03/07/2008 01:30. With confirmation of a pro-EU government in Belgrade expected this week, the announcement in May that the Italian automaker Fiat is coming to Serbia may foreshadow a surge in western investment.

President Boris Tadic's nomination of Finance Minister and fellow Democrat Mirko Cvetkovic to be prime minister indicates a Serbian effort, predicted by numerous observers, to attract sceptical foreign investors and raise living standards. Long blocked by wars and international sanctions, Serbia now trails Romania and Bulgaria in per capita GDP and greenfield investments.

Fiat reached an agreement with the Serbian government before the May 11th elections about investing in Zastava, an existing auto plant, in the city of Kragujevac.

Under the deal, Fiat plans to invest around 700m euros in... // Southeast European Times