"Subject behavior towards Russia, flattering Russophile-minded voters, but above all the move by which the president of Serbia shows that he takes care of himself and his government, not the state. A completely unstatesmanly move."
This is how economist Saša Đogović commented for "Vreme" the statement of the President of Serbia, Aleksandar Vučić, that Government of Serbia, on his initiative, adopted the proposal to give the Russian side 50 days to find a new owner for Oil Industry of Serbia (NIS). Only if this does not happen, Serbia will introduce its management in NIS and offer the Russians the highest possible price for that company.
Awaiting OFAC's decision
In another extraordinary address to the nation, Vučić said that Serbia still has four days until the complete shutdown of the Refinery, if in the meantime the Office for the Control of Foreign Assets of the Ministry of Finance SAD (OFAC) does not grant a license to NIS to import crude oil.
He added that the Refinery is still in the technological process of warm circulation, in a kind of "quiet walk".
"We still have today and tomorrow to try to get an operating license," he said, adding that it depends on the Americans.
Vučić: The Government of Serbia gave the Russians 50 days to find a buyer
The goal - as little damage as possible to Vučić
The goal of the decision to give the Russian side a deadline of 50 days, according to Đogović's belief, is - "to do the least possible damage to Vučić's political rating, so that he does not come into an open confrontation with the Russian side."
"Instead of protecting themselves energetically, the economic and security interests of the country, we are struggling with the Russians and we are giving some deadlines, while at the same time we are spending foreign exchange funds for procurement oil derivatives, in order to create a semblance of normality in the supply of energy products to the market", says Đogović for "Vreme".
Since during that time the Refinery in Pancevo will stop working, Đogović warns that Serbia is working in this way to its own detriment, and to the benefit of a party that "does not have a friendly relationship with Serbia at all."
"Russia is only protecting its interest, which is to, through the NIS, in one way or another, spread media, political and any other influence on space Western Balkans", says Djogovic.
Protection of Russian interests
He also reminds that the government in Serbia has proclaimed the country's economic growth of 3,5 percent for the next year and indicates that energy stability is necessary for this, which implies normal work Refineries in Pančevo.
Đogović underlines that the political leadership of Serbia is actually indirectly protecting the interests of Russia with the 50-day deadline it gave to the Russian side.
"The political elite in Serbia estimated that it would be less political damage for them if the Refinery in Pančevo did not work, than the damage they would have if Serbia took over NIS. In a Russophile-designed society, it was estimated that it would be less damaging for the government if foreign currency was spent on importing oil and if energy reserves were used up, than if Serbia took over a controlling package of shares from a Russian partner that proved to be hostile to Serbia," says Đogović.
Photo: Tanjug/Rade PrelićPresident of Serbia Aleksandar Vučić
Why pay the highest price?
Commenting on Vučić's announcements that industrial production could stop due to the cessation of operations of the Refinery in Pancevo, Đogović says that this will not happen, because oil derivatives and fuel oil will be imported, and gas "flows normally".
"Ceasing the work of the Refinery in Pancevo will reduce the gross domestic product, and that irreversibly. The government's move is subservient, because why would Serbia offer the Russians the highest possible price for NIS, when there is an estimated market price at which that company could be taken over," Đogović concludes.
Kovačević: The way out is bankruptcy
Economist Milan Kovačević tells "Vreme" that it will be very difficult for Serbia to be able to respond logistically if the work of the Refinery in Pancevo is stopped, and the citizens will pay the price for that.
"The solution could be for the Refinery in Pancevo to go to insolvency. In the event that something does not change in a positive sense very soon, so that we do not return to the times when we smuggled fuel and poured it into buckets, the creditors should initiate the bankruptcy of the Refinery, and the court should appoint a bankruptcy trustee. In that case, the Russians would withdraw, and only the bankruptcy trustee would decide how the Refinery will operate," says Kovačević.
He notes that then the bankruptcy administrator, with the explanation that he wants to solve the problem, would announce the sale of the Refinery.
"Besides, from the moment the bankruptcy trustee is appointed, the Refinery could start working again, because it would no longer be under sanctions, since the Russians would no longer manage it," says Kovačević.
Nationalization is a bad idea
He states that in the event of the cessation of the work of the Refinery in Pancevo, Petrohemija and other companies that do business with the Refinery will cease to operate, that the food supply will be threatened, that industrial production and the operation of heating plants will cease, that practically the entire country will find itself in a problem.
"The financial system will be shut down, and we will go into a major disaster, and that is why we should consider all options, even nationalization, as a backup option. In all likelihood, President Vučić will not opt for nationalization, but I don't like that idea either, because nationalization would lead to international arbitration, and the Russians would ask for a lot of money. General rules in the world say that one country cannot take something from another country without paying for it," says Kovačević.
Commenting on Vuičić's allegations that Serbia has certain reserves of diesel, oil and fuel oil, Kovačević says that these reserves could be used if the right solution were found quickly.
"I believe that we have already started to spend the reserves, which means that we have spent time, and now we are in a bind," concludes Kovačević.
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