Russias Influence In South East Europe

Copyright 2017 Dimitar Bechev
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Russia and the Western Balkans
The withdrawal of our troops from Kosovo was a correct move,
and I believe they must not return. We are defending not Serbia,
but international law. The Serbs must defend themselves.
-Dmitrii Rogozin, Permanent Representative to NATO,
The disturbing fact is that there has been increasing talk in
Montenegro about “dirty Russian money’. I ask myself why
there is no talk of “dirty American, English or Hungarian
money”. Is “Russian money dirty” because Russia is a large state?
The good relations between Russia and Montenegro no longer
need to be mentioned. There is no other country in Europe
closer to us than Serbia-Montenegro and its peoples. We have
had good co-operation with Montenegro since Peter I.
-Vladimir Vaniev, Russian Ambassador to Serbia Montenegro,
2 October2005
Never mind the pouring rain, the military parade, the first one
Belgrade had seen in decades, was nothing short of a personal
triumph for Vladimir Putin. In a rebuff to Western sanctions, Serbia
heartily welcomed the Russian president as the guest of honor at
the festivities marking the seventieth anniversary of Belgrades
liberation in the Second World War. The hosts had gone out of their
way to accommodate Putin’s heavy travel schedule; the parade had
been moved to 16 October 2014, several days ahead of the actual
date the Wehrmacht left in 1944 and Yugoslav partisans and the
Red Army’s Third Ukrainian Front moved in.
It was an occasion to remember. Under the rain a 20,000-strong
crowd greeted the Kremlin’s master as Soviet-made MiGs dashed
overhead and tanks rolled down the city’s boulevards adorned in
the two countries’ red, blue, and white flags. The pomp and circumstance brought back memories of Putin’s last visit, as prime minister
in March 2011. Then, tensofthousands of Serbian fans had cheered
him during the FC Red Star game against his native St Petersburg’s
Zenit in Mala Marakana (Little Maracan) stadium. Moreover, the
Serbian Patriarch had decorated him with the Church’s most prestigious order, in St Sava Cathedral-another Belgrade landmark.
But this time around, Serbia’s leadership was also keen to show
that the love story had a pragmatic side as well. In the presence of
Putin, Prime Minister Aleksandar Vui and President Tomislav
Nikoli jubilantly announced to journalists that the Fiat cars,
assembled at the old Zastava plant in Kragujevac, would be sold
freely across the Russian Federation-as would Serbian cheese
too. Russian countermeasures targeting EU’s agricultural imports
could well be a blessing for brotherly Serbia. Amidst the cheerful
mood, few took notice of reports, several weeks after the visit, that
Gazprom was poised to cut deliveries to Serbia by 28 percent in
2015 over unpaid debts of some $224 million. Tough love that
was indeed.
Serbia occupies a special place for Moscow. Having signed a
Strategic Partnership declaration (24 May 2013) with Russia, the
country is an observer in the Moscow-led Collective Security Treaty
Organization (CSTO) and nurtures links with the Eurasian
Economic Union (EEU). But Serbia’s flirtation with Russia is hardly
unique. Others in former Yugoslavia do precisely the same. Led by
Prime Minister Nikola Gruevski, Macedonia has refused to join the
EU sanctions against Russia. Republika Srpska’s (RS) President
Milorad Dodik, another guest at the 2014 Belgrade parade, ensured
Bosnia stayed out as well. Even NATO and EU members Croatia
and Slovenia have turned to Moscow for economic opportunities.
By default or by design, Russia has assembled a friendly bloc across
the so-called Western Balkans and, more broadly, in former
Yugoslavia. Politicians in Belgrade, Skopje, and Banja Luka look
towards Moscow for investment, trade, financial assistance, and
diplomatic support. Pundits extoll the benefits of multibillion dollar
projects such as the South Stream pipeline. Why sacrifice national
interests for the sake of the West, which has so often victimized or
ignored their countries, they contend. EU membership is desirable
but, admittedly, it is a long way off. And besides, being part of
Europe” had not done neighbouring Bulgaria and Romania that
much good, not to mention the deprivations Greece has gone
through courtesy of its eurozone membership.
What Serbia, Macedonia, and even Republika Srpska opt for is
the time-tested Titoist policy of balancing between West and East.
But even pro-Western countries such as Croatia and, especially,
Montenegro, already included within NATO and the EU or edging
closer to membership, have been fond of ties with Moscow. Only
the Ukraine crisis made them take sides-reluctantly so. In fairness,
the attitude of Balkan elites has differed little from that of may of
their Western colleagues, with German Chancellor Gerhard
Schrder and Italy’s Silvio Berlusconi setting an example as to how
the blend of business and politics shapes views of Russia.
What follows is the story of how Russia and former Yugoslav
states reinvented their relations in the 2000s. The military withdrawal from Kosovo and Bosnia in June-July 2003 ushered in a
new phase of Russian engagement. “We are coming to the
Balkans in a different form,” argued Sergei Razov, deputy foreign
minister, stressing the promotion of economic interconnectedness as the strategy of choice. Compared to the 1990s, Russia was
using its energy assets and diplomatic clout more effectively to
broaden its footprint and assert its interests. As the Western
Balkans integrated ever more deeply into the EU, they opened the
door wide for Russia. The “rain parade” in Belgrade in October
2014 was anything but a surprise.
Someone Else’s Concern
In the 2000s, the former Yugoslav states commenced their belated
“return to Europe, as did neighboring Albania. (Slovenia joined
the EU with the first wave in 2004.) The death of Franjo Tudman
on 10 December 1999 and the downfall of Slobodan Miloevi on
5 October 2000 gave the starting signal for the westward journey
The EU took over responsibility for the “Western Balkans” from the
United States, promising the region membership at the Thessaloniki
Summit in June 2003 in exchange for political and economic
reforms and efforts at reconciliation. Croatia joined the EU in 2013,
with Serbia and Montenegro further back in the queue. NATO
expanded as well, taking in Croatia and Albania in 2009 and
Montenegro in 2017.
Former Yugoslavia’s turn to the West left little room for Russia.
Busy with consolidating power at home, Vladimir Putin downs
caled foreign commitments and focused on improving ties with
both the EU and the United States. The memory of Kosovo was as
painful as before, but other issues had come to the foreground. The
Kremlin forged common cause with President George W. Bush in
the post-9/11 “war on terror”. Co-operation with NATO resumed
after the freeze caused by the 1999 intervention against the Federal
Republic of Yugoslavia (FRY). The Balkans, on the other hand, had
ceased to be a top Russian concern. When an armed conflict broke
out in Macedonia in early 2001, pitting the government against the
ethnic Albanian National Liberation Army, a seasoned Russian
political commentator remarked:
It is the EU and then the US who bear responsibility for Macedonia
now. Let it be their headache, let them look for an exit from the
dead-end into which they led the situation through their excesive
leniency toward Albanian separatism (now in Macedonia,
yesterday in Kosovo). Russia will limit its contribution to “moral
solidarity” with the Macedonian authority and a “soft diplomatic
support” when the UN Security Council will convene to adopt
some resolution on the situation in the republic5
Strained relations with the United States after the invasion of
Iraq in 2003 and the “color revolutions’ in Georgia and Ukraine did
little to change Moscow’s attitude to the Western Balkans. An
enlarged EU driven by Brussels institutions hardly challeng
Russia’s vital security interests. The Kremlin had its eyes focused
elsewhere, indeed much cdoser to home. In the words of the
respected analyst Dmitri Trenin “[w]hen in 2003 Russia redeployed
forces from the Balkans and ‘conceded’ the Baltics-under Putin,
unlike in the Yeltsin period, there was no vociferous campaign
protesting their membership, just clenched teeth- this regrouping
was done to better consolidate Russia’s few assets where it mattered
most: in the CIS”7
Rekindling Friendship
Russia’s withdrawal proved short-lived. Negotiations concerning
Kosovo’s status as a political entity, set in motion in 2004, effectively
pulled Moscow back. The prospect of Serbia’s former province
transformed from a UN protectorate into an independent state
rekindled the Moscow-Belgrade connection. Converging interests
brought the two countries together after a period of disengagement
and neglect following Miloevis ouster. Russia chose to push back
against the West and assert the principle of territorial integrity;
Serbia, for its part, rediscovered a growingly powerful ally to aid its
cause. However, this has not grown into a patron-client relationship. Successive governments in Belgrade have pursued a policy of
balance between Russia and the West in order to clench the best
deal either might offer.
