Owners of nationalised property await restitution

The former Serbian government, headed by current Prime Minister Vojislav Kostunica, unveiled a draft restitution law days before reaching an agreement on a new ruling coalition. President Boris Tadic’s Democratic Party is not expected to block the legislation, as the draft received positive evaluations from NGOs that advocate denationalisation.

Under the new law, original owners would either regain their former property or receive financial compensation. Serbian citizens have so far filed some 73,000 claims seeking restitution of land — amounting to an area the size of Montenegro — and other property.

The draft calls for denationalisation of development land, which, unlike agricultural land, must be “separated” from facilities built on it before it can be returned to the former owners. Commercial buildings, apartments, industrial and retail facilities, and other real estate, not privately owned, are also subject to restitution.

If the expropriated property cannot be returned to its pre-1945 state, the former owners will receive financial compensation. Some 4 billion euros have been allocated for financial restitution of property, according to the draft law.

“The amount will not seriously affect Serbia’s macroeconomic stability, as the funding should be raised through 20-year bonds, until January 1st, 2028, with a 4.5% interest,” said former Finance Minister Milan Parivodic.

The bonds could be used to purchase state-owned stocks, pay taxes, or as a down payment for loans disbursed by state-owned banks.

Mile Antic, the head of the Belgrade’s Network for Restitution, believes the draft law is the most sensible proposed so far, and that the return of original property will reduce financial compensation that the state would otherwise have to pay.

“When property is returned, the budget’s tax revenues will grow, so the 4 billion euros amount will be much lower,” says Antic.

Lawyer Branko Pavlovic, formerly head of the state’s Privatisation Agency, says that the draft’s main shortcoming is its failure to equally treat all original owners.

“The draft law does not treat equally former owners who receive their original property and those who will be forced to seek financial compensation,” Pavlovic said.

According to Parivodic, however, the authors of the draft law sought to protect the interests of all, rather than individual citizens.

“The [draft] law does not seek to protect former owners’ absolute interest, but the law must safeguard macro-economic policy. It must also protect succeeding owners’ interests and do so efficiently.” Parivodic said.

The first task of Serbia’s new government was to adopt the 2007 budget and end the semi-legal period of provisional financing. The draft law will probably reach Parliament’s agenda sometime this summer, much to the relief of original owners, who want Serbia to redress the historical injustice, as did other countries in the region.

Property restitution, as a form of protection of private ownership, is one of the key requirements on Serbia’s path to European integration.