Member Article

Recent news bring us an update from the Energy Community (EC), whose latest report has outlined that Serbia has not resolved the key issue of non-compliance with the aquis – something that presents a continuous violation of obligations under the EC Treaty – by not completing the separation of Srbijagas and Yugorosgaz activities in accordance with the "Second Energy Package". The EC's report specifies that, in the reporting period, Serbia has in a way cancelled much of its prior efforts when it comes to the separation of these activities, effectively slowing down the process of harmonising secondary legislation. Furthermore, the EC has also requested Serbia to complete the transformation of its Electric Power Company into a joint-stock company by 1 July 2016 – another deadline that has been breached.

As a consequence, the European Secretariat submitted a Request to the Ministerial Council for a decision under Article 92 of the EC Treaty to be adopted in October 2016. Ultimate sanction under Article 92 of the EC Treaty – if a breach of obligations under the Treaty is determined – would be a suspension of Serbia's voting rights within the EC and the exclusion from meetings or mechanisms that are provided for in the EC Treaty.

The Ministerial Council's final decision will soon be announced and a close eye should be kept on the development of this process, as its consequences can be far reaching not only for the energy market in Serbia, but also for the country's path towards EU accession. Finally, it should also be noted that in case the Council decides to initiate Serbia's suspension, the decision can still be revoked at a later date via a simple majority vote.