When Conditionality Meets Backsliding: Lessons from Sweden’s Aid Suspension to Serbia One Year Later

Exactly a year ago, on 3 November 2025, Sweden suspended financial support to Serbian state authorities,[1] marking a shift in its approach to reform cooperation in the Western Balkans. The decision, announced by Sweden’s Minister for Development Assistance and Foreign Trade, Benjamin Dousa, followed Serbia’s continued decline in several international governance indices in 2025.[2] This prompted Dousa to state that “developments in Serbia have gone in the wrong direction” and that Serbian authorities have failed to deliver the necessary reforms to uphold the rule of law and mitigate corruption.[3] Consequently, Sweden immediately reallocated financial resources towards civil society organisations (CSOs) in Serbia. Using Sweden’s suspension of aid to Serbian state authorities as a case study, the brief analyses how the decision came about, its implications for Serbia’s reform trajectory, and what it reveals about the limitations of conditionality as a reform tool.

The brief was finalised in the aftermath of Serbia’s October 2026 parliamentary elections, which brought political change and opened a window of opportunity to renew reform momentum and reset relations with Sweden and the EU. The lessons from the suspension are therefore examined not only in retrospect, but also as input for how bilateral and EU-level support can be calibrated so that this window translates into lasting institutional reform. This paper argues that the effectiveness of conditionality in EU enlargement increasingly depends on the actions of individual member states, whose bilateral approaches to the issue of backsliding can reinforce or undermine incentives vis-à-vis candidate countries. Finally, the brief offers a set of recommendations for the Serbian government, the EU, and the government of Sweden.

[1] Government Offices of Sweden, “Government to review Serbian reform support”, November 2025.

[2] Transparency International, “Corruption Perceptions Index 2025: Serbia”, February 2026.

World Justice Project, “Rule of Law Index 2025: Serbia”, October 2025.

[3] European Western Balkans, “Sweden Decides to Suspend Certain Forms of Support for Serbian State”, November 2025.