EU Growth Plan: Serbia's €1.5 billion second tranche at risk
A European Commission progress report finds Serbia has delivered only three of seven reforms for the second EU Growth Plan tranche, putting €1.5 billion of payments at risk before the 31 December 2026 deadline.
The European Commission, in a progress report presented on 23 May by Enlargement Commissioner Marta Kos, found that Serbia has delivered only three of seven planned reforms for the second tranche of the EU Growth Plan. The finding puts payment of the next €1.5 billion at risk before the 31 December 2026 deadline.
After that date, funds not unlocked against the reform milestones become permanently unavailable under the Reform and Growth Facility mechanism.
€172 million paid out of €6 billion envelope
Of the €6 billion earmarked for the 2024-2027 period, Serbia has received €172.1 million to date.
Payments disbursed:
- Pre-financing: €111 million (June 2025)
- First tranche: €61.1 million (January 2026)
The next two tranches, totalling €1.5 billion, were scheduled for March and September 2026. Both have been suspended due to slow reform implementation.
Three reforms cleared, four still open
The three reforms marked as delivered for the second tranche:
- Establishment of the Centre for Digital Transformation of Public Administration
- Formal consolidation of beneficial registers of development funds
- Migration to the new tax administration system e-Porezi 2.0
The four open reforms, per the Commission’s assessment:
- Amendments to the judicial independence law, the so-called Mrdic laws, which the Commission says restricted judicial independence
- Alignment with the EU Energy Acquis on renewables
- Public procurement legal reform
- Digital citizen identification interoperable with the eIDAS 2.0 framework
EU Delegation Head in Serbia Emanuele Giofre commented on 26 May, in an interview with Vreme, on the systemic nature of the blockage.
The lack of progress on judicial reform is a systemic blockage for payment, because the European Commission cannot agree to budget support financing for a country that does not meet the fundamental criteria of the Lukavac Agreement.
Giofre stressed that the deadline is absolute.
The 31 December 2026 deadline is absolute, which means that failure to close the Mrdic laws by the end of October would in practice block payment of both remaining tranches.
Serbian government’s position
Prime Minister Djuro Macut set out the official position on 27 May after the government session.
The Republic of Serbia remains committed to delivering all 98 reform milestones from the Growth Plan, but with the need for open dialogue on the interpretation of judicial independence, which is defined more broadly in the national framework than in the European standard.
Macut flagged two key dates. A meeting with senior European External Action Service officials is set for 4 June. Concrete amendments to the Mrdic laws will be discussed at the government session on 11 June.
A Statistical Office estimate published on 22 May quantifies the impact of losing the tranches:
- GDP scenario with tranches: growth of 3.9 percent
- GDP scenario without tranches: growth of 3.3 percent
The bulk of the planned projects finance Corridor 10 reconstruction and renewable energy capacity.
Is the 31 December deadline realistic
The open question is whether the remaining seven months are enough to deliver four open reforms. The judicial amendments require a two-thirds majority in the National Assembly, a threshold not guaranteed in the current parliamentary composition.
A follow-up on the opposition and Judges’ Association reactions to the proposed Mrdic law amendments will follow.
