Professor Ljubodrag Savić of the Faculty of Economics in Belgrade told RTS that the distinctive feature of this year’s World Economic Forum in Davos is that deep cracks within the Western bloc have come to the surface.
He particularly points out that the European economy has lost the advantage it enjoyed in previous decades of globalisation, and that Serbia must seek new partners in order to secure stable economic growth and development.
US President Donald Trump turned the World Economic Forum in Davos into his own show. The gathering at which the global financial elite discusses the directions of the world’s economic development each year became a summit for negotiations over Greenland, at which an economic war, and perhaps even a military confrontation between the US and Europe, was avoided at the last moment.
And no one is certain whether that economic war and the breakdown of the transatlantic alliance have been permanently averted, or merely temporarily postponed.
If, as many assess, the international political order is disintegrating, what will happen to the global economy, what kind of blows will Europe suffer and, together with it, Serbia?
Professor Ljubodrag Savić of the Faculty of Economics assessed that the messages from this year’s Davos bring nothing fundamentally new, but that for the first time, they have so openly laid bare relations among the most powerful actors in the global economy.
“When it comes to the economy, it is always a battle between major countries or blocs to dominate economic space – markets, new technologies and as large a share of the economic pie as possible. There is nothing unusual about that,” Savić stresses.
He believes that the specificity of this year’s Davos lies in the fact that deep cracks within the Western bloc have come to the surface.
Europe without clear trump cards
According to him, the West is no longer united, and relations between the United States and the European Union are becoming increasingly complex. While the US, as he says, still holds the strongest political cards, China has emerged as a serious and highly competitive economic player, while the European Union is left without clear trumps.
“Europe has a weak economic card. Not the economy itself, not the potential, not good companies, but the fact that it is unclear who drinks and who pays, who runs the European Union. You have an incredible division within the European Union and a lack of clear leadership,” Professor Savić warns.
He particularly highlights that the European economy has lost the advantage it had in previous decades of globalisation, when it used cheap components from China and built a strong industry on that basis. Today, he says, the situation is reversed – China no longer offers only cheap labour, but produces high-quality and competitive final products, including cars.
“Today, China does not compete only with cheap parts, but with very high-quality and cheaper products. That best shows where the European Union currently stands,” Savić says.
Problems in the German economy spill over into Serbia
Speaking about the consequences for Serbia, the professor emphasises that the domestic economy is strongly reliant on the European Union, primarily on Germany as the most important trading and investment partner.
Problems in the German economy, he warns, directly spill over into Serbia – through exports, foreign investment and remittances from the diaspora.
“Of course, it is in our best interest for Europe to recover. They are our immediate environment; America is far away. Europe needs good leadership, credible leadership. It needs a good plan. It must return to old-style industrialisation. That is when Europe was the strongest in the world,” Professor Savić said.
He hopes that Europe has learned its lesson and stresses that it must once again return to what used to be its most important card, its strongest card, and that is a strong industry.
Serbia on the European path, but also with new partners
Professor Savić points out that Serbia, although it remains firmly on the path towards the European Union, must actively seek new partners in order to ensure stable economic growth and development.
As a significant positive circumstance, he sees the existence of good agreements with China, which provide open doors for our country to that large market.
“We will not give up on the European Union; it is closest to us. But Serbia must continue strengthening cooperation with other partners as well. A fortunate circumstance for us is that we have a very good agreement with China, which allows us to have ‘open doors’. That is a great advantage,” Savić says.
According to him, Serbia must enter a process of reindustrialisation and focus on high-quality food products.
“We have a God-given climate and natural conditions for the development of agriculture. Not every country has that, not only in our region, but even in Europe. Serbia has great potential in agriculture, and that is something that should be used to the maximum,” Professor Savić said.
He adds that Serbia must invest effort in the development of domestic industry, large factories, and brands that will be recognised on the global market.
For Serbia, as he says, that is the only real path to future economic prosperity.
“If we do not start turning towards the development of domestic industry and if we do not build factories that will produce recognisable products, Serbia will not see good days. The only way to move forward is to enter into industrial development, with a focus on high-quality and globally competitive products,” Savić concludes.
EU leaders held an informal summit in Brussels
Last night in Brussels, European Union leaders held an informal summit at which they discussed the new reality in relations with the United States. This extraordinary summit of EU leaders produced key conclusions, formulated on behalf of all those present by the President of the Council, António Costa.
He said that the official message of EU leaders is that they welcome the easing of tensions in relations with Washington, which included the US decision to abandon additional tariffs.
Support for Denmark and Greenland was also reiterated with regard to their sovereign right to decide on their future.
However, judging by the statements and comments of leaders during the summit, it remains uncertain whether this abandonment of tariffs truly represents a lasting end to tensions, or merely a temporary pause.
Many are asking how long that pause will last and whether transatlantic relations will move into calmer waters, or heat up once again.
(Biznis i Finansije, 26.01.2026)