Countering Russian Influence in the Balkans

Editor’s Note: Russia appears to be trying to undermine U.S. influence throughout Europe—and, unfortunately, Moscow appears to be succeeding. Although most eyes are on Ukraine and the Baltic states, the Balkans represent another potential flash point. Emily Holland of Columbia University and Rebecca Lissner of the Council on Foreign Relations argue that the Trump administration and the West in general have ignored the Balkans and call for the EU and the United States to step up aid and do much more in this region to avoid another crisis in Europe.

***

This week, Mike Pence became the first sitting vice president to visit Montenegro, NATO’s newest member. Speaking to Western Balkan leaders assembled in Podgorica at the Adriatic Charter Summit, Pence sent an encouraging message: “[T]he United States will continue to stand with you as you pursue your European future together.” Pence’s trip to Europe, where he also visited Estonia and Georgia, is the latest example of his shadow diplomacy, whereby the vice president assures allies and partners on Russia’s periphery that the United States will “continue to hold Russia accountable for its actions”—presidential tweets notwithstanding.

Pence’s trip to the Balkans, which follows on meetings earlier this summer with Montenegrin and Serbian leaders in Washington, comes at a critical juncture for the region. Twenty-five years after the breakup of Yugoslavia, the Balkans are once again teetering on the brink of instability. Situated on Europe’s periphery, the Balkans face many of the same interlocking threats: the spillover effects of conflict in the Middle East and North Africa, including refugee flows and increased jihadist activity; the rise of Eurosceptic political movements and the rollback of democratic principles within the European community; and an active campaign by Moscow to promote European disunity.

Although the effects of these challenges are evident throughout Europe, they converge most acutely in the Balkans. Last summer’s refugee crisis highlighted the Balkans’ strategic role as a valve to regulate the flow of displaced populations fleeing the war-torn Middle East. With no end in sight to the Syrian conflict, Balkan cooperation on border issues is crucial to European security. Within the Western Balkan states themselves, growing Russian influence has coincided with illiberal backsliding. In Serbia, the election of populist strongman Alexander Vucic, whose candidacy was endorsed by Vladimir Putin, raises questions over the extent to which disaffected citizens in the Balkans remain committed to the European project. Moreover, the recent coup attempt in Montenegro (designed to forestall NATO membership), the narrowly averted political crisis in Macedonia, and the nightmarish possibility of a nationalist union between Albania and Kosovo all suggest creeping Russian influence in the Balkans.

These adverse trends have prompted alarm in Washington and Brussels, but political leaders are moving too slowly in addressing the looming crisis on Europe’s doorstep. Particularly as NATO extends its footprint in the Balkans, the United States and Europe have a stake in assuring the long-term stability and Western orientation of the region—not to mention resistance to Moscow’s mischief and meddling. Yet that Western future is far from assured, and a growing credibility gap between promises of Western unity and the realities of EU and NATO expansion risk jeopardizing future progress.

[T]he West’s best option is to keep the region on a favorable course through shrewd economic statecraft.

Shoring up the Balkans will require much more than reassuring rhetoric of the type Pence offered this week. Since expanding EU and NATO membership into the region is politically untenable in the near term, the West’s best option is to keep the region on a favorable course through shrewd economic statecraft. The post-Soviet experience in Hungary and Lithuania suggests that a major infusion of aid and investment could counter Russian influence by providing an incentive for Balkan political leaders to align themselves with Europe and pursue economic development based on the rule of law. By “buying off” the current generation of political elites, the West would create the conditions for democratic and institutional consolidation. Absent a strong signal of continued Western commitment to the Balkans’ future, however, the region is likely to slide toward greater instability—and, if history is any guide, the consequences could reach far beyond their immediate neighborhood.

Balkans in the Balance

In recent years the Balkans have emerged as the locus for a geopolitical struggle between the West and Russia. As once-staunch enthusiasm in the Balkans for the European project has faded, Moscow has intensified its activities in the region through direct interference as well as increased investment flows that are an attempt to coopt local elites.

Russia’s most recent move against the Balkans was a coup attempt in Montenegro on the eve of the country being granted NATO membership. Prosecutors say that two Russian intelligence officers plotted to seize Montenegro’s parliament, kill the prime minister and install a new government hostile to NATO. The governments of Montenegro, the United Kingdom, the United States and others believe the machinations were backed by Moscow with the purpose of thwarting NATO expansion and securing the long-standing goal of opening a Russian military port on the Adriatic.

While the spy-novel-worthy details of the Montenegro episode are remarkable, brazen Russian interference is becoming more common throughout the region. Indeed, the Balkans, with its weak institutional arrangements and history of strongman leaders, are fertile ground for the crony capitalist investment networks that support Russian foreign policy aims throughout Eastern and Central Europe. These economic interconnections are rendered more salient by the cultural narrative of pan-Slavism—a movement that advocates for the unity of all Slavic people into one political organization—which Russia advances by financing local nationalist-populist movements and supporting destabilizing political parties.

