Russia, Europe Confrontation Continues in Serbia, Moldova and Georgia
The last 48 hours witnessed a frenzy of diplomatic activities by Balkan and Southeastern countries with both Russia and Europe, underlining the importance of this area for the ongoing if relatively silent confrontation between Moscow and Brussels/Berlin.
Against this backdrop, Serbia, Moldova and Georgia are making headlines.
SERBIA
‘The Serbian government and the European Commission concluded financial agreements today worth €1.6 million for cross-border cooperation programmes in which Serbia participates with Bosnia-Herzegovina (BiH) and Montenegro’ reads a note released by the Serbian government on Friday.
A few hours before, Serbian authorities met with Gazprom officials in Moscow.
‘The parties noted the strategic nature of their partnership in the energy sector and named, in particular, the cooperation in the gas supply, underground gas storage, oil refining and electric power generating sectors’ Gazprom wrote on its website.
Earlier this month, Russian authorities increased diplomatic ties with Serbia and Hungary to discuss cooperation opportunities. Moscow sees in Belgrade and Budapest important partner to win the arm-wrestling with Europe.
MOLDOVA
Despite Moscow cementing its business ties with German companies like Siemens and E.ON, Berlin (or better, Frankfurt) is taking the lead in some key countries. Following national authorities' intention to focus on targeted investments in the area, Germany stepped up coordination activities with Moldova.
‘Prime Minister Leanca and KfW project manager for Ukraine and Moldova, Gunnar Wälzholz, signed the extension of a German aid program by 2 million’ the Moldovan government wrote on its website on Friday, referring to the German government-owned development bank KfW.
The funds will be allocated to increase energy efficiency in ten districts in the north, on the border with Ukraine.
GEORGIA
The announcement comes a day after the meeting between Armenian and Georgian Prime Ministers.
‘As we looked at ways of improving infrastructure and transport communications, we discussed in detail the border checkpoint modernization issue, including the construction of the new Friendship Bridge at Bagratashen-Sadakhlo border checkpoint, for which I am grateful to the Prime Minister of Georgia’ reads the joint statement as reported by the Armenian government.
Armenia is really close to Russia. On Wednesday, Russia's lower house of the Parliament approved a treaty paving the way for Armenia to the Eurasian Economic Union, the trade block offering an alternative to the European Union.
IS THIS IT?
Earlier this year, Professor Alan Riley wrote for Natural Gas Europe that EU has to protect its flank from Russia, focusing on energy projects.
‘With the annexation of Crimea by the Russian Federation, the realization that Russia is becoming a revanchist and destabilizing power gave the EU no alternative but to prioritize its energy security’ reads the article, adding that the Western Balkans are a key area for Europe.
But the problems seem to be more all-encompassing. Recently, British media reported of alleged Russian infiltrations in Western Europe.
On Tuesday, Business Insider UK wrote that Russian President Vladimir Putin is becoming increasingly influential in the UK, France and Germany, Hungary, Bulgaria and Greece. Through cooperation with local far-right parties, Putin is reportedly exerting growing clout.
Nonetheless, it is not all rosy for Russia. As said, Moscow is suffering the consequences of Western sanctions and a plunging rouble. In this sense, the sanctions might turn out to be a resolved instrument, despite Russia's growing ties with India and China in the energy and military sectors. Experts see Russian banking system to go through extreme consequences in case of additional 12-18 months of sanctions.
At this point, the last questions are: Will Bulgaria and Hungary hold for other 18 months? Will European governments find a way out of the current increase in populism across the continent?
Following the meeting of representatives of Austria, Bulgaria, Croatia, Greece, Italy, Romania and Slovenia, it seems clear that there are some countries that are concerned for the failure of the South Stream project. It seems equally obvious that Putin could use this dissatisfaction to further trigger populism in the countries. In this sense, the take-home message is indisputable. If Russia moves fast, leading EU member states should give some proof of knee-jerk reactions. The wait-and-see approach, which rarely paid out, is more dangerous than ever.
Sergio Matalucci
Sergio Matalucci is an Associate Partner at Natural Gas Europe. Follow him on Twitter: @SergioMatalucci