pipeline: Serbia is advancing rail modernization planning for the Ruma–Šabac–Donja Borina line toward Bosnia, aiming to lift speeds and electrify.

NIS Deal Clock Reset: MOL says the U.S. OFAC has licensed it to keep negotiating the purchase of a majority stake in Serbia’s NIS until June 6, 2026, after earlier deadlines raised uncertainty; Serbia’s energy minister says Belgrade is still pushing for a long-term solution that protects national interests, while Vučić has warned talks are “not going well.” Energy Security Build-Out: Serbia is adding strategic oil storage at Smederevo—two new 20,000 m³ reservoirs (R21/R22) approved for construction, reinforcing reserves obligations. Financial Rules Catch Up: The National Bank of Serbia drafts EU-aligned amendments to the Law on Protection of Financial Services Users, expanding regulation for credit intermediaries and debt counseling. Mining Policy Roadmap: The ministry launches procurement to develop a 2026–2029 action plan under Serbia’s mineral strategy to 2040. Steel Pulse: Worldsteel reports April 2026 crude steel output down 1.9% year-on-year. Culture & Industry Buzz: Belgrade’s Beldocs festival opens with an international slate and industry forums, while Expo 2027 Belgrade construction ramps up with rising participation commitments.

NIS Deadline Drama: President Aleksandar Vučić says he’s “not optimistic” about a timely deal before the May 22 deadline for MOL to buy Russia’s 56% stake in NIS, Serbia’s sole refinery—though Washington may extend talks. EU Trade Friction: Bruegel warns Western Balkans firms face rising non-tariff barriers—border delays, regulatory divergence and compliance costs—even as EU tariffs largely fell. Free-Trade Push: Serbia and Ukraine have agreed to resume free-trade talks, with a joint statement signed in Belgrade; the goal is deeper trade and new regional production links. Energy Grid Reality Check: Renewables ambitions are being paired with a bigger focus on grid integration and system flexibility, as stakeholders debate how to keep supply secure. AI for Industry: CCIS and Orion Telekom launch work on a Serbian business language model using NVIDIA tech, aiming to speed digital transformation for local companies. Renewables Buildout: SANY Renewable Energy plans to start Alibunar wind parks construction in Serbia by end-June, targeting early-2028 electricity delivery. Politics on the Calendar: Vučić says elections will be held between late September and mid-November.

NIS Deadline Drama: President Vučić says he’s “not optimistic” about a timely deal before the May 22 deadline for MOL to buy a majority stake in Serbia’s NIS, after the US demanded divestment of Russian-owned shares tied to sanctions—though Washington may extend time. Serbia-Ukraine Trade Push: Serbia and Ukraine signed a statement to resume free-trade talks, with both sides aiming to conclude by end-2026 and boost cooperation in trade, energy and infrastructure. EU Forecasts: The European Commission expects Serbia growth of 2.8% in 2026 (3.9% in 2027), driven by public investment around EXPO 2027, while warning the fiscal deficit may rise to 3.2% this year. AI Factory Move: CCIS and Orion Telekom plan a Serbian business language model using NVIDIA tech, part of an EUR 800m “national AI factory” initiative. Energy & Industry Signals: Linglong plans to expand its Zrenjanin tyre plant over 70 hectares, targeting up to 800 new jobs.

Serbia–Ukraine Trade Push: Serbia and Ukraine signed a joint statement in Belgrade to resume negotiations on a free trade agreement, with talks also covering trade, investment, energy and infrastructure; a business forum brought together 45 representatives from 30 companies across sectors like agriculture, logistics, chemicals and metallurgy, while Serbia’s Q1 trade turnover hit $152.8m (with a $36.8m surplus). Economic Outlook: The European Commission forecasts Serbia growth at 2.8% in 2026 (and 3.9% in 2027), driven by public investment tied to EXPO 2027 and rising wages/pensions, while flagging a temporary 3.2% fiscal deficit and debt around 45% of GDP. AI Factory Move: CCIS and Orion Telekom plan a Serbian business language model using NVIDIA technology, aiming to boost competitiveness and digital transformation. Energy Projects: Japan’s support is expected to accelerate Serbia’s RHPP Bistrica timeline, with tender documentation steps targeted by end of month. Infrastructure Update: Vrnjacka Banja has launched new technical documentation for the National Water Polo Training Center to align with updated rules and fire-protection requirements.

