Economy

Eurasian disunion – Russia’s vulnerable flanks - Part Twenty Six

Analysis 11 July 2018
Eurasian disunion – Russia’s vulnerable flanks - Part Twenty Six

The think tank Institute for Strategic Analysis continues publication of excerpts from a book “Eurasian disunion-Russia’s vulnerable flanks” to keep English-language readers informed of new trends, developments and analyses of President Vladimir Putin’s policies in former Soviet nations during his reign over Russia.

Part Twenty Six

4. South Western Flank: South East Europe

The Balkan Peninsula is viewed by Moscow as Europe’s weakest link. The Western Balkans in particular are important to Moscow from a propagandistic vantage point vis-à-vis Washington. The fracturing of Yugoslavia in the 1990s is exploited as evidence of an alleged Western conspiracy to overthrow governments, break up states, and change international borders. Such actions have evidently challenged the international legal order and set precedents for Russia’s policies toward its post-Soviet neighbors.

Despite their EU and NATO membership, Greece and Bulgaria are considered potentially pliable states that can, on occasion, favor Russia’s interests. However, the Western Balkans are viewed as Europe‘s “soft underbelly,” where the Kremlin can capitalize on local conflicts, democratic deficits, and nationalist surpluses to undermine Western objectives and promote its geopolitical ambitions. The financial crisis in Greece has also generated political radicalism beneficial for Moscow. Both the extreme right and radical left parties in Athens are anti-American and view Russia as a close ally. The election of the ultra-left Syriza movement in January 2015 bolstered Moscow’s opportunities for using Greece to undermine EU and NATO unity.

Balkan Front

Since the break-up of Yugoslavia, the Russian government has opportunistically exploited ethno-national grievances and divisions to gain political leverage with favored governments. Given the stuttering progress of most West Balkan states toward EU and NATO accession, the persistence of ethnic tensions, the weakness of national institutions, and the susceptibility of government officials to corruption, the region has grown in importance as a locus of Russia’s interest and influence.

Moscow pursues four main channels of entry into the region: nationalism, corruption, business, and propaganda. First, ethnonationalism is a combustible substance that can be encouraged and exploited by the Kremlin overtly or covertly, whether through diplomatic backing, international campaigning, direct or indirect funding of extremist groups, media exposure, or linkages with Russia‘s intelligence services and ultra-nationalist formations. Russian propagandists and pro-Kremlin academics seek to drive wedges between Muslims and Christians in the region and incite Islamophobia to stir local nationalisms. Some have claimed that radical Islamists will try to seize Serb-populated territories and conduct terrorist attacks in Serbia, Bosnia-Herzegovina, Macedonia, and other states. They also claim that Albanian Muslims throughout the region are secretly preparing for armed conflicts against Christian populations.

Moscow’s support for nationalist groups has been evident with the radical right Ataka movement in Bulgaria and various Serbian nationalist formations in Serbia, Bosnia-Herzegovina, and Montenegro. Although Syriza in Greece is not a nationalist grouping but an ultra-leftist formation, its deep-rooted anti-Americanism and resentment against Germany for imposing tough conditions to secure crucial bailout loans has suited Moscow. Promoting local nationalism or leftist statism can contribute to undermining support for NATO, the US, and the EU, it can raise sympathies for Moscow’s international positions, and it may stir regional rivalries that preoccupy Western institutions and empower the Kremlin to inject itself as a mediator.

Second, Moscow encourages political corruption throughout Europe. In the Balkans, where the rule of law remains relatively weak, politicians are especially vulnerable to Moscow’s enticements. Various public figures are targeted, including national and local politicians, government ministers, security personnel, businessmen, and media heads. The objectives are both political and economic. Through outright bribery or opaque transactions, Balkan officials may favor Russian business interests and remain neutral or support Moscow in its foreign policy offensives. This can undermine Western unity whether in the NATO or EU contexts.

Political corruption is also evident in funding for NGOs that support positions at odds with EU and US policy. This has been visible in the campaign against shale gas development in Bulgaria, which would reduce Russia’s preponderance as an energy supplier. Russian sources have reportedly funded Bulgarian and Romanian environmentalist groups. Similarly, some individuals involved in the protest campaign in Tirana in the fall of 2013 against Washington‘s request to dismantle chemical weapons agents from Syria inside Albania allegedly maintained contacts with the Russian embassy in Tirana.

