Energy

Eurasian disunion – Russia’s vulnerable flanks - Part Thirty Two

Analysis 19 July 2018
Eurasian disunion – Russia’s vulnerable flanks - Part Thirty Two

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 Thirty Two

Macedonia

Over the past few years, Macedonia has increasingly resembled a “frozen state,” paralyzed from entry into either NATO or the EU because of Greek government objections to the country’s name. Athens maintains veto power in both international organizations and asserts that Macedonia has claims on Greek territory, history, and identity. The charges are clearly exaggerated to appeal to Greek nationalism, but they prolong inter-state disputes and undermine regional stability. Simultaneously, the government led by the Internal Macedonian Revolutionary Organization (IMRO) has also aggravated relations by claiming the ancient Macedonian heritage for the new state.

While Macedonia, the EU, NATO, and the US all lose through the Greek-Macedonian dispute, there is one power that gains from this paralysis—Putin’s Russia. 102 Moscow has played both sides of the Greek-Macedonian dispute. By blocking further NATO enlargement in the Balkans, Athens has assisted Moscow’s ambitions; and the Kremlin was elated by the victory of the ultra-left Syriza party in the Greek general elections on January 25, 2015, because of its anti-NATO and anti-American positions.

At the same time, Moscow has pursued closer ties with Macedonian Prime Minister Nikola Gruevski, following government charges against Social Democrat opposition leader Zoran Zaev for alleged blackmail, espionage, undermining the constitutional order, and planning a coup d’état. 103 The authorities in Skopje raised suspicions that Greek secret services sought to destabilize Macedonia by providing Zaev with evidence of the government’s alleged mismanagement, abuse of office, extensive corruption, and surveillance of opponents. Zaev’s charges against the government precipitated the official clampdown.

Putin is hoping that Gruevski can become another Viktor Orban, the Hungarian Prime Minister ostracized by the EU and US for avowedly backtracking on democracy. Concurrently, the charges against Gruevski will also strengthen those in the EU who argue against Macedonia’s membership in either NATO or the EU. This will assist Moscow’s objectives even while it acts as Skopje’s supporter and protector on the international arena.

To ingratiate itself with the Macedonian government, Russia’s officials publicly validated Skopje’s allegations of coup preparations by the opposition and called for a detailed investigation. They were playing the Macedonia card to demonstrate Kremlin support for the legal order of all states and opposition to clandestine US support for political coups. Paradoxically, Moscow charged that Washington wanted to destabilize the Macedonian administration, even though Kremlin support for successive Greek governments contributed to blocking Macedonia from entering NATO and the EU and tested regional stability. When the Macedonian opposition organized antigovernment protests in April 2015 and increased pressure on Gruevski to resign, Russia’s Ministry of Foreign Affairs declared its support for the government, accusing the opposition and “Western-inspired” NGOs of destabilizing the country through an attempted “color revolution.”

On the religious front, Moscow has encouraged the Russian Orthodox Church to become more active in Macedonia, similarly to other majority–Orthodox Slavic states. A Russian Orthodox church was constructed in 2015 in the Skopje municipality of Aerodrom, funded by Sergei Samsonenko, a rich Russian businessman who owns Macedonian handball and soccer teams. 106 Archbishop Stefan, the head of the Macedonian Orthodox Church, blessed the site of the new Holy Trinity church. However, officials in Skopje have expressed concern that Russia may try to use the Orthodox Church to advance its interests in Macedonia.

On the ethnic front, a clash between police and an unidentified armed group in Kumanovo, northern Macedonia, on May 9, 2015, resulted in 22 deaths. The gunfight precipitated assertions by Russia’s Foreign Minister Lavrov on a visit to Belgrade on May 15, 2015, that the region faced instability from Islamic extremism, pointing the finger at Albanians and Bosniaks. He expressed concerns over “manifestations of Greater Albania pretensions” and linked them with various terrorist attacks in the region, thereby highlighting Russia as an ally against international terrorism.

On May 15, 2015, Lavrov added that the Kumanovo “terrorist attack” was connected with Macedonia’s objections to anti-Russian sanctions and participation in the planned Turkish Stream gas pipeline. Expanding on Lavrov’s statement, Russia’s Foreign Ministry accused the West of masterminding the violence in Macedonia and supporting the opposition to oust the Gruevski government Russia’s propaganda offensive against the West, picked up by the local Macedonian media, was intended to sway the public against NATO and EU membership. Ali Ahmeti, leader of the Democratic Union for Integration (DUI), the Albanian coalition partner of the IMRO administration, expressed concern with the increasingly frequent comments from Moscow that spread conspiracy theories about Macedonia in order to expand its influence with the administration.