Ukraine-Serbia Trade Talks: Zelenskyy confirmed a push to resume negotiations on a Serbia free trade zone, with Ukraine’s Deputy PM Taras Kachka set to work in Belgrade—while Serbia’s chamber chief says trade has already bounced back to pre-war 2021 levels. NIS Deadline Pressure: Vučić says talks with Hungary’s MOL over NIS are “not going well” ahead of an OFAC licence expiry on May 22, urging Washington to understand Serbia’s position. Energy Finance Shift: A Southeast Europe panel warned renewables financing has been reshaped by market instability—moving from stable tariffs to auctions, merchant risk, negative prices and CBAM impacts. Western Balkans EU Path: Five EU states back “step-by-step” sector access for candidates to the single market, aiming to keep reforms moving and reduce external influence. Regional Security Lens: A new analysis frames defence as an economic driver post-Ukraine, highlighting Serbia among key regional players. Belgrade Infrastructure & Memory: Vučić and Dodik discussed the Donja Gradina memorial center’s construction.

EU Enlargement Push: Austria, Czechia, Italy, Slovakia and Slovenia want “step-by-step” access for Western Balkans candidates to the EU single market—sector by sector (energy, transport, digital, critical raw materials), with safeguards if reforms slip. Ukraine-Serbia Trade & Diplomacy: Serbia says trade with Ukraine is back to pre-war 2021 levels ($442.2m in 2025) and a joint statement is being prepared to keep FTA talks moving; Ukraine’s visit to Belgrade this week will be led by Deputy PM Taras Kachka, not Zelenskyy. Business & Tech: Orion Telekom and the Serbian Chamber of Commerce and Industry will build a Serbian business AI language model; Serbia also eyes Expo 2027 participation from Ukraine. Industry & Energy: Stellantis’ Kragujevac output is rising toward 150,000 vehicles/year, with new weekend shifts and job growth expected. Regional Security: A Washington meeting links Serbian-based criminal networks to threats on US highways, after a 60 Minutes exposé. Sports & Culture: Eurovision 2026 spotlight stays on Israel’s Noam Bettan (2nd) while Serbia’s presence continues across EU and regional events.

Serbia–Ukraine Trade Push: Serbia and Ukraine have prepared a joint statement to keep free-trade agreement talks moving, with a signing expected soon by Ukraine’s Deputy Prime Minister Taras Kachka and Serbia’s trade minister Jagoda Lazarević—aimed at tariff cuts, simpler procedures, and sector-by-sector deals. Western Balkans EU Access Model: Austria, Italy, and four others want “step-by-step” single-market access for candidates once they align with EU rules, using systematic sector integration with safeguards if countries backslide. Energy Deal Pressure on NIS: Serbia’s position on MOL’s bid for NIS remains a live wire, with officials saying Serbia could buy the Russian stake if no deal lands—while deadlines loom. Infrastructure Momentum: Stellantis’ Kragujevac output is rising toward 150,000 vehicles a year, with new weekend shifts and export-heavy demand. Tech & Industry Showcase: Serbia opened its International Technical Fair in Belgrade, highlighting EXPO 2027 and a push toward AI, digitalisation, and science-industry links.

