Eurasian Economic Union Membership Potential In The Balkans

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Op/Ed by Chris Devonshire-Ellis

Brussels vs Moscow As West Meets East And Choices Need To Be Made 

With the news this week that Moscow has invited both Albania and North Macedonia to join the Eurasian Economic Union (EAEU), we can take a look at the European Balkans region and take a quick snap shot of the regions nations and how they are currently politically aligned with both Brussels and Moscow. The region is interesting as many of the nations within have cultural and religious (Eastern Orthodox) ties with Moscow, as well as many being satellite states of the Soviet Union. China is also involved in the region, via its forming of the Cooperation Between China and the Central and Eastern European Countries which promises investment and involvement in Belt & Road connectivity projects. This is further enhanced with China currently negotiating the elimination of tariffs on products as part of its own Free Trade Agreement with the EAEU. This raises the potential for countries with EAEU membership or an FTA to be able to sell products onto the China market as well as the rest of the EAEU. It is a classic “East vs West” political and trade struggle, which has just begun to emerge in the Balkans. We take a look at how the current political winds are blowing as follows:

Albania has been an EU candidate member since 2000 yet has just had this proposal put on indefinate hold in the wake of Brexit. Moscow has recently invited Tirana to join the EAEU, yet relations between the two countries are historically cool. However, Tirana has historic connections with China, and having Beijing on board the EAEU could see Tirana’s position shift. That will depend on the extent of China’s still negotiating position on product tariffs with the EAEU and how much of this and China market access will apply to other countries holding FTA with the EAEU. Tirana will be hoping for some leeway from its preferred destination of Brussels but could be persuaded with Chinese influence and support.

Possibility of Joining The EAEU – Low

Bosnia & Herzegovina
Russian troops supported the Bosnian Government during the civil war and were the first to provide official recognition to the country following its creation in 1992. B&H is currently a potential member of the European Union and NATO, however given that Brussels has recently put other regional EU applications on hold this may change the position in Sarajevo towards favoring Moscow and the EAEU instead. Russia is the largest investor in the country.

Possibility of Joining The EAEU – Medium

Bulgaria is a member of the EU and NATO, however enjoys good relations with Moscow. Relations with the EU are awkward, as Bulgarian nationals do not enjoy Schengen visa status and the country often feels marginalized by EU policy. Bulgarian trade volumes with Russia are similar to that with Germany, and Sofia will feel that the EU will need to do more to keep the country loyal to Brussels.

Possibility of Joining The EAEU – Low

Croatia is a member of the EU and NATO, and has been having diplomatic and economic problems with Moscow. Zagreb has accused Moscow of electoral interference, while Moscow has also incurred significant financial losses in the recent Croatian state takeover of the country’s largest agricultural company. Bilateral trade and tourism has halved since the Russian situation with Crimea with Zagreb supportive of Ukraine.

Possibility of Joining The EAEU – Low

Greece is a member of the EU and NATO, however has endured recent struggles with Brussels over the Eurozone and perceived asset-stripping by Germany to support loans to Athens. Greece is also the only EU country where national support for the Russian President Putin is over 50%, while 2/3 of Greeks view Russia favorably. Greek-Russian trade is in decline, while tourism has been relatively good, however political problems with the Greek Orthodox Church recognizing the Ukrainian Orthodox Church have strained relations over Mount Athos. The Ecumenical problems will need resolving to move Greece more into alignment with Russia before any changes will be possible, despite Athens deep distrust of Brussels.

Possibility of Joining The EAEU – Low

Italy is a member of the EU and NATO, yet consistently dismisses Brussels attempts to regulate and better position its fiscal budgets. Ignoring Brussels wishes it has recently agreed to sign off a Belt & Road agreement with China. Italy has also just hosted a meeting of the Eurasian Economic Union in Verona, while both culturally and politically there is support for Moscow in Rome. On a practical level though, Italy remains wedded to Brussels and it will take a lot for that to change. That said, the Italian banking position is precarious and Italy could use threats of extending relations with Moscow and Beijing further to gain EU leverage and concessions. But anything beyond that is unlikely.

Possibility of Joining The EAEU – Low

Russia doesn’t recognize the legitimacy of Kosovo as an independent country and regards it as a break away region of Serbia. The Russian ambassador to Serbia has outlined Moscow’s stance as regards Kosovo as follows: “Russia’s stand is rather simple — we are ready to back whatever position Serbia takes with regards to Kosovo.”

Possibility of Joining The EAEU – Zero (unless reunified with Serbia)

Russian FDI accounts for about 32% of the Montenegran total, however Montenegro applied to join NATO in 2017 and a diplomatic scandal arrived in 2019 when Montenegro accused Russia of interfering with national elections. However the country remains a popular Russia tourism destination. The NATO issue will need resolving for Montenegro to join the EAEU.

