On Monday 5 December, Prime Minister Aleksandar Vučić and Commissioner Johannes Hahn will attend the ceremony of signing of EUR 80 million Financing Agreement to support deep transformation of the Serbian public administration.

The document will be signed by Minister for European Integration, Ms Jadranka Joksimović, and Director for Western Balkans of the European Commission, Ms Genoveva Ruiz Calavera.

EUR 80 million is one of the biggest ever contracts between Serbia and the EU. This is non-refundable EU assistance, through which EUR 70 million will go directly to the budget of Serbia in separate instalments over the period of three years, while EUR 10 million will support implementation of the Sector Reform Contract.

The EU is investing these funds in comprehensive public administration reform which Serbia is undertaking in order to ensure better and faster public services for all Serbian citizens and businesses, more organised and effective public administration, increased transparency of public resources and involvement of citizens in policy making.

As a result, the Serbian public administration should be better equipped to respond to the challenges of comprehensive reform, fiscal consolidation, and European integration.

Public administration reform is one of the three pillars of the EU accession process, along with Rule of Law and Economic Governance.

This Financing Agreement is the first ever Sector Reform Contract for Serbia, and is funded from the EU’s Instrument for Pre-Accession Assistance (IPA) 2015. The funding will be provided as direct budget support to co-finance national sector reform agendas for achieving sustainable results.

Sector Budget Support (SBS) is an important tool in EU development cooperation which involves dialogue, financial transfers to the national treasury account of the beneficiary country, performance assessment and capacity development, based on partnership and mutual accountability. The financial resources will be managed using national public financial management systems. Direct SBS provides a means to align with beneficiary countries own policies, priorities and objectives through co-financing national development strategies and promoting sound and transparent public finances.

The contract covers two crucial reforms: public administration and public financial management. It focuses on:

  • de-politicisation of the civil service and merit based human resources policy;
  • re-structuring of the public administration;
  • involvement of civil society in policy making;
  • improvement of services for business enabling environment;
  • improvement of national budget preparation, in particular inclusion of state owned enterprises´ budget.