History, or a careful reading of it, may partly explain Serbia’s
choice. Since its emergence as a semi-independent entity in the
nineteenth century, Serbia had maneuvered between the Ottoman
Empire and Europe’s great powers, including Russia-recognized
as its protector after routing the Ottomans in 1828-29-and the
neighboring Habsburg Monarchy whose influence was strongly felt
in economic, social, and cultural life3 “Serbia and Russia are very
far apart and we are in friendship with the Turks,” was the message
from Prince Adam Czartoryski, the Polish-born foreign minister,
to a Serb delegation petitioning St Petersburg for support in1805
In the decades that followed, Serbia was governed by passionate
Russophiles such as Nikola Pai, prime minister from 1912 to
1918, but also by leaders lukewarm (at best) to the Tsarist state, like
Ilija Garaanin” and Prince Mihailo Obrenovi, an autocratic
Westernizer. The founder of modern Serbia, Karadjordje
(Karadorde) Petrovi, for one, had a notoriously bad relationship
with St Petersburg’s envoy, Konstantin Rodofinkin. Serbs welcomed
Russian support but were also taken aback by the patronizing tone
of pan-Slavists berating the “European poison” trickling into the
Balkans” Serbia’s rivalry with Bulgaria, another Slavic Orthodox
land and occasional client of Russia’s, complicated matters further.
Yet it was the Bolshevik revolution that opened up a real chasm.
The Kingdom of Yugoslavia, dominated by Serbs, was more than a
friend to the White Russians, who settled there in the thousands,
but not to the Soviets.” In a nutshell, the Titoist policy of juggling
ties with both Moscow and the West, one continued under
Miloevi throughout the 1990s, had an illustrious pedigree.
There was no love lost between Russia and the Serbian politicians who came after Miloevi. Having neglected the opposition
in the 1990s, Moscow was tainted by its association with the former
regime. It was, moreover, the place of exile of the deposed leader’s
closest family, including his elder brother Borislav, Miloevi’s son
Marko and, after February 2003, his wife Mira Markovi, who
escaped criminal investigation. Prime Minister Zoran indi,
leader of the Democratic Party (Demokratska stranka, DS), held
markedly pro-Western views. Educated in West Germany, he had
studied under the philosopher Jrgen Habermas and then returned
to Yugoslavia in 1989 to become one of the most popular faces of
the anti-Miloevi opposition. All the way until his assassination in
March 2003, indi’s main goal was to restore ties with the West
and end Serbia’s predicament of a pariah state in Europe. Much
later, in March 2008, right after Kosovo proclaimed independence,
the Russian TV channel Rossiia caused a stir after the journalist
Konstantin Semin remarked that the “Western marionette”‘ indi
deserved the bullet’, referring to his assassination. Officially, Russia
had made an ally of President Boris Tadi, indi’s heir at the helm
of the DS. But a Kremlin mouthpiece had no regrets to offer
concerning the slain prime minister and his political legacy.
It was not just the personal factor at play, however. Relations
with Moscow were also held hostage to the constant bickering
between Serbia and Montenegro in the common state that barely
held together all the way to 2006. It was not until January 2004 that
one Milan Roen, a Montenegrin, was designated ambassador to
Moscow, a post long occupied by Borislav Miloevi”
The one friend Russia had in Belgrade, other than ultranationalists such as Vojislav Seelj who were tainted by their association
with Miloevi’s misrule, was Vojislav Kotunica, the incoming
president of the Federal Republic of Yugoslavia.” He made his
maiden journey to Moscow on 27-28 October 2000, the first time
Vladimir Putin welcomed a Balkan leader (Miloevi was never
granted an official visit). Putin returned the compliment in June
2001, fresh from his landmark summit in Bled, Slovenia, with
President George W. Bush (who said of Putin,I looked the man in
the eye. I found him very straightforward and trustworthy”). The
last time a Moscow leader had set foot in Belgrade was Mikhail
Gorbachev in 1988.5 What drew Kotunica close to the Russians
was his unabashed nationalism. Unlike his rival indi, who saw
the way forward in working with the West on the breakaway province’s final status and extracting the best deal for Serbia, Kotunica
was intent on fighting till the bitter end. As prime minister (2004-
8), he was also hopeful that the Kremlin connection might give him
an edge against domestic political competitors. To his chagrin,
Putin was anything but forthcoming and avoided commitments.
During a meeting in Sochi in June 2004 he declined to extend
support for Dragan Marianin, Kotunica’s preferred candidate in
the imminent presidential election in Serbia.
Putin’s Russia was certainly in no mood to do Serbia any political
favors. Unpaid debt to the tune of $400 million resulted in a cut-off
of the gas supply in June 2000. As Kommersant opined, “such a tough
framing of the issue corresponds fully with Russia’s new foreign
policy concept, which prescribes thinking first and foremost
about its national interests”6 Gazprom would not agree to settle
the bill against old Soviet debts owed to former Yugoslavia. A deal
was struck only in November 2003 when Belgrade agreed to repay
$306 million, in part by commissioning Russian firms to modernize
the Derdap hydropower plant on the Danube and in part by direct
export of goods.” During an earlier visit to Moscow in February
2001, Dindi had already won another key concession-eliminating
the intermediary company Progresgas Trading linked to the former
prime minister, Mirko Marjanovi, a prominent member of
Miloevi’s entourage. For its part, Serbia opened its doors to
Russia’s Laukoil, which purchased a controlling stake in Beopetrol.
Ten years thereafter, the transaction sparked off a huge scandal
when the Anti-Corruption Council (Savet za borbu protiv korupcije), a state watchdog, accused Lukoil and the Privatization Agency
of defrauding taxpayers of 105 million by issuing themselves a loan
out of Beopetrol funds” Russia’s penetration of the Serbian
economy was anything but problem-free.
The New Battle of Kosovo
The Kosovo “status process” breathed new life into the RussoSerbian affair. Starting in 2004, the pursuit of a final settlement
restarted the Contact Group and inserted Russia into Balkan politics once again. Moscow had both a stake and the leverage. But its
comeback reflected the fact that Belgrade made a conscious choice
to seek Russian support and resist the West. It was a team effort of
sorts whereby the entire Serbian leadership-Kotunica, President
Boris Tadi (who succeeded indi at the top of the DS), foreign
ministers Vuk Drakovi (2004-7) and Vuk Jeremi
played a role at least as significant as that of the Russian Ministry of
Foreign Affairs (MFA) or the Kremli.
(2007- 2)-
In hindsight, it is striking how few people thought, at the outset,
that Russia would mount a tough challenge to the United States and
powerful EU member states over Kosovo. Putin no doubt harbored
bitter feelings about 1998-99. Yet he, so the argument went, also
epitomized the rational leader who put good ties with the West first.
The general expectation was that Russia would, begrudgingly,
stomach Western decisions, having scaled back its presence in the
Balkans. Independence or “disguised independence” seemed attainable; the only thing missing was the quid pro quo that would facilitate the consent of all parties. There were rumors that the Kremlin
was prepared to trade in its approval for concessions in other areas.0
To be sure, all members of the Contact Group had converged on
several points, even before negotiations started in Vienna in early
2006.21 First, there could be no return to the pre-1999 status quo.
Second, Kosovo’s borders were to remain unchanged, irrespective of
whether the outcome would be a state or an autonomous entity
within Serbia. Third, Kosovo was to be denied the right to merge
with neighboring countries, a thiny veiled reference to Albania.
Everyone agreed that human rights and the principle of multiethnicity had to be respected and that Prishtina was to be granted a
“European perspective.2 Moscow was happy with the mediator
appointed by the UN Secretary General Kofi Annan as well. Martti
Ahtisaari, the former president of neutral Finland, was known for
his dovish views of Russia. Together with Viktor Chernomyrdin he
had negotiated the terms of surrender during NATOS campaign in
1999, providing for Yeltsin a way out of the Kosovo quagmire (see
Chapter 1). Moreover, Russia invested more trust in Ahtisaari than
did Serbia. Throughout 2006, the Russians ignored the Serbs
complaints that the Finnish mediator was biased in favor of granting
independence to Kosovo.
No sooner had the talks started than profound differences
started surfacing. The West and Kosovar Albanians saw independence as the only viable option and thought the negotiations had to
Smoothen the way. This was Ahtisaaris view too. Russia, by contrast,
joined Serbia in insisting that the “status process” be open-ended.
Sure enough, the talks could resolve certain technical or economic
matters. But any outcome beyond broad autonomy was out of question. That left no scope for compromise. Belgrade would not accept
Ahtisaari’s plan for independence in exchange for self-rule for the
Kosovan Serbs. For their part, Kosovars and Western leaders rejected
any idea of partitioning Kosovo, which would leave Serb-majority
municipalities north of the Ibar River under Belgrades sovereignty
On paper, Serbia was against such a trade-off as well.
