Balkans are becoming increasingly entangled in the Chinese lending webAdriatic Journal 13 February 2019
The increasing dependence and attachment of the Balkan countries to Chinese loans is becoming an increasingly serious risk for the European Union, the Munich Security report warns, which came out before the three-day security conference that began in the Bavarian capital this Friday. Novica Mihajlovič looked at the main points raised by the report in today’s edition of Delo.
The report, which came out just before the three-day security conference that begins in the Bavarian capital on Friday, analysis the impact of non-European forces on this part of Europe, at the time when the European future of the countries in the region seems increasingly uncertain with China and Russia upping their influence.
Although EU leaders seem to recognise the strategic importance of the Balkans, it is clear to all actors that the integration of the Western Balkan countries into the EU will not happen soon.
Political fragility of the region
One of the factors that increased the political instability of the Balkan region is Kosovo’s decision to establish its own army, despite clear opposition by NATO, triggering threats by Serbia to use armed intervention, the report warns.
In Bosnia and Herzegovina, inter-ethnic tensions were perceived as growing after the Serbian nationalist leader Milorad Dodik was elected to the BiH’s three-member presidency. Massive departure of young people from the region and increasing number of street protests against the ruling authorities the report views as additional confirmation of the political fragility of the region.
Russians and Chinese increase influence
Russia and China have become increasingly active in this part of Europe, with Russia seeing the Balkans as a key aspect in its plan to weaken the EU, the report states. Moscow has been the target of direct accusations on several occasions, attempting to launch an ethnic conflict and increasing resistance to the EU through anti-suppressing propaganda. Last year, the Russians tried to sabotage the most promising development in the region, the recently ratified Greek-Macedonian agreement on Macedonia’s name change that opened the way to the Euro-Atlantic integration of this former Yugoslav republic.
China, through its initiative of a megalomaniac economic and logistic expansion to Europe through the region, commands considerable investment aid, which greatly exceeds the size of EU’s investments. Unlike Russia, which tries to distance the Balkans from the EU and NATO, China supports EU integration. Chinese investments, which largely come in the form of loans from Chinese banks, often fail to meet European standards of transparency and sustainability.
How much do you owe Beijing?
Amongst the Balkan countries, Montenegro’s debt to China is biggest, with 39% of the total external debt representing Chinese loans. A loan of EUR 809m for the construction of a motorway to Serbia has pushed the small state’s debt to 80%of GDP, causing concern by report’s authors that Montenegro is being plunged into the Chinese debt trap.
Where’s the EU?
The European Union has only recently become aware of the risks of such developments, and at the beginning of last year, the European Commission has developed a new strategy that regards the enhanced presence in the Balkan region as a “geostrategic investment.”
Both the EU and NATO began actively fighting against Russian propaganda, and the EU launched a series of interconnected projects with which it wants to compete with China. As stated in the Munich Security report, this year will show how strongly do the Balkan countries still believe in the EU.