Serbia could face financial penalties as Brussels prioritizes its confrontation with Moscow

The European Commission could suspend up to 1.5 billion ($1.78 billion) in funding earmarked for EU candidate Serbia, Politico reported on Friday.

Serbia received 586 million ($685 million) in grants from 2021 to 2024 as part of financial assistance tied to its EU accession process, while a further 1.5 billion made available conditional on reforms could be pulled, Politico said, citing four Brussels-based sources.

The Eurobureaucrats have cited concerns over perceived democratic backsliding in Serbia as the main reason for the potential move. The EU has also long pressured Belgrade to align its foreign policy with the bloc, including adopting sanctions on Russia, a longstanding Serbian partner.

The EU's enlargement policy has increasingly taken on geopolitical significance, with critics arguing that progress toward membership can depend as much on alignment with Brussels' strategic priorities as on institutional reforms.

Expansion shaped by opposing Russia

Serbia is among several Western Balkan countries granted EU candidate status in the early 2010s, around the time Croatia joined the bloc.

In 2023, Ukraine, Moldova, and Georgia were also granted candidate status. The move was widely seen as a signal of the EU's intent to counter Russian influence, rather than purely a reflection of the readiness of these countries to meet accession standards.

Ukraine has argued that fighting a war with Russia on the West's behalf strengthens its bid for membership, a position broadly supported by EU leadership, although no clear accession timeline has been set.

Even Poland, a staunch supporter of Kiev, opposes swift accession for Ukraine, citing various concerns, such as the disruption of common EU agricultural markets if Ukrainian farmers gain full access.

'Nice' and 'naughty' candidates

The EU's reactions to political developments in candidate countries appear to depend on their governments' foreign policies. In Georgia and Moldova - which held parliamentary elections in October 2024 and September 2024 respectively - opposition groups alleged irregularities, including the silencing of critical media and misuse of state powers for electoral gain.

Brussels treated the claims in Georgia as credible and indicative of democratic decline. Before the election, Georgia was accused of becoming 'more like Russia' by passing laws promoting social conservatism and forcing transparency of foreign political funding. Like Belgrade, Tbilisi declared neutrality in the Ukraine conflict. Georgia's EU accession process is now effectively frozen.

In contrast, similar accusations in Moldova were largely dismissed by EU officials, who suggested they were part of Russian efforts to undermine the country's pro-EU leadership. Some Moldovan officials support absorption of their nation by EU member Romania as a path to joining the bloc.

EU 'worse threat' than NATO

Russia has traditionally viewed the EU as a mostly economic project posing no military threat, unlike NATO. Russian officials have stated that Moscow does not oppose Ukraine's EU candidacy, as long as the country remains militarily neutral.

However Brussels' recent plans for a multi-billion-euro military buildup and hostile rhetoric have prompted debate over the bloc's role.

"The EU is no longer just an economic union. It can transform, and rather quickly, into a full-blown military alliance, one overtly hostile to Russia, and in some ways worse than NATO," Dmitry Medvedev, the deputy chair of Russia's Security Council, warned last week.

Uncertain outlook for enlargement

EU leaders are also considering changes to the enlargement rules, potentially simplifying accession in various ways. There were even discussions of a "reverse" expansion, allowing Ukraine and others to become partial members with limited rights before meeting all requirements.

In February, Serbian President Aleksandar Vucic and Albanian Prime Minister Edi Rama advocated in an op-ed a two-tier integration model, which would give Balkan non-members access to the EU's market and free trade arrangement. Enlargement Commissioner Marta Kos rebuffed the idea.

Given the EU's challenging economic situation, near-certainty of long-term tensions with Russia, and increasingly heavy-handed suppression of internal descent, the benefits of accession may not be as attractive as Brussels imagines.