Auto Jobs Push: Stellantis’ Kragujevac output is rising in 2026 and could hit 150,000 vehicles a year, with weekend shifts planned from June and “hundreds” of new jobs tied to demand for the Fiat Grande Panda. Tech & Industry Showcase: Serbia’s 68th International Technical Fair opened in Belgrade, with PM Djuro Macut highlighting EXPO 2027 and investment in science parks, digitalisation and AI; the event runs to May 22 with 600 exhibitors from 31 countries. Energy Diplomacy: Serbia signals it’s ready to protect its interests in the NIS/MOL standoff—former energy minister Zorana Mihajlovic says Serbia could offer to buy MOL’s Russian stake if no deal is reached, with the key condition that the refinery keeps operating at the same level. Regional Energy Moves: A tender winner has been named for the Hungary–Serbia oil pipeline, while the US backs new gas projects across the Western Balkans to cut reliance on Russian supply. Global Context: Putin heads to Beijing for talks with Xi, with energy deals and the long-delayed “Power of Siberia 2” back on the agenda. Trade & Compliance Watch: CBAM is already reshaping regional electricity and cross-border flows, with Serbia reporting lower liquidity and reduced EU-bound trade.

Sanctions Crackdown: Germany says it has dismantled a network routing Western dual-use tech into Russia’s defense, nuclear and submarine programs, arresting a Lübeck-based intermediary tied to a broader logistics web. Energy Diplomacy: In Baku, Serbia’s Vučić pushed deeper cooperation with Azerbaijan—talks included a framework for a new ~500 MW gas power plant near Niš—while the wider region keeps eyeing alternative gas routes as US-backed projects expand across the Western Balkans. Grid + Carbon Pressure: Serbia’s energy traders warn that the EU’s CBAM is already hitting electricity market liquidity and cross-border trade, adding volatility just as the green transition demands faster grid readiness. Urban Forum Momentum: Serbia’s leaders are using WUF13 in Baku to line up industrial, infrastructure and digital partnerships, including with Uzbekistan. Local Business + Talent: ProGlas launches diaspora debates across European cities, while Belgrade’s Vračar gets a new student-style café concept—small signals of how politics and services are reshaping everyday life.

Serbia–Uzbekistan Push: In Baku at the World Urban Forum, Aleksandar Vučić met Shavkat Mirziyoyev and both sides flagged a jump in trade and industrial cooperation—mechanical engineering, chemicals, pharma, agriculture and tourism—plus a first forum of university rectors and cultural “Days of Cinema.” Serbia–Azerbaijan Energy & Deals: Vučić also met Ilham Aliyev and Slovak PM Tomas Taraba, thanking partners for support of Serbia’s territorial integrity; the big ticket is energy—talks on a gas-fired power plant near Niš (~500 MW) and broader infrastructure, investment and transport links, with direct Belgrade–Baku flights boosting tourism. Grid Reality Check: At Belgrade Energy Forum, Serbia’s TSO said the grid must absorb ~12 GW of renewables in six years, while CBAM is already squeezing regional electricity trade and liquidity. Tech & Industry Signals: NGEN showcased smart batteries and AI grid management; PepsiCo/Fertiberia scaled green-hydrogen fertilizer trials across multiple countries including Serbia. Policy & Society: ProGlas launched a diaspora debate tour across European cities starting June 7 in Frankfurt.

Serbia-Azerbaijan Deal Push: President Aleksandar Vučić met Azerbaijan’s Ilham Aliyev in Baku, thanking Baku for support on Serbia’s sovereignty and flagging a next step on energy, infrastructure, and investment—with direct flights and tourism links highlighted as practical momentum. Grid Readiness for the Green Shift: At the Belgrade Energy Forum, Serbia’s TSO EMS said it’s preparing to connect 12 GW of renewables in six years, stressing that transmission upgrades and cross-border integration are the real bottleneck. NIS Talks Watch: The week’s big commercial thread continues around Serbia’s NIS sale talks with MOL, with deadlines and revised offers still shaping negotiations. Regional Energy Finance Pressure: European bond yields jumped on energy-driven inflation fears, a reminder that financing costs can quickly tighten across the region. EU Politics Noise: Manfred Weber’s “firewall” debate in the European Parliament keeps the far-right question front and center—politics that can spill into energy and industrial policy.