Putin hedged his bets right from the start. In the event that
Kosovo remained part of Serbia, Russia would score a diplomatic
victory. But should the West refuse to back down, Moscow was
ready to harness the precedent and make the most of it. The Russian
president asserted early on that the final decision on Kosovo would
have universal implications and would not be a one-off event as the
West maintained.3″ Abkhazia, South Ossetia, Transnistria or other
separatist entities across the former Soviet Union aligned with
Russia could well profit from the precedent. Putin made explicit the
linkage between Kosovo and the Commonwealth of Independent
States (CIS)-having ignored the Balkans during his first presidential term. At stake also was Russia’s role on the world stage. It had
the best of both worlds: donning the mantle of champion of inter
national law without tying its own hands or foregoing opportunities
to enhance its position. This is exactly what happened in the after
math of the 2008 war with Georgia, when Russia recognized
Abkhazia and South Ossetia’s independence, and in 2014 with the
annexation of Crimea.
To play the game, Russia focused on process, rather than
substance. Rather than get their hands dirty with minutiae to do
with territorial governance and constitutional rights of ethnic
communities, Putin, Foreign Minister Sergei Lavrov, and UN
Ambassador Vitalii Churkin (an old Balkan hand) insisted that no
solution could be imposed from outside. Belgrade and Prishtina
had to work it out themselves, The West had no right whatsoever
to twist Serbia’s arm on issues of sovereignty. No one phrased
Russia’s position better than Putin himself. At the 2007 Munich
Security Conference, where he famously blamed the United States
for undermining global security, he responded to a journalists
question on Kosovo in the following way:
What will happen with Kosovo and with Serbia? Only Kosovars
and Serbs can know. And let’s not tell them how they should live
their lives. There is no need to play God and resolve all of
these peoples’ problems. Together we can only create certain
necessary conditions and help people resolve their own problems. Create the necessary conditions and act as the guarantors
of certain agreements. But we should not impose these agree
ments. Otherwise, we shall simply put the situation into a dead
end. And if one of the participants in this difficult process feels
offended or humiliated, then the problem will last for centuries.
We will only create a dead end.35
At the tactical level, Russia opposed the notion that the Vienna
talks were pegged to a strict deadline, the end of 2006. It fought
hard on this point, creating breathing space for Serbia. The fact that
the status process continued into 2007 constituted a minor diplomatic victory for the Russians.
Of course, the extended timetable made little difference in the
end. Serbia rebuffed the Athisaari proposal for independence under
international supervision and powers devolved to Serb municipalities. Russia took its side and made it abundantly clear it would veto
the plan at the UN Security Council. Its stringent opposition ushered
in a new round of talks in August 2007, this time led by the senior
German diplomat Wolfgang Ischinger (EU), Aleksandr BotsanKharchenko (Russia), and Frank Wisner (United States). That
marked another diplomatic coup for Moscow and Belgrade as it
effectively shelved the Ahtisaari Plan. But as negotiations predictably ended in a cul-de-sac, America and the EU great powers were
left with no other option but to go for a unilateral solution bypassing
theUN Against the objections of Belgrade, Moscow, and five EU
member states,7 the Kosovar parliament declared independence on
17 February 2008.
The enduring legacy of the “status process” has been the
realignment of views on Russia in Serbia. In the 1990s, it was
the ultranationalist Serbian Radical Party that lobbied for an alliance
with Moscow. Miloevi’s approach was instrumental, turning to
the Russians when convenient and then tilting to the West. In the
mid-2000s, it was the turn of the pro-Western spectrum in Serbian
politics, personified by Boris Tadi and his cohort, to embrace
Moscow.”It was the West which pushed us to Russia then” pointed
out a Serbian diplomat and high-ranking member of DS as he
reflected on the impact of Kosovos declaration of independence in
2008.3 To him, Western powers treated Miloevi better than the
democratic opposition of the 1990s, in that UNSC Resolution 124
left Kosovo as part of the then Federal Republic of Yugoslavia. Russia,
by contrast, could be relied upon to wield its veto and aid Serbia.
The consensus in favor of working with Russia was reflected in
the declaration on neutrality voted by the Serbian parliament on
26 December 2007-a year after joining NATO’s Partnership for
Peace. The post-indi DS, Kotunica’s Democratic Party of Serbia
(Demokratska stranka Srbije, DSS),” the Radicals, and the post
Miloevi Socialist Party of Serbia (Socijalistika partija Srbije,
SPS), all backed the motion. The only outliers were the Liberal
Democratic Party (LDP) and the League of Social Democrats of
Vojvodina. Public opinion was highly supportive. “Russias prestige
is very high and President Putin’s rating is over nearly any politician
in Serbia?’ mused Finance Minister Boidar eli of DS on a visit to
Moscow in the autumn of 2007.30 Serbia’s neutrality cemented the
alliance with Russia and paved the way for numerous joint initiatives in the areas of security and defense (see Chapter 6).
Serbia firmly believed that Russia’s assistance would seriously
change the odds in the campaign to fight back against Kosovos
declaration of independence. President Tadi, narrowly re-elected
in January 2008, and Foreign Minister Vuk Jeremi, were leading
the charge. They approached the UN General Assembly, which
voted on8 October 2008 to refer the Prishtina parliament’sdeclara
tion to the International Court of Justice (ICJ). At the UN, Russia
rallied its friends and CIS allies.” Moreover, it lent Serbia full
support during the ICJ proceedings, submitting a long statement to
argue that Kosovo’s declaration breached international law2 Tadi
and Jeremi were hopeful that a favorable ruling would bring the
Kosovars back to the negotiating table. In contrast to 2006-7, now
they hinted at partition as a last resort.” That is why Serbia needed
Russia and why its pro-Western politicians, telling Brussels and
Washington their hold on power was under constant threat from
nationalists on their right, had no qualms in reaching out to
Moscow and pursuing EU membership at the same time.
But by that point Russia was weighing in on the side of secessionism. In an op-ed published by The Financial Times right after
the Georgian war, President Dmitry Medvedev reasoned as follows:
Ugnoring Russia’s warnings, Western countries rushed to
recognise Kosovo’s illegal declaration of independence from
Serbia. We argued consistently that it would be impossible, after
that, to tell the Abkhazians and Ossetians (and dozens of other
groups around the world) that what was good for the Kosovo
Albanians was not good for them. In international relations,
you cannot have one rule for some and another rule for others.4
Putin was to go one step further: in an interview fora German TV
channel, he evoked the memory of the Srebrenica genocide in
Bosnia (July 1995) and the Western doctrine of humanitarian
intervention in justifying Russia’s use of force against Georgia.3″ In
a remarkable turnaround, Russia shifted from defending the Serbs
to implicitly sympathizing with the plight of Kosovar Albanians
and Bosniaks.
The alliance with Russia failed Serbia’s expectations. The
Jeremi-Tadi game plan backfired massively when the
International Court of Justice found, by ten votes to four, that
Kosovo’s declaration did not breach general international law,
UNSC Resolution 1244, or the Constitutional Framework adopted
under the United Nations Mission in Kosovo (UNMIK),6 The
Advisory Opinion transferred the dispute from the UN to the EU,
limiting Russia’s role. Starting in March2011,direct talks under the
auspices of Catherine Ashton, High Representative for Foreign and
Security Policy, linked Kosovo to the EU’s enlargement into the
Western Balkans. As shown by the Brussels Agreement (19 April
2013), the prospect of membership has been an incentive for both
Prishtina and Belgrade to normalize relations, establish a modus
vivendi, and perhaps work out a formula for settling the dispute.
As Serbia agreed to entrust the EU with the Kosovo issue, Russia
moved to the sidelines. The country’s tilt to the East was followed
by a tilt to the West. Ironically, it was .
ticians such as Tadi who oversaw the resumption of relations with
Moscow. And it was Aleksandar Vui, a one-time prominent
member of Seseljs Radicals, who, first as deputy prime minister
between 2012-14 and then as premier, would advocate rapprochement with the Kosovars as an entry ticket to the EU.
The Money Factor
Serbia had been banking on hopes that the Russian connection
would yield profit in the economy, first and foremost in the field of
energy.Up until the mid-2000s, energy had been a sore point in the
relationship. Public-sector entities such as NIS and Srbijagas (established in August 2005 as a separate company) owed the Russians
hundreds of millions in unpaid bills. The first Ukraine gas crisis in
2006 had taken its toll on Serbia, which was overwhelmingly
dependent on Gazprom deliveries through Hungary. But now it
looked as if Belgrade could capitalize on Moscow’s interest in
bypassing Ukraine, and turn from a consumer to a transit channel
for Russian gas.
