Belgrade  - Serbia is the crossroads of the Balkans, straddling the shortest route between Western Europe and the Middle East, but still it has been losing lucrative transit traffic to its neighbours.

The pan-European corridor 10, from western Austria, via Slovenia and Croatia, runs through the Serbian capital Belgrade as the fastest, best-developed and shortest road to Thessaloniki in Greece and Istanbul in Turkey.

But "because of time and cost, Serbia is out of the question," says Ingo Noe, an agent with the German shipping firm Willi Betz.

Traversing Serbia requires a huge amount of paperwork, each document costing money and time, all of which eventually forces truckers to waste long hours at borders.

Add more of the same at the European Union's borders with Croatia and Macedonia and a different solution springs out for the haulers - Corridor 4, across Romania and Bulgaria.

That route runs from eastern Austria, through Hungary and Romania, then across the Danube into Bulgaria and to Sofia, where it branches, one fork leading directly southward to Thessaloniki and the other south-east, to Istanbul.

That path is not only 200 kilometres longer, but also less developed and riddled by potholes. But Romania and Bulgaria joined EU in 2007, so haulers on that route require a single customs document until they reach Turkey, instead of a set of papers for each of the four borders on the shorter path through Western Balkans.

Noe sums it up simply: "We'll stay within the EU as long as we possibly can."

The fact that Romania and Bulgaria, backed by EU, are working to fix roads and remove bottlenecks - like at the Kalafat/Vidin border, where a bridge would replace ferries across Danube in 2010 - worries Serbs, who already face sharply declining international traffic.

The traffic volume already dropped by roughly 30 per cent over the past two years. For example, in 2006 some 11,500 German haulers used the Serbia route. A year later, the figure was just 4,500.

The collapse of the 1.1-billion euro (1.4 billion dollars) deal Serbia struck with an Austrian consortium to build a highway on the eastern branch of Corridor 10 from Budapest did not help.

The Austrians were to build a 220-kilometre segment of the highway from the Hungarian border to Belgrade, but backed out amid concerns over dwindling traffic and, subsequently, dwindling revenue.

After the deal flopped in August, Serbia said it would finance the construction, but it is unclear where the money would come from, particularly amid the troubles of the global financial crisis.

A possible 400-million dollar loan from the World Bank would cover only a part of the cost, even if all of it was used properly and nothing went to waste in Serbia's financially porous administration.

For instance, the construction of the Belgrade ring-road began 20 years ago and has claimed millions, yet all international traffic still goes through the city, mingling with commuters and public transport, getting stuck in and adding to the chaos.

At least Serbia recently levelled the highway tolls for local and foreign traffic, but even that too late, eight years after committing to do so and only under severe pressure from Greece.

In the past, foreigners paid up to 14 times more than the locals, in a practice outlawed in the EU which certainly did not endear Serbia as a route to shippers and truckers. (dpa)