Why Serbia’s EU ambitions are on the line as Vučić weighs up Putin invite

Good morning. News to start: Brussels is looking at ways to enable European companies to break long-term Russian gas contracts without paying hefty compensation, as part of an effort to end the Kremlin’s exports to the EU.

Today, I unpack EU threats to Serbia over its president’s plan to attend Vladimir Putin’s war parade, and our energy correspondent reports on a debate on loosening Brussels’ 2040 climate target.

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Picking a side

EU capitals have warned Serbia’s leader that attending Vladimir Putin’s May 9 military parade in Moscow’s Red Square could derail his country’s EU accession bid.

Context: Russian President Vladimir Putin hosts a “Victory Parade” each year to commemorate the Soviet Union’s victory in the second world war. Foreign leaders are guests of honour to watch the column of troops and tanks. Russia has been waging a brutal war of conquest in Ukraine for more than three years.

Serbian President Aleksandar Vučić is scheduled to attend and will contribute military assets to the parade, according to Russian media reports.

EU officials yesterday warned Vučić that attending the parade — which is set to include troops who have been involved in the war against Ukraine — would breach their membership criteria.

“We need to ensure that they understand that certain decisions come at a cost,” said Jonatan Vseviov, secretary-general of Estonia’s ministry of foreign affairs. “The consequence is them not joining the European Union.”

Serbia has long attempted to simultaneously cultivate ties with Brussels and Moscow. It has refused to adopt western sanctions against Russia, infuriating EU capitals who insist such a step should be part of their accession ambitions.

Russia owns Serbia’s sole oil refiner and is refusing to sell, leaving the country facing a potential energy and economic crisis if threatened sanctions are imposed on the company at the end of this month.

“Russians have been working hard to get people to attend . . . For us this will be an important litmus test,” Vseviov said. “Basically what we look at is whether or not they are on our side or playing on the other team.”

EU foreign ministers at a dinner with Western Balkan officials on Sunday night gave “very clear guidance . . . not to participate on the May ninth parade in Moscow”, Latvia’s foreign minister Baiba Braže said. “As it would not be in line with EU values.”

The EU has problems of its own regarding the parade, too. Robert Fico, Slovakia’s prime minister who met with Putin in December, has also said he plans to attend the parade.

“We made it very clear that we don’t want any country to participate,” the EU’s chief diplomat Kaja Kallas said yesterday.

Chart du jour: Euro strikes back

It’s dark days for the once-mighty dollar, as the world’s reserve currency gets a sharp shock from Donald Trump’s trade war.

Green card

EU officials are considering whether to loosen the bloc’s 2040 climate target by allowing carbon credits to count towards the final goal. But a new report suggests that could do more harm than good, writes Alice Hancock.

Context: The European Commission has promised to present a climate target for 2040 before summer. President Ursula von der Leyen has vowed it will commit the bloc to cut emissions by 90 per cent, compared with 1990 levels.

But the decline of EU industry and increasingly vocal concerns about the bloc’s green ambitions have forced the commission into policymaking gymnastics to stick to its commitments.

The options considered include revising land use regulations, greater flexibility in the bloc’s emissions trading system, and allowing carbon credits to count towards the target, according to officials involved in the plans.

Carbon credits give buyers the right to emit a certain amount of CO₂ by compensating for the emissions through investments in tree planting or other offsetting schemes. Their credibility has long been questioned.

The debate has been spurred on by Germany’s new government backing the 90 per cent target, as long as countries could meet their obligations partly through carbon credits.

NGO Carbon Market Watch has pointed out, however, that carbon credits don’t necessarily help reduce greenhouse gas emissions and could in fact increase them, as businesses pay for credits instead of adapting their business models.

It looked at the first batch of carbon credits to be released under a recent UN agreement, concluding that “less than one of every 27 credits is likely to represent real emission reductions”.

A spokesperson for the European Commission said that the target would be an “ambitious climate law” and work on it was “ongoing”.

What to watch today

1. Spain’s economy minister Carlos Cuerpo meets US Treasury secretary Scott Bessent in Washington.

2. Informal meeting of EU social affairs ministers in Warsaw.

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