Vojislav Kotunica was particularly keen to develop energy ties,
accommodating Moscow’s demands. In late 2005 he and his energy
minister, Radomir Naumov, oversaw the insertion of YugoRosGaz
as an intermediary-as Progresgas Trading was in Miloevi’s day
Gazprom was furthermore allowed to increase its stake from 50 to
75 percent via an offshore branch-at a discount price. Critics saw
that decision as entrenching Russias dominance and inflating the
rates charged to consumers37
On 23 January 2008, just weeks before Kosovo procaimedinde
pendence, Kotunica and Tadi signed a framework agreement in
Moscow on co-operation in energy. It contained a package deal.
Gazprom Neft was to purchase a 5l percent stake in NIS, one ot
Serbia’s largest companies. Gazprom, for its part, would take over
the underground gas storage facility at Banatski Dvor and invest in
upgrading it. In return, Russia made an informal commitment that
Serbia would be included in the South Stream gas pipeline. Less
than a week beforehand, on 18 January, Putin had signed an agreement on the pipeline’s extension through Bulgaria.
The Moscow framework agreement was like a gift from heaven
to Tadi as it fell in between the two rounds of the presidential election. Already supported by the EU, he could pose as a patriot and a
friend of Russia in the uphill struggle against Tomislav Nikoli,
leading the ultranationalist Radical Party, who was ahead in the first
round. The deal spurred criticism too. The Economy and Regional
Development Minister Mladan Dinki, leader of the pro-market
G17+ party, argued that the NIS sale had to wait till after the parliamentary polls (11 May 2008). Dinki objected to the price that NIS
was sold for: 400 million amounted to a fraction of the company’s
value, he believed.3″ He demanded firm guarantees that South
Stream would pass through Serbia, rather than Romania, an increase
of annual capacity from 10-15 or even 18 billion cubic meters
(bem), and a deferral ofthe transfer of 26 percent from NIS until the
final deal on the pipeline was sealed. “Ifit is a gift to the Russians, we
should say it openly” Dinki challenged his coalition partners.
Cedomir “Ceda” Jovanovi, leader of the pro-Western LDP and onetime rising star within the DS, went a step further: Russia, in his
view, was turning Serbia into its colony. However, Tadi was simultaneously facing pressure from the Russian ambassador, Aleksandr
Konuzin, and the opposition comprising Kotunica and the Radicals.
The Serbian parliament ratified the framework agreement on 9
September 2008. Outgunned in the team negotiating the commercial terms with Gazprom Neft, Dinki stepped down as its head two
Ultimately, Serbia managed to obtain a better bargain from the
Russians. NIS’s privatization contract was signed by Presidents
Tadi and Medvedev in Moscow. Gazprom Neft promised to invest
an additional 550 million.”0 Yet Serbia had to make reciprocal
concessions. It conceded to Gazprom 51 percent in the joint-stock
company operating South Stream’s section on its territory. All other
countries involved in the project had a 50-50 arrangement with the
Russian side. In effect, Gazprom won control over the transit infrastructure to be built in Serbia, together with the Banatski Dvor
facility. Construction services related to South Stream formed a
major part of the package as well. The Serbian stretch of the pipeline was estimated at l.4 billion in 2008 but the cost had soared to
2.1 billion in July2014.4
In the longer run, the 2008 deal left a bad taste for both Moscow
and Belgrade. When Putin called off South Stream in December
2014, blaming Brussels and the EU member state Bulgaria, the
Serbian government could not help but think that the family silver
had been sold on the cheap. NIS held a monopoly on imports of
crude oil and oil derivatives (lifted only in January 2011). Gazprom
Neft retorted that Serbia had got a good deal. NIS was heavily in debt,
employed far too many people, had close to five million citizens as
minority shareholders, and a number of its assets in Serbia and across
former Yugoslavia were subject to legaldisputes.i Gazprom had put
up money to overhaul antiquated facilities, including the refinery at
Panevo degraded by the NATO airstrikes of 1999. However, all these
improvements were a far cry from the ambitions to turn Serbia into
a transit corridor for Russian gas and reap a bonanza. South Stream
had paid off only in part. Srbijagas, overseen since October 2008 by
the deputy chairman of the Socijalistika partija Srbije, Duan
Bajatovi, had spent 30 million on assorted contracts.”
Energy links helped Russia make further inroads into the Serbian
economy. In 2012-13, two major Russian lenders, Vneshtorgbank
(VTB) and Sberbank, started operating in Serbia.” Occupying
respectively the eleventh and twenty-fifth position in the rankings
of Serbian banks in terms of the size of assets, the subsidiaries in
question are not big players on the local market. Yet they do benefit
from political connections. In 2012, shortly after entering Serbia,
VTB administered the sale of government eurobonds worth
$750 million” However, the presence of two financial institutions
targeted by the Western sanctions has given Serbia additional reason
for refusing to align with the EU. Serbia benefits from a free-trade
agreement (FTA) with Russia dating back to August 2000, when
Miloevi was still in power. Yet it excludes key export items, such as
cars-manufactured at the Kragujevac factory acquired by Fiat in
2008-and certain agricultural products.”Although Serbia’s exports
picked up as a result of the counter-sanctions imposed by Moscow
on the EU trade remains unbalanced because of the large-scale
imports of Russian oil and gas. Serbia’s deficit in 2013 had risen to
E610 million.
Since the inception of the global economic crisis, successive
Serbian cabinets have courted Russia for financial assistance too.
During his visit to Belgrade in October 2009, President Medvedev
offered budgetary aid and investment to the tune of l billion. Yet
all Russia could disburse in 2013 was 344 million in the form of a
loan. Still, Moscow manages to get the maximum bang for its buck.
A poll in June 2014, commissioned by the Serbian government,
found that 47 percent of people believed Russia was ahead of all
other donors, where in fact it trails behind the EU, the United States,
and even Japan.”
The push to attract further Russian investment, very prominent
under the Serbian Progressive Party (Srpska Napredna Stranka,
SNS) that came to power in 2012, has not been particularly successful
either. Gazprom has refused to swap debt for shares that Srbijagas
holds in Petrohemija (Panevo), where NIS/Gazprom Neft holds
12.7 percent of the shares. Large Russian firms like Vimpelcom and
Aeroflot decided not to bid for strategic assets such as Telekom
Srbija and the national air carrier JAT (rebranded Air Serbia after its
purchase by the Abu Dhabi-based Etihad). Contrary to speculation,
Moscow money has not come to the rescue of loss-making stateowned enterprises such as the utility company EPs (Elektroprivreda
Srbije) and Serbian Railways. The October 2015 dismissal of the
head of Russian Railways, Vladimir lakunin, one-time confidant of
Putin’s and frequent visitor to Belgrade, has slashed hopes for the
overhaul of Serbian Railways with help from Moscow. As much as
Prime Minister Aleksandar Vui has struggled to cash in on good
political ties, Russia has not been particularly forthcoming. Buffeted
by international sanctions and plummeting gas prices, Moscow has
not demonstrated a particular appetite to pour money into Serbia in
recognition of its geopolitical significance.
A Friend Lost?
There is hardly any other place in former Yugoslavia where proRussian sentiments are as deeply rooted as Montenegro. “There are
300 million of us together with the Russians” (“Nas i Rusa trista
miliona”) goes a familiar saying in the minuscule republic whose
actual population is only a notch over 600,000. From St Petersburg’s
subsidies to the Prince-Bishops of the Black Mountain, to princesses marrying into the Romanovs, to Montenegrin communists
remaining loyal to Stalin and opposing Tito in 1948, links between
Montenegro and Russia have spanned decades and even centuries.”
These legacies mattered little in the 1990s when Moscow ignored
Podgorica and channeled relations exclusively through Belgrade
dealing with the leader of Montenegrin extraction, Slobodan
Miloevi, nonetheless. It all changed right before the Kosovo war.
President Milo ukanovi had already taken a turn towards the
West, distancing himself from Miloevi. This brought ukanovi
onto Russia’s radar. He was in Moscow in May 1998, days before
defeating Belgrade’s ally Momir Bulatovi in the parliamentary
elections, and held talks with Primakov. Following NATO’S inter
vention, in August 1999, the Montenegrin president was welcomed
by Prime Minister Sergei Stepashin and Foreign Minister Igor
Ivanov”Moscow’s bet on ukanovi isentirelyjustified”‘ observed
Kommersant’s Balkan correspondent Gennadii Sysoev. “Not only
because he is a democrat and reformer, as the Russian political elite
counts itself. Having been for many years Russia’s main partner in
the Balkans, Miloevi behaves with growing insincerity towards
Moscow. Dukanovi is not pledging Moscow eternal love but
offering mutually beneficial projects:”0
Ties blossomed during the 2000s. In January 2001, Rusia opened
a General Consulate in Podgorica. Dukanovi saw Putin during a
private visit to Moscow in 2004, and Russia was quick to recognize
Montenegros independence after the referendum on 21 May 2006.
