The Balkans: Still the Powder Keg of Europe?

As external powers jockey for influence, instability is still rife in the divided región.




Summary

The Balkan Peninsula is at the intersection of crises in Eurasia. Russia, Turkey, the European Union and the United States all have stakes in the region’s stability. But their national interests diverge. In times of crisis, the Balkans’ internal problems tend to pull in outside powers.

  • If the rest of Eurasia looks similar to how it looked before WWII, the Balkans look similar to how they looked prior to WWI.
  • The various rivalries in the region are still quite active, and the hatred between the Serbs, Croats, Bosniaks and Kosovars keeps tension high in the region.
  • Economically, the Balkan region is by far the least developed and most strained of any region in Europe. High unemployment rates coupled with the region’s dependency on exports contribute to rising social problems.
  • Outside powers’ influence is nothing new to the Balkans. Foreign countries have used trade and investment to establish their influence in the region, which, in turn, brings new vulnerabilities to Balkan countries.
  • The resolution of the current Balkan crisis depends on the way these countries decide to act – and they all have very little room to maneuver considering the complexity of their problems. 
Introduction

Russia is under severe economic strain and faces a strategic challenge in Ukraine, but a bear is often most dangerous when it is cornered. Turkey is a power on the rise. The EU’s credibility is shot. Western European countries have serious domestic economic problems that make them apathetic to the concerns of the rest of Europe. At the center of this is Germany, which is sitting on an export bubble and trying to hold the EU together through sheer force. Muslim migrants continue to pour in from the Middle East, North Africa and South Asia. Nationalism is rising. And the U.S. is trying to extricate itself from conflicts in Eurasia.

There is a part of Europe that sits directly at the intersection of all of these dynamics: the Balkans. The Balkans are often lost in the shuffle when people consider the current state of European geopolitics. But the Balkan region has always had a way of dragging outside powers into its own instability – and right now the Balkans seem to be a powder keg waiting to blow.

 

Bosnian-Serb supporters of right wing opposition parties wave flags during a protest on May 14, 2016 in Banja Luka. Thousands of opponents and supporters of Republika Srpska leader Milorad Dodik faced each other at simultaneous gatherings, accusing each other of corruption and treason. ELVIS BARUKCIC/AFP/Getty Images
Bosnian-Serb supporters of right wing opposition parties wave flags during a protest on May 14, 2016 in Banja Luka. Thousands of opponents and supporters of Republika Srpska leader Milorad Dodik faced each other at simultaneous gatherings, accusing each other of corruption and treason. ELVIS BARUKCIC/AFP/Getty Images

 

The Balkan countries suffer disproportionately from the slowdown in Europe’s economy. Identity is still hotly contested in multiple ways: national, ethnic, religious and tribal. There is a substantial Muslim population in the Balkans susceptible to all sorts of transnational cross-currents, and the region’s poor, isolated, unemployed young people make for potentially fertile recruiting ground for radical groups. New states are still being created here, and not with universal understanding or approval. The post-Yugoslavia Balkans are already unstable, but the forces fighting around and through these countries could exacerbate the situation and turn garden variety instability into a crisis that would affect the interests of multiple regional powers.

Stigma

The 20th century began and ended with European wars. World War I was a global conflict, but its immediate cause was competition in the Balkans. A Serbian group called the Black Hand assassinated the heir to the Austro-Hungarian Empire, and through various alliance structures the Continent was soon engulfed in war.

The end of the century was punctuated by smaller conflicts resulting from the disintegration of Yugoslavia. These included the Ten-Day War in Slovenia, the Croatian War of Independence, the Bosnian War and finally the Kosovo War, in which NATO and the United States participated. Europe likes to think it put its demons to rest after World War II, that the EU is the manifestation of peace coming uniformly to the Continent, and that war is gone from Europe once and for all. This is a noble delusion, made no less delusional by its nobility.

The Balkans are often explained away as not really being part of Europe. Europe cares a lot about the stigmas that come with assigning categories. Tell a Slovak they are Eastern European and they’ll tell you absolutely not – they are Central European. Tell a Romanian they are southern European and they will pull you aside and explain all the reasons such a label shouldn’t apply to Romania.

Romania, Bulgaria and Greece from a purely geographic point of view are part of the Balkans. None of these countries wish to be seen that way, and for the most part, when the term “the Balkans” is used, people talk about the western Balkans – the countries that used to make up Yugoslavia. According to the Oxford English Dictionary, the verb “Balkanize” has come to mean “to divide (a region or body) into smaller mutually hostile states or groups.”

 

The Balkans

 

History

Despite the stigma, the Balkans are very much a part of Europe. The Balkan Peninsula is sandwiched between four seas: the Black Sea, the Mediterranean, the Adriatic and the Aegean. It comprises Greece, Bulgaria and the western Balkans – Albania and the countries of former Yugoslavia. Historically, the Balkans were strategic to dominant powers, considering their location, which provides access to several waterways while part of the European borderlands. Before the region’s nations attempted to draw their own borders, the Balkans were the meeting place for three major empires: the Ottoman, the Russian and the Austro-Hungarian.

 

The Ottoman Empire

 





Before the late 19th century, the Ottoman Empire dominated most of Eastern Europe, the Balkans included. As the Ottomans started their retreat in the late 17th and early 18th centuries, both Russia and the Western powers became interested in gaining influence in the region, concerned with potential instability following the Ottoman Empire’s disintegration. The Balkan League, formed with Russian support in 1912, started a war against the Ottomans to drive them away from Eastern Europe. This war was followed by another, in which Bulgaria started to grab territory. Serbia came out on top in both of these wars.

