This past Saturday was exactly 10 years since the Serbian government signed a contract with the Italian carmaker, Fiat which will go down in history as the most valuable contract that the government has signed with a foreign investor up to that point.
The contract expired two days ago, and the new one has not yet been concluded – writes the Danas daily.
Following the signing of the contract, the Serbian government officials, with former Prime Minister Mirko Cvetkovic, said that they had just concluded a business deal of the century, securing an investment worth 1 billion euro and establishing a company that would be one third owned by Serbia and two thirds by Fiat. At that time, the officials also said that Fiat’s factory in Serbia would be producing 200,000 annually.
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So, did the cooperation with Fiat pay off for Serbia?
Fiat as the biggest exporter
What is certain is that Fiat has founded the biggest automotive plant in Serbia and that, since 2013, it has been the largest exporter with export revenues of more than 5 billion euro. In 2013, Fiat’s export, amounting to 1.5 billion euro, constituted more than 10 per cent of Serbia’s total exports. Last year, this ratio decreased considerably, with the value of Fiat’s exports of about 850 million euro. The same year Serbia’s total exports amounted to 16.7 billion.
Fiat’s factory in Serbia currently employs in this about 2,300 people, and in 2013 there were 3,400. Prior to the arrival of Fiat to Kragujevac, the town was referred to as the “Valley of Hunger.” The company has been making profits since 2013, but with the exception of last year, the profit always amounted less than state subsidies that the company receives.
Also, Fiat came precisely the onset of the global economic crisis when investments in the world stagnated. Later, a number of companies from the car parts sector came to invest in Serbia.
Temporary effect of statements
On the other hand, according to the company’s financial reports for the five years from 2013 to 2017, the state has paid 120 million euro to Fiat in subsidies.
Fiat’s employees in Serbia are now concerned about their company’s future. The recent statements by Prime Minister Ana Brnabic that Fiat will remain in Serbia even after September 29th, as well as the identical message coming from Fiat Serbia’s Director General, Silvia Vernetti who said that Fiat would continue operating in Serbia and that there would not layoffs, had only a temporary, sedative effect on the employees.
This post is also available in: Italiano