In a sense.politics had a hard time catching up with already thriving
economic ties. Montenegro became early on a favorite holiday destination for Russians. Following the lifting of the visa regime in 2008,
the share of visitors from the Russian Federation reached 20-30
percent of the total.5t Russians were said to take the lion’s share of
foreign-owned commercial and residential properties, especially in
trendy coastal spots such as Budva or Herceg Novis* Investors
included prominent personalities such as (then) Moscow’s mayor
luri Luzhkov, a friend of ukanovics, who has been linked to a
“Russian Village”‘ a vacation community above the Adriatic town of
Sveti Stefan33 The Russian Embassy estimated the number of
Russians holding permanent residency in Montenegro at 7,000.34
Suspicions of money laundering through the real-estate sector have
always been rife. Putin’s statement from 2006 that Russians had
invested 2 billion was in contrast with the 135 million reported by
the Central Bank of Montenegro.
Montenegro attracted Russian investment in the industrial
sector too. In 2005, the tycoon Oleg Deripaska purchased a controlling stake in Kombinat Aluminijuma Podgorica (KAP), an
aluminium smelter. Considered Russia’s richest man and a protg
of the Kremlin, the billionaire negotiated directly with ukanovi,
at that point serving as prime minister. No formal state body took
part in the deal that had been discussed during Eukanovi’s visit
to the Kremlin in 2004. Built in the 1970s, KAP accounted for
20 percent of Montenegro’s GDP and a full 80 percent of its exports.
The Dan newspaper remarked that Russia could well end up
owning half of the Montenegrin economy if Deripaska’s business
empire would pass into state ownership like Mikhail Khodorkovsky’s
Yukos.S5 Such statements were to be taken with a grain of salt. Even
with KAP, Russia came seventh in the list of investors, with Slovenia
topping the ist. The KAP deal was, in fact, dwarfed by the sale of
the national telecommunication company to Norway’s Telenor in
2004 and of Jugopetrol to Hellenic Oil.
Subsequent developments strained relations between the tycoon
and Montenegrin authorities. The 2008 economic crisis resulted in
a rapid decline in aluminium prices. KAP became dependent on
rescue funds from the government.56 Deripaska was forced to leave
when the company went bankrupt in 2013. He ended up filing a
100 million lawsuit against the state of Montenegro.7
The KAP imbroglio drove down Russia’s stock in Podgorica at a
moment when the country had made decisive steps towards not
only the EU but also NATo. Accession negotiations with the EU
kicked off in the summer of 2012. In December 2015, Montenegro
received an invitation to join NATO (having been implementing a
membership action plan since 2009). Despite polarized public
opinion, Dukanovi made a choice in favor of the West. In 2013,
Montenegro shunned Russian requests to use the port of Bar as a
logistics center for its navy in the Mediterraneans In the spring of
2014,the country sided with the Western sanctions against Rusia,in
clear contrast with Serbia.”My mother is Montenegro, not Russia as
with (Serbian President Tomislav] Nikolic.”These wordsofPresident
Filip Vujanovi reflect the effort of the Podgorica governing elite to
rebrand their country from a Russian enclave to an outpost of
Western influence. In April 2015, Montenegro changed its legislation
making the acquisition of temporary residence more difficult for
real-estate buyers.
Montenegro became a battleground in the tug of war between
Moscow and the West. In late October 2015, mass protests against
Montenegro’s entry into NATO and corruption in high places swept
through Podgorica. ukanovilinked the demonstrations to”nationalist circles in Serbia and Russia” meddling in the country’s internal
affairs. He implied the protest’s leaders, such as Andrija Mandi (of
the New Serb Democracy Party), were on the Kremlin’s payroll.
Although denied by both Moscow and the protestors, such allegations are not widely off the mark. In June 2016, Mandi signed a
co-operation agreement with Putin’s United Russia, along with other
leaders of pro-Russian parties from around the Balkans. After NATO
invited Montenegro to join in December 2015, he called for a referendum on membership, a position advocated by the Russian Ministry
of Foreign Affairs In actual fact, polarization has benefited
Dukanovi. By pointing at Russia, Montenegro’s undisputed master
since 1998, he has been able to deflect attention away from allegations to do with the abuse of power and links to organized crime.
Passions boiled over in October 2016 when the Montenegrin
authorities accused Russia of taking part in a conspiracy to stage a
military coup spearheaded by a retired general who was formerly
the head of the Serbian gendarmerie. According to reports, Serbia
expelled several Russian citizens, which made Nikolai Patrushev,
head of the Russian Security Council, rush to Belgrade to limit the
damage caused by the scandal. In the meantime, ukanovi
declared he would step down as prime minister, explaining his deci
sion with pressure from Moscow. In Belgrade, Prime Minister Vui,
who initially talked down the whole story as a propaganda stunt by
the Montenegrins, admitted “foreign services, both from the West
and from the East” were plotting to assassinate both Dukanovi and
himself. In February 2017, Special Prosecutor Milivoje Katni
accused the Russian government, as opposed to simply “Russian
nationalist structures’ of orchestrating the alleged coup attempt.
Investigative journalists have pointed in the direction of Konstantin
Malofeev, a Russian tycoon who sponsored the separatists in eastern
Ukraine at the outset of the war.0 Whether this murky affair was a
case of a botched Russian-backed conspiracy, a plot by rogue security operatives intent on selling it to Moscow, or indeed a false-flag
operation, it did highlight the extent to which Russia had become a
critical player in the domestic politics of both Balkancountries.
“Republika Srpska is a state, and Russia is its ally”s2
In the Western Balkans, it is Republika Srpska that comes closest to
being a Russian client. Economic and political relations have boomed
since Milorad Dodik assumed power in the entity within Bosnia and
Herzegovina, first as prime minister (2006-10) and then as president.Moscow’s seat at the Steering BoardofthePeace Implementation
Council (PIC) overseeing the Dayton Accords has provided ample
opportunities for Russia to balance the West. It has been an
indispensable ally for Dodik in resisting one push after the other
by the EU or the United States to centralize authority in Bosnia.
In the early days, Russia’s relationship with the West was not
adversarial, though it was far from easy. As already mentioned,
Moscow went along with the introduction of the so-called Bonn
powers in December 1997. The PIC invested the Office of the High
Representative (OHR) with the right to sack and override decisions
of elected officials, in the interest of peace and stability. Ironically
the first time the extra prerogatives were used by Carlos Westendorp
was when he reappointed Dodik, then a favorite of the West, as
prime minister of RS in 1999. He was certainly preferable to the
affiliates of Radovan Karadi’s Serbian Democratic Party. It was
only a decade later that Moscow argued that the use of the Bonn
Powers was unjustified and represented part of the problem, rather
than the solution, to Bosnia’s constitutional conundrum.” Last but
not least, Russia endorsed Bosnia’s ambitions to join the EU. As late
as 2008, the Russian Ministry of Foreign Affairs maintained that
was the best way forward for the country following thewar:
The confrontational turn in Russian-Western relations during
Putin’s second term had a direct impact on Bosnia. By 2007, Moscow
was heavily criticizing the broad use of the Bonn Powers by the
OHR that was justified by the need to break the institutional deadlock and advance EU integration. Russia was in favor of handing
more power to Bosnian politicians and replacing the OHR with a
EU special representative with a narrower mandate.5 However, in
February 2008, the PIC resolved to extend the OHRs term indefinitely, listing comprehensive constitutional reform as the key
precondition for winding up the position. Russia went along with
the decision yet it has been maintaining ever since that the time is
ripe for the Western viceroy to pack his bags and leave.6
Russia has aligned itself with the RS leaderships effort to shore
up the autonomy of the Serb-dominated part of Bosnia. Moscow
acts as a spoiler, providing Dodik with political cover as he resists
the West. It kept a low profile in the spring of2011 when he tried to
hold a referendum on the secession of RS from Bosnia, the worst
crisis since the one the Dayton Accords defused through
the intervention of the EU foreign policy chief Catherine Ashton.
