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SERBIA: Mixed Feelings on Restitution Law for WWII Property

Vesna Peric Zimonjic

BELGRADE, Sep 27 2011 (IPS) - The Serbian parliament has adopted one of the most long awaited – and most controversial – laws in its recent history: the law on restitution of property confiscated by the communist regime after World War II.

The legislation passed on Monday stipulates the return of property or land when possible, or else compensation in state bonds from the 2.69 billion dollar fund set up by the state for some 150,000 former owners and their heirs in this east European nation of 7.5 million people.

The legislation is one of the pre-conditions for Serbia’s bid for European Union membership later this year.

It defines Mar. 9, 1945 as the date when brutal confiscation of private property and businesses began in Serbia, together with Feb. 15, 1968, when a second wave of confiscation was launched.

The law calls on former owners or, in many cases, their heirs, to submit property restitution claims to the newly formed Restitution Agency, until the end of 2013.

In 2014, it says, restitution of farmland, houses, apartments and forests will begin “where possible”. If not, state bonds will be issued to former owners or heirs as compensation, up to a maximum value of 672,000 dollars. “This is not an ideal law, but it is realistic and in accordance with Serbia’s economic possibilities,” Vice Prime Minister Bozidar Djelic told reporters at parliament after the legislation was passed.

“We had three things in mind when proposing the law: undo the injustice to many families; avoid causing additional injustice, by respecting the property rights of current owners; and bring the law into line with the property and financial resources at the disposal of our state, so that it could be applicable and would not endanger the financial stability of Serbia,” he added.

Djelic was responding to criticism of the law, mainly from the associations that group former owners of confiscated property. For years they had demanded complete restitution of land, real estate, factories, and hotel buildings – in some cases entire downtown areas of small Serbian towns, or public buildings and palaces in Belgrade, which belonged to their families up to 1945.

However, the law clearly says that what became state property and remained for public use – such as libraries, ministries, embassies, and health, cultural or educational institutions – will continue to be public property and will be compensated in bonds.

The former owners of factories that had been seized by the state but were privatised in the past two decades will be similarly compensated.

“The state has allocated six percent of GDP for restitution – 2.69 billion dollars,” Professor Zlatko Stefanovic, a financial expert, told IPS. “Anything more than that would misbalance the budget and undermine the sustainability of public finances.”

Other experts put their estimates of restitution and compensation at up to five billion dollars, “which is hardly something Serbia can meet,” as law professor Jovica Trklja commented to IPS.

“The whole process (of restitution) will thus be very slow and risky…the hasty way the law was pushed through only serves the EU candidacy bid and will remain a hot potato for the next government,” he added.

Serbia is to hold parliamentary elections in April 2012.

As for the decades it took to resolve the issue, Stefanovic notes that it took 20 years for post-WWII Germany to complete the process of de-nationalisation, while “Slovenia, the only EU member from former Yugoslavia, has been doing it since 1991 and hasn’t finished yet, and the same goes for Croatia and some other East European nations. There is no way the process will be quick here.”

Bogdan Veljkovic, an octogenarian U.S. citizen of Serbian origin, says that “former owners will get only the crumbs of what our families used to have.”

Before WWII, his family owned a bank, the biggest Serbian brewery, several hotels in downtown Belgrade, the first private art museum and several villas in the posh neighbourhoods of the capital, as well as several huge vineyards in central Serbia.

“I will not accept the limited financial compensation,” Veljkovic says. “My family and families of other shareholders in our enterprises want to revive the businesses. We’ll see who we shall address, even internationally, to have the injustice to us undone.”

For others, mostly farmers whose farmland over 20 hectares left for private purposes was confiscated for state-run farming enterprises, the law is not that bad.

“We have documents on what vineyards and forests belonged to us before 1945, the mills, saw mills and small brick factory,” farmer Dragan Stepanovic, 38, from the village of Bratinac, told IPS. “I’m glad our family will get them back…Yes, the state has employed people at the mills until now, and I’ll keep them on. To be honest – there was investment of money and work in them in the past years and I respect that as well.”