Serbia illustrates the powerful confluence of these trends. President Aleksandar Vucic of Serbia, an unabashed fan of Putin, is enthusiastically deepening economic and security ties with Russia. Last year Russia led a trilateral military drill between Serbia, Russia and Belarus—dubbed “Slavic Brotherhood 2016”—and Moscow subsequently agreed to send Serbia six used MiG-29 fighter jets free of charge, with more military equipment available as needed. In addition, Russia has recently given Serbia direct budget support, invested in Serbian infrastructure projects, and promised the Serbs a sweetheart energy deal. Alongside the recent Putin-Erdogan rapprochement, the Russia-Turkey axis is also emerging as a significant counterweight to Western influence in the Balkans.

Window of Opportunity

These issues present a challenge—but also an opportunity for decisive action. The West is well poised to help the Balkan states address their internal challenges while also staving off Moscow’s destabilizing influence. Politically, ongoing EU accession processes represent a major carrot that Brussels can continue to leverage. Such persuasion will be effective, however, only if Europe renews the credibility of its promise of future membership.

In the short term, the Balkans face two significant barriers to joining the EU. First, the region’s rampant corruption, ethnic tensions, border issues and organized crime require serious and sustained domestic reforms—and progress has been slow. Second, the EU’s enlargement fatigue is likely to dampen enthusiasm about any new member states. Prematurely granting membership to Balkan states, to include NATO members such as Montenegro and Albania, would adversely affect Europe by further stressing the EU’s fragile political and economic unity. Even so, Brussels can take near-term steps to lure Balkan states closer to Europe and create the conditions for eventual membership.

[U]nlike the far-fetched promise of EU accession, NATO’s admission of Montenegro signals that the alliance remains a path to closer integration with Europe.

Specifically, a major economic overture could provide incentives and accelerants for the reforms EU membership will ultimately require. Europe has a foundation of strong ties upon which it can capitalize: The EU already has a preferential trade agreement with the Western Balkans, which allows nearly unlimited duty-free exports to the Union, and as the Western Balkans’ largest trading partner, the EU last year accounted for 73.5 percent of total imports and 80.6 percent of total exports. Furthermore, the World Bank—which explicitly supports the Balkan states’ accession to the EU—is encouraging economic development in the region with nearly $3 billion in loans.

The West also continues to influence the security situation in the Balkans. NATO’s Kosovo Force (KFOR), which first entered Kosovo in 1999, remains there with 4,500 troops, and the EU sponsors ongoing dialogue between Pristina and Belgrade about the normalization of Serbian-Kosovar relations. All of the Western Balkan states but Kosovo are members of the Organization for Security and Cooperation in Europe (OSCE), and the organization maintains a field mission or presence in all the Western Balkan states except Croatia. What is more, unlike the far-fetched promise of EU accession, NATO’s admission of Montenegro signals that the alliance remains a path to closer integration with Europe.

Returns on Investment

Following the wars in former Yugoslavia in the 1990s, the West invested significant resources aimed at eventually bringing these countries into the EU. However, both EU and U.S. aid to the region has fallen significantly in recent years. Current EU program funding is less than €1.5 billion annually, and U.S. assistance has been reduced by more than half from $284 million annually since 2010. Given the Balkans’ strategic importance for the West, reducing aid further risks the integrity of the European project, continental security, and relations with the Middle East and North Africa.

A sustained, generational investment in the region is the only way to address the major challenges facing the Balkans and the West more broadly. Such an investment would provide strong incentives for elites to turn toward the EU and rule-of-law-based development rather than toward Russia. The gains from Western cooperation in the near term would enable the development of institutions that lock in this orientation in the longer term. Through investments in civil society and governance, the West could engage the new generation of Balkan policymakers with whom good relations are crucial to maintaining a fruitful and long-lasting partnership.

Investment for institutional development, infrastructure, energy and more would undercut the forces of corruption that help fuel populist movements. Corruption is not only detrimental to institutional, economic and social development, but it also acts as a force against the rule of law. Many of today’s populist regimes run on anti-corruption platforms, pledging to eradicate the bureaucratic venality that is endemic to former socialist states. Serbia’s Vucic, Hungary’s Viktor Orbán, and Poland’s Law and Justice Party have all run populist campaigns against corruption that simultaneously promote nationalism and Euroscepticism. In 2016, Croatia’s government collapsed after a huge corruption scandal, and it was recently named one of the most corrupt states in the EU. Ironically, inspired by the Putin regime, once in power these regimes often attack the media and undermine other liberal institutions, including the courts. While some regimes successfully combat bureaucratic corruption, they are also prone to crony capitalism that facilitates larger, top-down corruption and even kleptocracy. Recently, thousands of protesters marched in Belgrade against Vucic and demanded an investigation into a shady multi-billion-euro building project that is tied to his regime.