A third well-tested method of Russian influence is the fostering of energy dependence. This included tying Balkan countries into South Stream and other energy project led by Gazprom and gaining majority shares in local pipelines, refineries, and other energy facilities. Energy dependence can undergird diplomatic and political compliance. Serbia has been the most prone to Moscow’s energy inducements, having sold majority shares of its NIS (Naftna Industrija Srbije) oil and gas complex to Gazprom. Belgrade has favored Russian investment and energy supplies partly as a form of reciprocity for Moscow blocking its former province of Kosova from membership in the United Nations. The Kremlin has also offered aid and investment to the Serb Republic (RS) entity in Bosnia-Herzegovina as a way to court a potential ally.

The Kremlin promotes economic dependence by using energy resources, state loans, and business investments to gain political influence. Since the late 1990s, Russia’s energy giants such as Lukoil and Gazprom have made inroads in Bulgaria, Romania, Serbia, and Bosnia-Herzegovina. Plans to build major energy transportation systems between the Black Sea and the Adriatic Sea and Central Europe placed the Balkans at the center of Russia’s South European strategy. Moscow seeks to monopolize the supply of natural gas passing through the region to Western Europe. Contracts and investments provide the Kremlin with significant inroads in a targeted country’s economy and substantial influence over its foreign policy. Planned cross-regional pipelines have been calculated to place Serbia and Bulgaria, in particular, at the center of Russia’s energy ambitions and prevent the construction of an energy network independent of Russia that would link Central Asia, the South Caucasus, and Europe.

Countries with fewer alternative sources of supply are more vulnerable to energy blackmail, high energy prices, and political interference. The most illustrative examples include Bulgaria, Macedonia, Serbia, and Bosnia-Herzegovina, which have been among the most ardent supporters of Russian energy projects such as South Stream but pay some of the highest prices for Russian natural gas.3 These countries also have a high proportion of Russian energy asset acquisitions and critical energy contracts. Russian economic penetration is much more restricted in countries that have their own oil and gas reserves, such as Romania and Croatia.

Although dependence on Russian crude oil is generally higher than on gas, the existing alternatives to oil supplies and transportation options make it secondary to gas when used by the Kremlin as a form of pressure. Russia has also focused on expanding the presence of its oil giants Lukoil, Gazprom Oil, and Zarubezhneft on the Balkan market by investing in the oil and petrochemical industry, critical asset acquisitions such as oil refineries (Bulgaria, Romania), gas stations and oil storage facilities throughout the region, and energy distribution companies such as NIS and Beopetrol in Serbia, Europemil in Croatia, and Montenegro Bonus in Montenegro. Russian oil companies have also engaged in geological exploration and development of oil fields in the Balkan countries and the Black Sea shelf.

The natural gas sector in the Balkans, including Greece, Romania, Croatia, and Slovenia, is small, with annual consumption of 26 billion cubic meters (bcm) of gas per year according to data from 2013, of which more than half is locally produced and only 10 bcm imported from Russia.4 Nevertheless, the Balkans have become a battleground for several gas pipeline projects, with the now defunct South Stream managing to involve almost all countries in the region. Promising large investments, high transit fees and taxes, and thousands of jobs to the unemployment stricken economies, Moscow succeeded in pitting these countries against the EU as lobbyists to exempt the pipeline from EU laws.

South Stream’s main purpose was political. It aimed to bypass Ukraine as a transit country and eliminate the Trans-Balkan pipeline as a major supply line; undermine the Nabucco pipeline as an alternative gas route from the Caspian basin to Central Europe, and divide EU members over Union regulations. The main line for Russian gas to the Balkans is the Trans-Balkan gas pipeline, which traverses Ukraine and Moldova toward Greece and Turkey. Moscow has been trying to close this pipeline since 2006, in order to circumvent Ukraine as a transit country for its gas deliveries to Europe.

However, Kremlin plans to construct South Stream fell apart under legal pressure from Brussels as well as Russia’s worsening financial situation due to Western sanctions and falling oil prices. The proposed substitute, Turkish Stream, which is slated to come onshore in Turkey and bypass Bulgaria, will experience even greater financial troubles as Russia has lost its Western investors. Gazprom’s South Stream partners, the Italian ENI, German Wintershall, and French EDF, recuperated their investments in the cancelled project and seem uninterested in constructing Turkish Stream.