But in 2014-15, at the height of the Ukraine conflict, Russia took a
series of defiant steps. In November 2014, it abstained in the UN
Security Council vote to prolong the mandate of EUFOR Althea.
The message was not difficult to decipher: the Russians could
have blocked the EU peacekeeping mission had they wanted. Then,
on 8 July 2015, Russia vetoed another resolution to mark the anniversary of Srebrenica by disputing the use of the term’genocide”
More to the point, Russia intervened on Dodik’s behalf in RS’s
domestic politics. In September 2014, Putin received him at the
Kremlin, a direct sign of support in the run-up to the legislative and
presidential elections in Republika Srpska. Dodik was reconfirmed
in office, several thousand votes ahead of his competitor, Ognjen
Tadic. He used the visit to Moscow to restate support for South
Stream, at that point a merely symbolic act given the project’s imminent cancellation. “Our support for Russia is unwavering’ Dodik
declared. “We are a small community but our voice is heardloudly
On election day, 12 October, Dodik was spotted in Banja Luka with
the notorious Russian businessman Konstantin Malofeev (see
above), “the Orthodox Oligarch,” patron of the activists and paramilitaries spearheading the “Russian Spring” in the Donbas, a
prominent presence on the West’s list of sanctions and well known
to Moscow’s military intelligence, GRU.
Moscow backed Dodik in his conflict with Sarajevo and the
international community. In November 2015, for instance, he threatened a plebiscite on the OHRs power to pass legislation and on the
authority of Bosnia’s Constitutional Court. Ambassador Petr
Ivantsov refused to join the rest of the PIC in issuing a tough statement or threatening sanctions. While even Serbia spared no criticism of Dodiks brinkmanship, Russia did not change tack, allowing
him to stick to his guns for long enough. Still, Moscow did not treat
the Crimea referendum (“legitimate and legal” according to Dodik)
as a precedent for RS secession. Foreign Minister Lavrov insisted
that the revision of Dayton represented a “red line”
Push came to shove on 25 September 2016, when RS voted overwhelmingly in a referendum on “the state holiday” (9 January, or St
Stephen’s Day, the date Bosnian Serbs proclaimed their “state” in
1992) in defiance of a ruling by the Constitutional Court as well as
of Serbia. On the occasion, Russia stood by Dodik who went all the
way to Moscow to see Putin three days ahead of the plebiscite.
Although the Russian leader said nothing of RS’s secession aspirations, Dodik had enough wind in his sails. The “rally behind the flag”
effect helped him win the local elections (2 October), deflecting the
widespread allegations of corruption harnessed by his opponents.
Dodik’s alliance with Russia has a strong economic dimension
too. In February 2007, the Russian state-owned oil company
Zarubezhneft paid 121.1 million for Bosnia’s sole refinery at
Bosanski Brod, the motor-oil plant and filling stations’ operator
Petrol. They were sold directly rather than through an opentender.
Dodik advocated this decision along with the newowners’commit
ment to keep jobs and pay overdue salaries in the heavily indebted
firms. The next stage was RS’s inclusion within the South Stream
project when Gazprom accepted, in September 2012, to build an
offshoot pipeline from Serbia along with two gas-fired power
stations. When Vladimir Putin called off the pipeline in December
2014, Dodik lashed out at the EU for depriving RS of 2 billion in
investment. At this point, Russia appeared as a guarantor of RSs
financial stability. In 2014, the Serb entity received 72 million in
direct budgetary support from Moscow, having been unable to fall
back on the IME*”
It is the same familiar story. Expending minimal resources,
Russia has carved out a niche of influence right in the middle of a
country whose stability continues to be underwritten by the EU and
the United States. The alliance with RS gives the Kremlin a valuable
pressure point against the West. Banja Luka blocks Bosnias acces
sion to NAT0, demanding it be approved by a referendum.” Having
frustrated Russia on so many occasions in the 1990s, the Bosnian
Serbs have emerged as its most trustworthy partners in the Western
Balkans, ahead of neighboring Serbia or Montenegro. As far as
Russia is concerned, by applying low-intensity spoiler tactics, it has
time and again put a spanner in the works of the West, stopping
short of triggering a major crisis. What is more, it has framed the RS
referendum as consistent with the spirit and letter of the Dayton
Accords, rather than a challenge. So, at least on paper, the Russians
remain committed to the political status quo.
Moscow’s actions have been followed with concern by the
Bosniak community. “Russia has been supporting for some time
everything that comes from RS” lamented Bakir Izetbegovi, the
Bosniak member of the common states tripartite presidency.”The
support of a political gamble which puts into question all institutions created by the Dayton Peace Agreement will harm everyoneBosnia and Herzegovina, the RS, the region, and finally Russia”
By contrast, the Bosnian Croat leadership has maintained good
relations with the Russian Embassy-very much in accordance
with the policy of playing off Serbs and Bosniaks in order to extract
concessions. In February 2017, Dragan Covi, the Croat member of
the presidency, spoke of the need to nurture ties with the Russians
and, together with Ambassador Ivantsov, called for the equality
of all communities.2 Covi’s conciliatory tone contrasts with the
concerns over Russia’s moves in Zagreb (see below).
Russian policy in Bosnia has been followed closely in key
Western capitals. In November 2014, Britain and Germany
launched a diplomatic initiative to speed up accession to the EU.
Bosnia’s Stabilization and Association Agreement would come into
force even without the passing of constitutional amendments
required byBrussels.7 That in turn made it possible for the Bosnian
government to apply for membership in February 2016. To show
her support, Chancellor Angela Merkel made a stopover in Sarajevo
during a Balkan tour in July 2015. The visit came the day after
Russia vetoed the Srebrenica resolution (proposed by the UK) at the
UN Security Council. In February 2013, the EU ambassadors
decided to cut ties with Dodik to sanction him for his disruptive
actions. The RS president had previously been denied a U.S. visa.
Placed under formal sanctions in January 2017 over the referendum
he had convoked, Dodik was prevented from attending the inauguration of President Donald Trump. In short, relations between
Russia and the West regarding Bosnia are at one of their lowest
points since the 1990s-if not the lowest.
Luring the Rest
Russia has managed to cultivate ties with Croatia, Macedonia, and
Albania, traditionally seen as forming a pro-Western bloc within
the region. It did not object to Zagreb and Tiranas accession to
NATO in April 2009, a foregone conclusion at that point. Similatly
Russia responded with indifference to the EU’s expansion. Unlike
the countries of the “near abroad” and even Montenegro, whose
entry into the Atlantic Aliance did cause a stir, Croatia and Albania
did not come into the spotlight as far as Russia’s tenuous relations
with the West were concerned. One factor was certainly the timing
of NATO’S Balkan enlargement. It coincided with the policy of reset
enunciated by the Obama administration and the thaw between the
United States and Russia. Russia’s ties to Slovenia, which is formally
not a part of the Western Balkans but certainly is a cornerstone of
the “Yugosphere’, are nothing short of cordial.
Croatia’s interest in Russia grew exponentially in the 2000s, all
the way up to the Ukrainian crisis of 2013-14. Although President
Franjo Tudman oversaw the conclusion of a friendship and cooperation agreement during a 1998 visit to Moscow, it was his
successor, Stjepan “Stipe” Mesi (in office 2000-10), who invested
heavily in the expansion of economic contacts with theRussians
From his first trip to Russia in April 2002 onwards, Mesi lobbied for
assorted investment and trade deals-starting with the sale of the
ironworks in the town of Sisak to Mechel, a conglomerate based in
the industrial city of Cheliabinsk. A decade and more later, as an
ex-head of state, Mesi was still a frequent visitor to Moscow, arguing
for continued contacts, even as the EU sanctions took their toll on
bilateral trade. Back in the days when he was president, the veteran
politician, whose career dated back to the Yugoslavia of the 1960s,
sought to position Croatia in Russia’s energy schemes covering
Southeast Europe. Mesi welcomed Putin as the guest of honor at a
summit in June 2007 where Gazprom unveiled the South Stream gas
pipeline. The Russian president used the Zagreb energy forum to
pour praise on his hosts by stating “it’s a confirmation of Croatias
international authority” Croatia officially joined the project in
March 2010 in Moscow when Prime Minister Jadranka Kosor,ofthe
center-right Croatian Democratic Union (Hrvatska Demokratska
Zajednica, HDZ), initialled a state-to-state agreement with
Putin, then also prime minister” Another venture for which Mesi
lobbied was the intended physical interconnection of the Druzhba
oil pipeline with Adria, a pipeline that has been in operation since
1989. Known initially as Jugoslavenski Naftovod (Yugoslav Pipeline
or JANAF), the Adria pipeline links the port of Omialj (on the
island of Krk) all the way to the refinery at Panevo, Serbia. Once
connected to the Druzhba pipeline, it could reverse the flow and
start shipping Russian oil to the Adriatic. In December 2002, Croatia
signed an agreement with Russia, Belarus, Ukraine, Slovakia, and
Hungary, which however failed to win parliamentary endorsement
in Zagreb.