Two prominent cases point to the pivotal role of investment and economic statecraft in countering these illiberal forces. The Lithuanian experience suggests that a sustained investment regime can disrupt the cross-national investment networks that support Russian foreign policy aims and corruption. Even after Lithuania’s accession to the EU in 2004, Lithuania’s entanglement with Moscow in many strategic sectors hampered its government’s ability to make much-needed market reforms. One such sector was energy; Lithuania was completely dependent on Russian commodities, and reformers were unable to diversify due to Russian capture of key policymakers and business elites. After a European investment of almost €1 billion, which was aimed at changing the incentives of local elites, Lithuania now stands out as a staunch Western ally, having used EU funds and technocratic experts to replace Russian revenue streams with Western opportunity.

In contrast, Hungary stands out as an example of the success of Russia’s activist economic statecraft policies. Since the election of right-wing populist Viktor Orbán in 2011, Hungary has emerged as a sharp critic of the EU (despite its membership in the bloc) and a staunch supporter of Putin’s Russia. In 2015, Putin and Orbán appeared together in Budapest to announce a major gas deal, as well as a €10 billion loan to finance the construction of a Russia-managed nuclear facility in central Hungary. Shortly thereafter, in his infamous “Illiberal Democracy” speech in 2014, Orbán praised Russia’s illiberal regime as a model for a post-Western world. Putin traveled to Budapest again this year to announce expanded financial support for Hungary’s nuclear project, and he voiced support for Orbán’s efforts to crack down on NGOs he accuses of using foreign funding to subvert the regime. Hungary's minister of foreign affairs and trade, Peter Szijarto, then announced a new defense development program that includes procurement of new military helicopters from Russia and the refurbishment of older models. In addition to seeking economic partnerships and closer ties to Russia, Hungary has challenged European initiatives and even openly defied EU edicts. Hungary’s alignment shift demonstrates the urgent need for a revitalization of EU and U.S. foreign policy in the region.

An Ounce of Prevention

A shortsighted diplomatic approach that leaves fragile Balkan states to fend for themselves during a period of upheaval presents significant risks over the next five to 10 years. This region has earned its reputation as a flash point for conflict, and the West ignores the recent warning signs at its peril. Now more than ever, it is crucial to consolidate the gains of the early 2000s to prevent losing the region to dictatorship and crony capitalism.

Beyond preventing negative outcomes, through support for the Balkans the EU can correct its past mistakes with Turkey, where waning European enthusiasm for EU membership precipitated a huge drop in Turkish public support for the European project and reduced incentives for Turkish leaders to continue reforms. A renewed Western commitment could save the Balkans from a similar drift toward authoritarianism while also leveraging the Balkans’ substantial Muslim population and Ottoman past as a diplomatic bridge to Ankara.

Members of Congress will find eager partners in senior military leaders concerned about Moscow’s creeping influence...

Washington should work with Brussels to fortify the Balkans against Russian influence, as instability directly threatens the U.S. interest in a strong and united Europe. Ideally, the United States and the EU would collaborate on a comprehensive U.S.-EU-NATO strategy and associated aid package to assure the long-term security, prosperity and Western orientation of the Balkans. But if the president’s insolent attitude toward Europe means that the Trump administration is uninterested or unwilling, Congress should work with partners in Brussels and within the Balkans to spearhead this effort. Appropriators can push for an expansion of U.S. aid to the region and, at a minimum, should ensure that ongoing bilateral assistance programs—such as support for good governance reforms, regional trade integration, military assistance and counterterrorism cooperation—remain adequately funded. Relevant congressional committees can focus the executive branch’s attention by holding hearings on Balkan political, economic and security issues, as well as by pressing Trump administration appointees on their strategy for the region during confirmation hearings or other testimony. Visits to the region by congressional delegations can also strengthen ties binding the United States to new and aspiring NATO members while signaling Washington’s continued interest in regional stability. Members of Congress will find eager partners in senior military leaders concerned about Moscow’s creeping influence; NATO’s supreme allied commander recently highlighted Balkan instability as a growing threat to Europe. Sen. John McCain, who sounded the alarm after a recent visit to the region, is a natural leader for a bipartisan congressional effort to bolster the Balkans.

Amid the upheavals of the past decade—from the Greek debt fiasco to the rash of ISIS-related terrorist attacks—Europe frankly cannot afford another crisis on its doorstep. While a major investment in the Balkans would be expensive, failure to meet the Russian challenge in the Balkans is likely to prove even more costly. The EU, with support from the United States, would do well to recognize that an ounce of prevention is worth a pound of cure.