Ethnic tensions lurk beneath the surface in Macedonia and they can be fueled by an assortment of radicals hoping to provoke a police crackdown that would precipitate inter-ethnic clashes. In the midst of a political crisis with blocked NATO and EU integration because of the Greek veto over the country’s name, simmering grievances can be exploited to deepen ethnic and religious divisions and raise recruits for militant causes.

According to Finance Minister Zoran Stavreski, Russia remains an important economic partner for Macedonia. Putin has observed that Russian companies are prepared to invest substantially in the country. Lukoil has built several dozen filling stations and three oil storage bases. Itera and the Macedonian government have also signed agreements on investment projects in energy infrastructure. Itera and Macedonia’s Toplifikacija established a joint venture in 2004 to construct a gas thermal power plant that would generate one fifth of the country’s annual electricity output.

Macedonia and Bulgaria are the most vulnerable European states to Russian gas supply interruptions, not only because of their dependence on a single gas supplier, but also for the limited alternatives they possess in case of another gas crisis caused by Russian supply disruptions in the Balkans. The completion of reverse flow gas interconnectors between neighboring states has been delayed numerous times, and gas storage facilities are insufficient. In fact, Macedonia lacks any gas storage facilities.

Macedonia’s gas market is very small, but the country pays the highest prices for Russian gas - $564 per thousand cubic meters in 2013. Skopje was also among the South Stream project supporters, hoping that the country would be supplied with natural gas through a spur from the Russian pipeline. Currently, all gas supplies to Macedonia are delivered through Bulgaria via the Trans-Balkan pipeline, making the country as dependent on Russian gas as its neighbor.

Prime Minister Gruevski has developed a special relationship with the Kremlin. He personally lobbied Putin for Macedonia’s inclusion in South Stream. The initial route did not include Macedonia, but after Gruevski’s visit, Gazprom decided to build a spur to Skopje. Since the cancelation of South Stream in December 2014, Moscow has been courting Greece, Macedonia, and Serbia to recruit investors and build a new pipeline for gas transiting through Turkey. Playing on the national sensitivities of the Macedonian public, the official Russian media has promoted the pipeline as a Trans-Macedonian pipeline, while for the Serbian public the line is called Balkan Stream.

The value of Russian investments in Macedonia was estimated at $400 million in 2014, and growing. Lukoil is the largest investor with $32 million and owning a number of petrol stations. The Russian Sintez Group has invested $100 million in the gas-fired thermal power station TE-TO. Another Russian company, Power Machines, has invested $56 million in the reconstruction and modernization of the thermal power station in Bitola. In February 2015, Russian company Stroytransgaz launched the construction of a national gas pipeline between the towns of Klecovce and Stip.

According to Zoran Stavrevski, Macedonia’s Deputy Finance Minister, this investment is expected to motivate other Russian companies. The same company had been contracted to build the Macedonian spur to South Stream. However, Stroytransgaz and its owner Gennady Timchenko were placed on the US sanctions list in 2014. Macedonia refused to join the EU-US measures against Russian officials and companies. By disregarding EU policy despite its candidate status for Union entry, Skopje has become one of Moscow’s preferred partners in the Balkans.

After Bulgaria stopped South Stream construction in June 2014, largely because of its non-compliance with EU laws, Russia has been courting non-EU states Macedonia and Serbia, troubled EU member Greece in desperate need of revenues, and Hungary, which remains highly dependent on Russia for gas supplies. Although Gazprom announced, on May 7, 2015, that gas deliveries through Turkish Stream would start in December 2016, it remains unclear which route the pipeline will take from Greece to the rest of Europe. Macedonia and Serbia are the logical choice, if Gazprom wants to reach the Serbian hub at Banatski Dvor and then continue to Hungary and Austria.

The Kremlin seeks to entice non-EU states such as Macedonia with favorable agreements, including lowered customs rates for exports, free trade accords, and investments in various economic sectors. To increase its influence in the region, Moscow has proposed establishing a free trade zone with Macedonia and Serbia. Given the economic difficulties faced by both states, such an arrangement may appear beneficial even though it would create obstacles to EU integration.

The Kremlin has also offered to provide Macedonia with lucrative energy transit to Serbia from Greece and Turkey while bypassing EU member Bulgaria, which has grown more suspicious over the repercussions of Russian investments. If Turkish Stream is constructed, it is likely to traverse Macedonia, but prospects for the pipeline remain highly uncertain. In a potential setback for Russia, according to comments by Prime Minister Gruevski in May 2015, Macedonia would only join Turkish Stream if the European Commission and Moscow reach agreement on its construction.

(TBC)

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

 

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