Serbia–Azerbaijan Business Push: President Aleksandar Vučić wrapped talks in Baku with Azerbaijani entrepreneurs, calling Azerbaijan a “true friendly country” and pointing to direct Baku–Belgrade flights as a boost for tourism and trade. He urged new investment in Serbia, especially in retail, spa and mountain resorts, and agricultural products. Energy Partnership: Azerbaijani officials highlighted gas exports to Serbia since January 2024 and the joint gas-fired power plant in Niš as proof cooperation is moving from plans to projects. Regional Energy Agenda: Serbia’s energy minister said the country is positioning itself as a south–north hub, citing interconnectors with Bulgaria and capacity upgrades with Romania, plus planned gas infrastructure investment. EU/Markets Context: European bond yields jumped on energy-driven inflation fears, a reminder that financing conditions across the region can tighten fast. Note: This week’s Serbia-specific industry coverage is dominated by the Azerbaijan visit and energy cooperation; other items are lighter.

Eurovision Shockwave: Bulgaria’s Dara won Eurovision 2026 in Vienna with “Bangaranga,” beating Israel in a tense final vote as boycott politics and protests kept the spotlight off the music. Serbia in the Mix: Serbia still made the final lineup and sat in the running order around major acts, keeping regional attention on the Balkans’ pop scene. Energy Markets Jolt: European bond yields jumped to multi-year highs as energy-driven inflation fears returned, raising the odds of tighter rates across the region. Serbia Energy Push: Serbia’s energy minister doubled down on a south-north hub plan—more grid capacity, new gas interconnectors, and a target of 20–25 bcm gas transport—while warning decarbonisation must not undermine security. Regional Agri Tech: Serbia’s Novi Sad fair opened with 1,200 exhibitors and a strong digital farming theme, signaling continued investment in smarter production.

Eurovision Final in Vienna: Delta Goodrem took the stage for Australia in the grand final, with the show running under tight security and rainy conditions, while the contest’s Israel inclusion still sparks protests and boycotts across Europe. Serbia Energy Push: Serbia’s energy minister says the country is positioning itself as a south-north hub for electricity and gas, citing completed Bulgaria and Romania links, new interconnectors toward North Macedonia and Greece, and plans to expand gas transport capacity to 20–25 bcm. NIS/MOL Deadline Pressure: Serbia says it will submit its final position to MOL on the proposed majority stake in NIS, with MOL expected to respond around May 18 and talks still hinging on refinery operations and fuel supply to the domestic market. Belgrade Security: A senior Belgrade police figure, Veselin Milić, was detained over alleged cover-up links to a missing man case, with multiple other suspects also held. Local Infrastructure: Belgrade Avenue and Main Street works move into new phases, bringing staged road closures and pedestrian access changes.

NIS Deadline Pressure: Serbia’s energy minister says Belgrade will deliver its final position to Hungary’s MOL on the takeover of NIS by end of day May 15, with MOL expected to respond by Monday May 18—while the sticking point remains the future operation of the Pančevo refinery and guarantees for domestic supply under a May 22 process deadline. Regional Energy Security: Energy ministers in Athens stress that Southeast Europe’s resilience hinges on cross-border grid and gas links, pointing to the Vertical Gas Corridor logic being extended westward via new Greece–North Macedonia and North Macedonia–Serbia interconnections. Agribusiness Spotlight: The International Agricultural Fair opened in Novi Sad with about 1,200 exhibitors from 40 countries, pushing smart farming and precision tech as farmers face climate and cost pressures. Eurovision Noise, Vienna Tonight: The grand final is set in Vienna amid the biggest Israel-related boycott wave in years, with Serbia’s metal act among the headline names. Public Safety Shock: Belgrade police chief Veselin Milić was detained over a disappearance case, with multiple related arrests reported as the search continues.