Even if ultimately neither the South Stream offshoot through
Croatia nor the Druzhba-Adria project made significant headway,
they paved the way fora cross-party consensus that it was important to work with the Russians. When Kosor was running against
Mesi in the 2005 presidential election, she campaigned against
Druzhba-Adria on the grounds that the limited financial returns
from the project failed to offset the environmental risks. But during
her 2010 visit to Moscow, she had converted into a proponent
despite the negative environmental impact assessment and the vocal
opposition by groups such as the Croatian chapter of the secular
Franciscan Order.A new round of talks took place in 2012, involving
the Russian firm Zarubezhneft, which showed an interest in buying
a stake in the Adria pipeline.75 Kosor’s U-turn suggested that as
Croatia entered the EU as its twenty-eighth member (July 2013), it
effectively joined the club of those within the Union who viewed
Russia as a source of opportunities, not a hostile power. In that
sense, it was no different from Central European nations such as
neighboring Hungary, the Czech Republic, and Slovakia. Or indeed
Serbia, which was widely perceived as Russia’s main ally in former
Yugoslavia. The oil and gas diplomacy pursued by Moscow in the
2000s delivered a partnership with Croatia, thereby diversifying
Russian connections in the region.75
Russian money made inroads into the domestic economy.
Lukoil, already established in other parts of Southeast Europe,
entered the country’s market in 2008 and had developed a network
of fifty-two filling stations by the following decade. When the
Croatian government fell out with the Hungarian company MOL,
which held 49.1 percent in the national oil company INA after
a controversial privatization deal finalized in 2009, Rosneft or
Gazprom Neft were rumoured as a possible replacement7″ As
recently as 2016, Russia’s ambassador to Croatia, Anvar Azimov,
maintained that the offer was still on the table. He intimated Russian
investors could also bid for 25 percent of Croatia’s national electricity company, Hrvatska elektroprivreda, which was up for sale.a
Rosneft and Gazprom Neft took part in the tender for offshore
exploration licences in the Adriatic, though they had no success.
Denser economic links have had political ramifications. In the
summer of 2016, Nacional broke the story that the HDZ, a senior
partner in the governing coalition, had received a donation of
350,000 from a murky Russian foundation.”” The investigation,trig
gering the downfall of HDZ chairman Tomislav Karamarko, was
nothing short of an embarrassment. The scandal gave extra reasons
to President Kolinda Grabar-Kitarovi (HDZ), a former foreign
minister and ambassador to NATO with strong links to the United
States, to take a hawkish line on Russia. In November 2016, she
accused Russia of waging “hybrid warfare” in former Yugoslavia,
singling out the recent referendum in Republika Srpska as a case in
point. Yet there were other prominent players in Croatian politics and
the economy eager to continue searching for opportunities. The
colorful mayor of Zagreb, Milan Bandi, touted his links to his
Moscow colleague, Sergei Sobianin. And one of Croatia’s foremost
business people, Ivica Todori-CEO of Agrokor, the largest private
firm in the country-tookloans from Sberbank (operating in Croatia
since 2013) and Vneshtorgbank totaling 1.3 billion by early 2017.
As Agrokor faced financial difficulties and Sberbank injected an
additional 300 million in March, rumors sprang up that the Russian
creditors might take over the struggling company.” While the
Western sanctions halved bilateral trade turnover (about l.8 billion,
heavily skewed in favorofhydrocarbon exports from Russia),links at
the level of political and business elites seem to be strong.
Croatias overall pragmatic perspective on relations with Russia is
more than matched by neighboring Slovenia, a member of the EU
and NATO since 2004. The richest successor state of former
Yugoslavia has put extensive efforts into developing business links
with Moscow. In March 2011, it officially joined the South Stream
pipeline project during a visit by Putin (then still serving as prime
minister) to Ljubljana. Russia is Slovenias most important non-EU
trading partner and, unlike other countries in Central and Eastern
Europe, Slovenia runs a surplus. In the first ten months of 2016, it
exported goods (pharmaceuticals, machinery, etcetera) and services
worth 586 million, while imports (mostly energy) were worth 191
million From the time of the 2001 Bled Summit between Putin and
George W. Bush, Slovene leaders have tried to position their country
as an intermediary between Russia and the West. In July 2016,
Slovenia welcomed Putin-nominally on a visit to consecrate a
monument commemorating the tragic death of 100 Russian POWs
held in Austro-Hungarian captivity in 1916. Speaking at the Russian
chapel some 1,600 meters up in the Julian Alps, Putin praised
the Slovene people’s “caring attitude to … shared history”‘ while
the Sputnik Agency did not miss an opportunity to extol the common
Slavic heritage binding the two nations. “Not every Eastern European
nation has been infected with the virus of Russophobia?’ stated
Aleksei Pushkov, chairman ofthe Duma’s Foreign Affairs Committee.
“Monuments to Russian soldiers have been destroyed in Poland.
Slovenia has just erected one” Naturally, the Slovenes had more
down-to-earth motives in courting Russia. In February 2017,
President Borut Pahor signed two co-operation agreements in
Moscow, saying eleven business deals were in the pipeline as well.
Pahor came under fire from Janez Jana, leader of the center-right
Slovenian Democratic Party. But, to be fair, when Jana served as
prime minister (2004-8; 2012-13), he himself had worked to
strengthen economic ties with Russia and paid visits to Putin.
Similar to its former Yugoslav partners, Macedonia has scrambled
to get a piece of the action too. In July 2013, Prime Minister Nikola
Gruevski negotiated a branch away from the main trunk of the pipeline to his country, with Russia agreeing to accept Soviet-era debt (42
million) as Skopje’s contribution to the joint stock company that
Macedonia and Gazprom were planning to set up. Gruevski trumpeted the deal as a shining success. A Greek veto had prevented
Macedonia’s accession to NATO and membership talks with the Eu
but now Macedonia had discovered a new partner in Moscow. Fresh
money would be pouring into the economy, in the footsteps of energy
firms like Lukoil and Sintez already present.” Last but not leas
cultural links have been on the rise. In 2014, the Moscow Stute
University delivered an honorary doctorate to President Gjorge lvanov
The Skopje government has been harboring hopes that the Russan
Orthodox Church might facilitate the recognition of its Macedonian
opposite number, however slim the prospects. All in all, Gruevski and
company have pursued a policy that differed little, whether in form or
substance, from the course taken by neighboring Serbia.
Russia’s relations with Albania have lagged behind. That is not only
because of the country’s accession to NATO, its staunchly pro-Western
orientation, or indeed the dispute over Kosovo’s independence, but
also due to the fact that economic ties are underdeveloped. Albania
does not import gas, indeed it consumes low volumes. Stil, there have
been some developments. President Alfred Moisiu (in office 2002-7),
a Soviet graduate from the 1950s, was a guest of honor at the anniver
sary Victory Day parade in Red Square on 9 May 2005. Russian
commentators did not miss the fact that Moisiu belonged to the
Orthodox Christian community in Albania. In 2011, Tirana for its part
hosted a Russian cultural festival. However, the crisis in Russia’s rela
tions with the West after 2014 effectively put an end to thismomentum
The Albanian government used the Russian threat, directed at the
broader region rather than the country per se, to boost its pro-Westen
credentials. “There are third-party players who can benefit from gaps
within the [European] Union. Im talking about Russia and about
radical islam” opined Prime Minister Edi Rama in aninterview for the
Frankfurter Allgemeiner Zeitung in November 2016.5
Ukraine Hits the Balkans
The Ukraine crisis put on display the leverage that Moscow had
built in the Western Balkans over a decade. Serbia, Macedonia, and
Bosnia and Herzegovina refused to support the EU. Some pro
government media in Belgrade, Skopje, and Banja Luka echoed
Moscow’s line on events in Kyiv, Crimea, and the Donbas (“fascist
takeover”Banderovites “U.S.-directed putsch” etcetera). Reports
spread ofSerbian volunteers in the breakaway Donetsk and Luhansk
People’s Republics, as well as of Croats fighting on Kyiv’s side.
Commentators berated the cancellation of South Stream and the
billions lost as a result of the geopolitical contest between Russia and
the West. Looking for compensation, governments lined up to join
TurkStream, the new pipeline project announced by Putin. Moscow
could demonstrate to the West that Serbia and Macedonia still
counted on its friendship, similar to EU member states critical of the
policy of isolating Russia such as Greece or Hungary.
