February 21, 2014

“The Outpost of the Balkans”

Against the background of the political confrontation in Ukraine, which was caused by the refusal of our leaders to sign an Association Agreement with the EU, a special touch are getting processes of European integration of other post-socialist countries, which have similar to Ukrainian problems and are also at the intersection of interests of the West and Russia.

One such country is Serbia. It still has not recovered from the effects of the civil war, which had swept the former Yugoslavia, and of the Serbia-Kosovo conflict of 1998-1999 that had provoked external forceful intervention by the USA and NATO, and in fact resulted in the Serbian province of Kosovo having become independent. In Serbia itself, socio-political and economic problems are getting worse, the interethnic confrontation continues. Besides, the Serbian society has no confidence in Western countries and international organizations, as the participants of the military operations in the FRY “Allied Force” in 1999. There are also problems in the relations between the Serbian and Albanian population of Kosovo and the NATO peacekeeping force KFOR and EULEX-Kosovo Mission. This is due to Serbians' dissatisfaction with the actions of international missions to promote the independence of Kosovo, strengthening the protection of the Serbian-Kosovo border, and the negative reaction to the persecution of members of Albanian radical organizations.

Map of Serbia
Map of Serbia

But despite all these events, now the European Union is the main partner of Serbia, which gives it access to European goods markets and labor markets, giving it credits, investments and technologies. It should be noted that the EU follows a fairly balanced and effective policy towards Serbia. Providing Serbia with financial and economic assistance, the EU promotes European integration of Serbia and settlement of the Serbian-Kosovo conflict.

Thus, 57% of Serbia's foreign trade accounts for the European Union, while for Russia — only 10%, and for China — 4%. A great role in further development of trade and economic relations between Serbia and the European Union belongs to the established in 2012 the Free Trade Area Serbia-EU (as part of the Agreement on Stabilization and Association between Serbia and the EU), which has provided a 20% annual increase in turnover of the parties.

The European Union is the largest financial donor to Serbia. For example, since 2001, direct investments of EU member states in the development of the Serbian economy has made approximately 11 billion US dollars which account for 60% of total foreign investments. The largest investments were directed to the car-building, engineering, textile and food industries as well as to the development of transport infrastructure and tourism.

Since 2001, the EU has allocated 2.2 billion Euros for the implementation of about 600 programs to prepare Serbia to join the European Union. This year, for such purposes have been allocated 200 million Euros. The funds are being allocated for the implementation of reforms in public administration, justice, social security, healthcare, education, ecology and so on.

Thanks to the positive results of these reforms, which, incidentally, were made by Serbian authorities within the framework of the National Program of Integration into the EU, in March 2012 Serbia received an official candidate status for membership of the European Union.

It should be noted that the EU uses mechanisms to support the European integration of Serbia and Kosovo as a tool for resolving the Kosovo conflict. They rely on the fact that the problem of territorial integrity of Serbia will not be so sharp after its accession to the EU, where national borders between EU member states actually disappear.

Within the framework of practical implementation of this approach, the EU leaders took the initiative to conclude the Agreement on principles of normalization of relations between Serbia and Kosovo, as a condition their integration into the EU. The document provides for the solutions to the most problematic issues in the relationship of the parties, especially for determination of the status of the northern regions of Kosovo, with predominantly Serb population. In this regard, was adopted Serbia's proposal to establish a so-called Community of Serb municipalities of Kosovo with separate powers in the legislative, executive and judiciary spheres.

Prime Minister of Kosovo Hashim Thaci (right), Prime Minister of Serbia Ivica Dacic (left), the High Representative of the Union for Foreign Affairs and Security Policy  Catherine Ashton and NATO Deputy Secretary General Alexander Vershbow
Prime Minister of Kosovo Hashim Thaci (right), Prime Minister of Serbia Ivica Dacic (left), the High Representative of the Union for Foreign Affairs and Security Policy  Catherine Ashton and NATO Deputy Secretary General Alexander Vershbow. Фото: AP/Scanpix

Despite the negative perception of this Agreement by both, Serbia and Kosovo's nationalist forces, and a number of other problems (including latent opposition from Russia) in April 2013, with the help of the EU's mediation, it was signed by the heads of the governments of Serbia and Kosovo. According to the Agreement, in November last year, elections were held for local government in Northern Kosovo areas, and in December began the process of forming local authorities, courts and Police units.