Since the cancelation of South Stream in December 2014, Moscow has been courting Greece, Macedonia, and Serbia to recruit investors and build Turkish Stream. For Skopje, the pipeline is dubbed the Trans Macedonian pipeline, while for Belgrade it is called Balkan Stream.5 Nevertheless, the project is not one of the top three priorities for Macedonia. Instead, Skopje announced that it intends to join the Azerbaijan-led Trans-Adriatic Pipeline (TAP) initiative. It would consider joining Turkish Stream only if Brussels and Moscow reach an agreement, which remains a distant prospect. Serbia has expressed a similar position on taking the lead from Brussels rather than Moscow, despite its close relations with Russia. The strategic purpose of Turkish Stream is similar to South Stream: to isolate Ukraine, undermine the strategic importance of the Azerbaijan-led Southern Gas Corridor, and create divisions among EU members. Furthermore, through Turkish Stream, Moscow aims to undermine Azerbaijan’s strategic partnership with Turkey, torpedo Baku’s budding relations with southeast European capitals, and stall its expanding partnership with the EU.

In the fourth component of its Balkan strategy, the Russian state engages in propaganda offensives through the local media, Internet, and social networks to enhance Moscow’s position and undermine Western institutions or to discredit local politicians who favor NATO and the US. For instance, Montenegro’s Prime Minister Milo Đukanović has come under intense attack from Russia’s officials and media outlets in recent years for openly petitioning for NATO membership.

Strident messages are intended to appeal to anti-globalist, euroskeptic, anti-American, ultra-conservative, and religious orthodox constituencies in which Russia poses as the defender of traditional values and the EU and US are depicted as deviant and immoral. Russia’s Orthodox Church also upholds close ties with the Serbian and Bulgarian Orthodox Churches to coordinate their promulgation of ultra-conservatism and anti-liberalism. Additionally, Moscow has supported political leaders who have been criticized by Washington and Brussels for backtracking on democracy. The most prominent recent example is Macedonia’s Prime Minister Nikola Gruevski, whom Moscow has defended against allegations of pervasive government abuses, claiming instead that the US seeks to conduct another “color revolution” to install a more loyalist government in Skopje.

A tepid Western reaction to Moscow’s attack on Ukraine can encourage separatist aspirations in parts of the Western Balkans, especially if these can gain Moscow’s endorsement. The Kremlin has signaled to Milorad Dodik, President of the Republika Srpska (RS) quasi-autonomous entity in Bosnia-Herzegovina, that it may back the potential partition of this divided state. At the height of the Crimea crisis in March 2014, Moscow hosted Dodik, whose threats to secede from Bosnia-Herzegovina have periodically escalated tensions in the country. Dodik returned home with €70 million to strengthen his position ahead of national elections.

The government in Serbia will need to tread a fine line between deepening its economic and energy ties with Russia, supporting Bosnia’s Serb leaders, and realizing its aspirations to join the EU. If Dodik pushes for a referendum on secession, then Belgrade may be unwittingly drawn into the ensuing dispute. Serbia will be unable to sit on the sidelines if conflicts escalate in Bosnia between Serbs, Bosniaks, and Croats and if Moscow assists its “endangered Slavic brothers” in the RS. In a worst-case scenario, direct conflict could erupt between Bosnia, Serbia, and Croatia over the future of Bosnia Herzegovina and the position of its constituent nations, thus sabotaging the EU integration project in the region.

If the West fails to prevent Ukraine’s division, several radical groups in the Western Balkans may be encouraged to canvas for autonomy or secession. These could include Bosniaks or Albanians in southern Serbia and Albanians in western Macedonia. Such heightened ambitions feeding on social and economic grievances and unresolved territorial disputes would heat up tensions between governments across the region and provide Moscow with further avenues of penetration. Instability in the Western Balkans has three direct implications for EU and US policy. First, it distracts Western attention from the Kremlin’s offensive in Ukraine and potentially elsewhere closer to Russia’s borders. Renewed disputes ensnare Western diplomacy and peace-making efforts and allow the Kremlin a freer hand to pursue its objectives in the former Soviet Union.

Second, ethno-national conflicts in the Western Balkans help provide a cover and justification for the dismemberment of Ukraine, Moldova, Georgia, and other states that have been earmarked by the Kremlin. Russia’s officials can claim in international forums that they are simply acknowledging the will of the majority and the principles of self-determination that are also visible in the West Balkans and which have been supported by Western powers.

And third, by encouraging nationalist disputes and corrupting the political leadership throughout South East Europe, Putin will hope to procure new allies who will be offered diplomatic support, economic assistance, and energy benefits. At the same time, the ultimate objective of Western capitals to include the entire region within the EU and NATO could suffer long-term setbacks.

(TBC)

Republished from a book "Eurasian disunion - Russia's vulnerable flanks".

 

 

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