The Western Balkans proved a fertile ground for Russian “strategic communications” The Kremlin-friendly media painted antigovernment protests erupting in Macedonia in the spring of 2015,
prompted by revelations of corruption and election rigging, as yet
another “color revolution” instigated by the West.85 Conspiracy
theorists linked demonstrations to a plot to derail TurkStream. As
in Ukraine, the false fighters for democracy were causing chaos,
instability, and state collapse. After the armed clashes between the
country’s security forces and Albanian radicals in the city of
Kumanovo (May 2015), Foreign Minister Lavrov accused NATO
members Albania and Bulgaria of plotting to partition Macedonia.”*
Speaking from Belgrade, Lavrov blamed the EU for condoning
separatism and the push towards Greater Albania.” The Albanians
in turn blamed Russia. In November, Hashim Thai, deputy prime
minister of Kosovo and sometime face of the Kosovo Liberation
Army, identified Russia as one of the three great threats to the
Balkans, on a par with Islamic radicalism and the refugee crisis.
The protracted Macedonian crisis showcased Russia’s capacity to
insert itself in the troubled spots ofthe Western Balkan. By July 2015,
all major parties had made a commitment to hold early elections, an
achievement for the EU Enlargement Commissioner Johannes
Hahn who stepped in as mediator. Yet Moscow continued to snipe
from the sidelines. The Ministry of Foreign Affairs, together with
government-controlled media such as the TV news channel RT
(formerly known as Russia Today) and Sputnik, continued following
the deepening political crisis in Macedonia in 2016-17. When anti.
corruption protesters poured into the streets of Skopje in April-July
2016, they took the side of the governing center-right party VMRO.
DPMNE and Prime Minister Gruevski. They latter portrayed
Macedonia’s “Colorful Revolution” (Sarena revolucija), a wave of
street protests between April and July 2016, as a blatant case
of Western interference. Twice postponed, the early elections finally
took place on 11 December 2016 but resulted in astalemate.Gruevski
failed to put together a coalition, unable as he was to find a compro
mise with Albanian parties. In March 2017, when President Gjeorge
Ivanov declined to hand the opposition Social Democrats a mandate
to form a cabinet (in violation of the constitution), Russia again
ratcheted up its rhetoric. A press spokesman from the Ministry
of Foreign Affairs deplored “[the] attempts, which are actively
supportedbyEUand NATOleaders…to make Macedonians accept
the Albanian platform” (a set of demands Albanians put forward
as a price for supporting the Social Democrats).s5 The statement
signaled support for Gruevski, who rallied his own supporters,
ostensibly to defend the nation that was facing yet anotherexisten
tial threat. As in Bosnia, Russia was weighing in on the side of forces
ready to push back against the West-in this case the European
Commission, the High Representative for Foreign and Security
Policy Federica Mogherini, and the American Embassy in Skopje. In
addition, it was magnifying the ethnic dimension of the crisis, which
was triggered originally by the release of tapes indicating the abuse
of power and corruption by Gruevski and his entourage.
Macedonia was therefore a classic case study of Moscow’s disruptive tactics in former Yugoslavia: taking advantage of indigenous
problems to score points against the Europeans and Americans and
thwart their efforts to steer events on the ground. Yet, one should not
lose perspective. After all, it was not Lavrov, let alone someone higher
up the chain of command in Moscow, who addressed the tussle in
Macedonia. For all the hype around Russian interference amongst
Balkan watchers, the former Yugoslav republic did not feature prominently in the Kremlins list of external priorities. Lastly, Russia could
do little to prevent the opposition coming to power in May 2017.
The rupture between Moscow and the West complicated Serbia’s
balancing act. President Nikoli took a staunchly pro-Russian line
and was the only European leader from outside the Commonwealth
of Independent States to attend the Victory Day parade in Red
Square on 9 May 2015. In the meantime, Foreign Minister Ivica
Daic.presidingover the Organization for Security and Co-operation
in Europe,planned to travel to Kyiv, together with a Serbian military
band, canceling the trip at the very last moment. Prime Minister
Vui cultivated connections with the United States, meeting with
Vice President Joe Biden in September 2015. “Serbia is neither a
little Russia’ nor a little America. It makes its own decisions,’
declared Vui.” Belgrade proceeded with its defense co-operation
with Moscow, while upgrading. often under the radar, relations with
NATO. Vuis policies came under fire domestically. In the run-up
to the parliamentary elections in Serbia (26 April 2016), a wave of
mass demonstrations called for a referendum on NATO membership. Hard-line parties, supporting canceling EU accession and
aligning fully with Moscow, received a boost at the pols” Vui and
SNS were given a first-rate opportunity to play the part of “moderates”pro-Europeans,” and “reformers.”The tactic of using the threat
posed by Russia to rally support in the West has been widespread
across the Balkans. In a more subtle and non-confrontational way,
Vui has been following the example of his fellow politicians elsewhere in the Balkans, notably Milo ukanovi, Edi Rama in Albania,
Hashim Thai (who, in early 2017, accused Serbia of hatching a
“Crimean scenario” in Northern Kosovo), the Croatian President
Kolinda Grabar-Kitarovi, and others.
In the following episode, Vui claimed the nomination as
his party’s candidate in the presidential elections (2 April 2017). The
staunchly pro-Russian incumbent Tomislav Nikoli, the founder of
SNS, was sidelined. Having toyed with the idea of running a separate
bid, Nikoli resolved to step down. Vuis triumph in the intraparty power struggle suggests that the moderate, “neo-Titoist”
line in Belgrade is set to prevail over the hardcore pro-Moscow
position championed by Nikoli and the ultranationalists to the
right of SNS.
Following a brief absence, Russia has succeeded in inserting itselr
in the Western Balkans: by co-opting governments, forging alli.
ances with political leaders, appealing to domestic populations
spreading its story about the wars in Ukraine and Syria far and
wide. For a good part of the 2000s, Moscow did not use its clout to
balance the EU and the United States, accepting that former
Yugoslavia lay squarely within their sphere of influence. Ukraine
changed that. Now the Kremlin’s message is: if you interfere in our
backyard (Ukraine, Moldova, Georgia, etcetera), then we can and
will most certainly do the same in yours. With the abrupt end of the
South Stream project, Russia may have lost its most potent trump
card. However, it has become increasingly adroit in penetrating
domestic politics and wielding its soft power (discussed at some
length in Chapter 8).
The post-Yugoslav states and their leaders are far from passive
objects of Russian policies, much less Moscow’s pliant instruments.
The record shows they have been hedging their options, never putting
all their eggs in one basket. EU membership remains the ultimate
destination, yet this does not rule out engagement with Russia driven
by the pursuit of political gains and economic profits. Putin’s standoff
with the West certainly made fence-sitting more difficult and costly
Yet Serbia continues to practice it as before, as does Macedonia. By
contrast, other countries-Albania, Montenegro (or rather its government), and Kosovo have gone in the opposite direction-amplifying
the Russian threat to reconfirm their links to the EU and NATO and
make political mileage. The most serious concern, therefore, is that
the soaring competition between Russia and the West may reinforce
the alarming trend towards democratic backsliding: by increasing the
wiggle room of political elites, providing a handy excuse for ignoring
corruption and the lack of rule of law, and ultimately weakening
external pressures for domestic change in a vulnerable European
Russian activism has put Western policymakers on alert. The
story of the failed coup in Montenegro (October 2016) in particular
made headlines on both sides of the Atlantic. Whether it was a
genuine attempt by the Russian state to intervene robustly in the
politics of the region or a locally hatched plot, involving Russian
citizens, it clearly raised the stakes and put former Yugoslavia in the
spotlight. Moscow’s meddling in Bosnia, and particularly its backing
of Dodik’s referendum, fueled even more tensions. One should not
be surprised that the specter of yet another Balkan war was quick to
reemerge in the Western media. “Putin is planning his revenge over
Bosnia and Kosovo” argued a piece in The Observer in January
2017. Inal likelihood, such fears are overblown. The chances of a
return to the 1990s are slim, mostly because Balkan politicians lack
the means to wage war and are able to obtain all the benefitsrallying their populations behind the flag and stirring nationalist
sentiments-without going past the brink. Yet, the frailty of the
region’s democratic regimes, the weakening pull of the West in the
age of Brexit and Trump, and the raw wounds of the past, all provide
Russia with ample opportunities to assert itself in an area as fragile
as the Western Balkans.r

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