Possibility of Joining The EAEU – Low-Medium

North Macedonia
Moscow has invited North Macedonia to join the EAEU however Skopje has also recently signed off an accession agreement to join NATO, although this still needs to be ratified by other NATO members. If this passes, the NATO issue will need to be revisited. The country does not recognize the Russian position over Crimea, however is amenable to Russian investment and Russian gas supplies. To date North Macedonia has been more pro-Brussels than pro-Moscow, but with Brussels putting EU accession on ice, the country is currently external from any major trade bloc.

Possibility of Joining The EAEU – Low-Medium

Romania is a member of the EU and NATO, and has historic problems with Russia over the status of Moldova and Romania’s National Treasure, which were stored in Moscow during WWI and have not as yest been returned. Romania’s position within the EU is not entirely happy either; the country remains outside the Eurozone and does not has Schengen visa status. Bilateral trade with Russia has been in slow decline.

Possibility of Joining The EAEU – Low

Serbia is a member of the Eurasian Economic Union, having signed an agreement last month. Moscow has been supportive of Serbia’s position as regards the breakaway region of Kosovo and has significant oil and gas control in the country. Although Serbian troops do train with NATO in Serbia, it is not a member of NATO. Bilateral trade is increasing and Russia is financing Serbian infrastructure development such as the high-speed rail through to Montenegro.

Possibility of Joining The EAEU – Has Signed Free Trade Agreement

Slovakia is a member of the EU and NATO, and also enjoys warm relations with Moscow, and public opinion towards Russia is among the highest in the EU. The country is dependent on Russian energy supplies, however bilateral trade volume remains small. In trade, Slovakia favors the EU, but politically, it prefers to maintain friendship with Moscow. Brussels meanwhile has struggled to assert control over Bratislava and has engaged in several crisis meetings with the country. Between the lines, and being a small nation, Slovakia’s future rests on where it sees it’s longer term goals – meaning where the money is coming from. Difficult decisions in a country beset by corruption.

Possibility of Joining The EAEU – Medium

Slovenia is a member of the EU and NATO, however also maintains good relations with Moscow. Russia is both a major energy source and trade partner. However, Bratislava is supportive of Ukraine over the Crimean issue, yet stops short of criticizing Moscow. On the other hand, the President of Slovenia, Miro Cerar, has also stated that Slovenia wants the EU to lift economic sanctions on Russia as the sanctions were affecting trade between the two countries, which has decreased by 40 percent as a consequence. Yet distrust of the EU itself in Slovenia remains high – more people in the country are anti-EU than in any other EU member state. Slovenia itself was described by Brussels as “the least influential country in the EU.” Should Brussels continue its traditional negligence towards the Balkans and Eastern EU members, Bratislava could start to question where its future lies – to the East, or towards the West.

Possibility of Joining The EAEU – Low-Medium

Turkey is not a member of the EU, but is a member of NATO. The position of Turkey within Brussels has long been a source of irritation in Ankara; the EU accession draft dates back to 1987 and Turkey was one of the original members of the Council of Europe in 1947. Yet there has been little movement on Turkish membership of the EU since then, with the doors apparently closed. This, coupled with problematic relations with the United States, have tended to leave Ankara feeling isolated and frustrated – a problem with a country possessing a large military presence, border conflicts, a population of 81 million and a GDP of US$881 billion. Although relations with Russia have been rocky at times, the two countries possess strong willed leaders who appear to get on. As regards NATO, Turkey has also been buying military equipment from Moscow instead of the US. Trade relations have improved, and Ankara has said it is supportive of signing a Free Trade Agreement with the EAEU. This can be expected to occur late 2020 or 2021.

Possibility of Joining The EAEU – High: Negotiations Underway

Clearly, changes are happening, and are obviously progressing in terms of dialogue. The implications for the European Union, and especially Eastern Europe and the Balkans as to where their common destiny lies is currently an issue up for negotiation – with discussions being held right now. While the European Union appears disinterested in the region and has at present placed Albania and Northern Macedonia’s accession on ice – other parties are showing an active interest and with apparently viable alternative market options. The situation will undoubtedly change as political winds ebb and flow – but with Brussels immensely damaged by Brexit, member states having to contribute more to EU budgets, calls for sanctions on Russia to be phased out, and a growing amount of autocratic government growing within the region, the Balkans could become a testing ground for European nations deciding to continue looking West to Brussels, Berlin & Paris, or favor the East towards Moscow and Beijing. The scene is set for much political and trade intrigue over the coming decade.

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