A separate question — Russia's strengthening its influence on Serbia, which Moscow considers its leader outpost and promoter of Russian interests in the Balkans. In contrast to the actions of the EU, Russia, for example, supports the position of Serbia, which opposes the international recognition of Kosovo's independence. Russians assist in solving financial problems of Serbia, involve it in the implementation of joint economic, energy and military- technical projects, and take measures to deepen cooperation between the parties in security and special questions. In 2013, Russia has allocated 300 million US dollars to cover the state budget deficit of Serbia. Another 700 million US dollars are going to be allocated for this purpose in 2014. Russia has also pledged to invest 800 million US dollars into modernization of the Serbian railway infrastructure.

Other forms of financial-economic activity of the Russian Federation in Serbia also get intensified, in particular, widening the networks of “Sberbank of Russia” (Saving Bank) and buying Serbian economic assets (Steel Mill “Smederevo” and the company “Petrohimiya”).

Serbian section of the pipeline "South Stream"
Serbian section of the pipeline "South Stream"

In 2013, Russia and Serbia finally decided to build the Serbian portion of the gas pipeline “South Stream” (with Russia's full compensation for the construction cost amounting to 1.7 billion US dollars) and to supply Russian gas to the Serbian market at favorable terms. Russia also participates in implementation of other energy projects in Serbia, which include the construction of underground gas storage facilities, modernization of the Serbian gas transportation system and so on.

An important direction of cooperation between Russia and Serbia is Russia's supplying the Serbian side with Russian weapons as well as co-production, repair, modernization and export of weapons and military equipment. Examples of this would be the transfer to Serbia of Russian aircrafts and Air Defence systems (including the MiG-29, Mi-17 helicopters, anti-aircraft missile and gun systems such as armor and radar systems, etc.) in terms of concessional loans, creating in Great Plank (Serbia) of Serbian-Russian joint venture with the production and modernization of armored vehicles, as well as the interaction of the parties in the export of weapons and military equipment to Africa, Middle East and Asia Pacific Region.

Pantsir-S (NATO reporting name - SA-22 Greyhound) - Russian ground-based self-propelled anti-aircraft missile and gun system (ZRPK)
Pantsir-S (NATO reporting name - SA-22 Greyhound) - Russian ground-based self-propelled anti-aircraft missile and gun system (ZRPK). Its purpose is a short-range protection of civil and military point from all current and future air attack.

We can't help mentioning the opening in Serbia (at the airport “Constantine the Great” in the city of Nish) of the joint Serbian-Russian Centre for overcoming the emergency situations and humanitarian assistance (including 200 employees of the Ministry of Emergency Situations of Russia).

An interesting topic is Serbia’s joining the EU and NATO. As an alternative, Russia wants Belgrade to intensify cooperation with the Customs Union of Russia, Belarus and Kazakhstan and the CSTO.

In general, the above-mentioned examples and facts can serve as a prerequisite for the establishment of a strategic partnership between Serbia and Russia. However, the Serbian leadership gives priority to development of relations with the European Union, which is much higher than Russia in terms of trade-economic and investment cooperation with Serbia (5-6 times, as the above-mentioned figures show).

Serbia's EU negotiations begin in June
Serbia's EU negotiations begin in June


Thus, January 28, 2014 in Brussels, the first round of negotiations on the issue of Serbia’s accession to the EU took place. In them participated the head of the Serbian government Ivica Dačić and EU Commissioner for Enlargement Štefan Füle. All in all it is expected to discuss and agree on 35 points of the relevant Agreement, covering political, economic, security, legal and humanitarian spheres. In case of positive results, Serbia can join the EU as early as 2018.

Serbian President Tomislav Nikolic dissolved parliament
Serbian President Tomislav Nikolic dissolved parliament

However, at the request of the governing coalition led by Ivica Dačić January 29 of this year President of Serbia Tomislav Nikolić dismissed the Parliament and appointed the country's early Parliamentary elections on 16 March. This should “reset” the Serbian authorities (primarily to weaken pro-Russian forces in Parliament and government) in the country's preparing for joining the EU, and as a result, to successfully implement this process.

Of course, just the beginning of negotiations on accession of Serbia to the EU will not solve all the problems of the country. Moreover, Serbia could face new challenges and threats to its interests, both internal and external, including those connected with Russia's increased counteractions to the process of European integration.

Serbia has successfully developed a constructive relationship with the Russian Federation 
Serbia has successfully developed a constructive relationship with the Russian Federation

Bu the following is attracting attention: a consistent policy of the Serbian state has one goal — to return to Europe. But Serbia has successfully been developing a constructive relationship with Russia, reaching its goals in the most complex internal and external situation. Today, it is especially important for Ukraine, which for more than twenty years cannot determine its foreign policy priorities, remaining helpless in the “gray zone” between the West and Russia.