Serbia has moved a step closer towards EU accession after MEPs backed a Stabilisation and Association Agreement (SAA) with the ex-Yugoslav country on 18 January 2011.
The SAA allows for greater links between the EU and Serbia in areas such as trade and on tackling cross-border crime.
It was signed in 2008 but must be ratified by all member states and consented to by the European Parliament before it can come in to effect.
Opening the debate, the European Parliament's rapporteur on Serbia, Slovene liberal MEP Jelko Kacin welcomed Serbia's progress on political and institutional reform and called on the remaining member states to ratify the SAA.
However he warned that Serbia needed to take a more "constructive" stance on Kosovo.
Serbia has dropped its demand for international talks on Kosovo's status following its declaration of independence from Serbia in 2008 - a declaration condemned by Belgrade.
The country's refusal to recognise Kosovo was one of the key barriers to any prospects of EU accession.
In her debut speech to the European Parliament since her country took on the rotating presidency of the Council of Ministers, Hungarian State Secretary for European Affairs Eniko Gyori said the agreement could help tackle illegal cross-border trade and improve co-operation on environmental issues.
A report by the Foreign Affairs Committee, also debated by MEPs, said that progress on accession still depended on full co-operation with the international war crimes tribunal in The Hague.
Hungarian centre-right MEP György Schöpflin called on Serbia to overcome its "psychological barrier" and arrest the two remaining top fugitives - former Bosnian Serb general Ratko Mladic and the Croatian Serb wartime leader Goran Hadzic.
MEPs have called on more to be done to modernise Serbia's economy, by reducing the number of monopolies, and increasing the amount of liberalisation and privatisation.
Meanwhile Dutch eurosceptic MEP Barry Madlener opposed Serbia's potential accession saying it was a "poor country with high levels of corruption".
Formal accession talks have not yet started however the European Commission is expected to make an announcement in the autumn of 2011 on Serbia's membership prospects.
The SAA was formally approved at the
on 19 January 2011.
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