Russia became dependent on Serbia as a buffer against the Austro-Hungarian Empire. Serbian nationalism grew (supported by Russia) while the Austro-Hungarian Empire started to feel threatened by a potentially expansionist Serbia. These forces built the momentum for the start of World War I, which began with the killing of the Austrian Archduke Franz Ferdinand in Sarajevo in June 1914 by Gavrilo Princip, a member of the Black Hand.

After WWI ended in 1918, Yugoslavia was formed, first as the Kingdom of Serbs, Croats and Slovenes and then as the Kingdom of Yugoslavia. It grouped the southern provinces of the Austro-Hungarian Empire and the formerly independent Kingdom of Serbia. The western Balkan nations were locked together first into a kingdom and then, following the end of the WWII, into a federation until the end of the Cold War. The accumulation of tension between the various ethnic groups, Yugoslavia’s economic problems during most of the 1980s and rising nationalism throughout the provinces fueled the Balkan conflicts of the 1990s. The wars ultimately triggered NATO intervention against the Serb-led Yugoslav forces. 
The Balkan wars of the 1990s were the first time after the end of the Cold War that Western forces intervened to secure Europe.

After the wars, new borders were drawn in the Balkans and new states were formed. But a common feature for all the states is multiethnicity. NATO and the EU are both involved in securing the region and supporting conflict management processes while helping to build up civil society. However, the transition is ongoing and the Western powers are not the only ones building up their influence in the area: Russia and Turkey are also key players, each for its own national interest.


The Situation Today: Economics and Politics
The current challenges facing the Balkans need to be understood on two levels to see how the stability of the region and of the Eurasian landmass are connected. The first level is the internal issues of the Balkan countries. The second is outside powers’ stakes in the region.

Before tackling the various rivalries and hatreds that animate the politics of this region, we should note that economically, the Balkan Peninsula is by far the least developed of any region in Europe. These are all small countries with small economies that did what the rest of Europe did during the heady 1990s and 2000s – they grew by exports. In 2015, exports accounted for 48 percent of Serbia’s GDP, 49 percent of Croatia’s GDP, 49 percent of Macedonia’s GDP and 43 percent of Montenegro’s GDP. Exports made up 32 percent of Bosnia’s GDP and 27 percent of Albania’s GDP in 2014, the most recent data available.

 

Balkans Exports

 

The problems that the rest of the world’s exporters are facing hurt the Balkans more because of their small size and limited options for trading partners. Germany is sitting on an export bubble, but bought itself time first by exporting to China, then to the U.K. and the U.S. But now, even Germany’s economy is vulnerable and German imports of goods from the Balkans are decreasing. Italy is also facing economic challenges. All of this puts pressure on the Balkans and has eroded both the EU’s reputation and the incentive for many Balkan countries to listen to what the EU wants, as membership has become either unattainable or undesirable.

Meanwhile, unemployment rates in the western Balkans are by and large some of the highest in all of Europe. Bosnia and Kosovo both put Greece’s 24.2 percent unemployment rate to shame, Macedonia and Serbia are in the same neighborhood, and Croatia is doing the “best” with 14.6 percent unemployment. Youth unemployment is even worse, at well over 50 percent in some countries. Albania has the lowest with 29.2 percent youth unemployment.

 

Unemployment Rates in Europe, July 2016

 

The economies of the Balkans aren’t doing well, there aren’t enough jobs, and the youth are being disproportionately hammered. We’ve seen what a similar cocktail of economic issues has given rise to in the Middle East. This kind of economic duress breeds resentment, hopelessness and eventually conflict.

That resentment often spills over into the political arena. Kosovo declared independence in 2008, but Serbia still doesn’t recognize Kosovo’s sovereignty. Bosnian Serbs want independence in the form of an independent Republika Srpska. There has recently been unrest and tension over a referendum on establishing their national day on Jan. 9, celebrating the 1992 date when Republika Srpska declared independence, thus indirectly invalidating the Dayton Agreement of 1995. The agreement established the Bosnia and Herzegovina federation.

 

Ethnic Groups of Former Yugoslav States

 

Tension remains high between the Croats and the Serbs; a recent article in a Serbian newspaper described relations between the two countries as having entered a period of “cold war,” after Serbia protested Croatian rehabilitation of heroes that Serbia considers war criminals. Macedonia witnessed widespread protests in April that threatened to destabilize the country, which is now heading into a fraught and tense election cycle.

 



  

Islam in the Balkans

On top of the economic and political issues, there is the issue of religion, which is more contested in the Balkans than in any other part of Europe. Muslims represent 96 percent of Kosovo, 58 percent of Albania, 50 percent of Bosnia, 30-35 percent of Macedonia and 20 percent of Montenegro, with smaller minorities in Serbia (3.1 percent) and Croatia (1.47 percent). All told there are about 17 million Muslims living in the Balkans. Many are secular, considering the region’s history of communism.

 

Europe's Muslim Population, 2010

 





The revival of Muslim religious space in the Balkans continues to take place in two broad ways. First is the top-down state-driven official Islam designed to further national security interests. Second is the rediscovery of religion at the societal level. Thus, Islam exists both at the political level as an identity marker and in the form of personal religiosity around informal social networks.

Government-sponsored “official Islam” remains the dominant form of Islam. This is maintained through religious hierarchies, endowments, educational entities and civil society organizations – all tied to the state. However, other forms of Islam increasingly have arisen because of the quest of the believers after the reopening of religious space aided by growth of communications technology. Political Islam seeks to promote indigenous Islam and sees the latter as subversive foreign impulses.

This has led to a division between local traditional moderate Islam and foreign radical Salafi Islam. The former is seen as highly compatible with European values while the latter as antithetical. However, foreign expressions of Islam are also divided into competing trends: Salafism (either through Saudi-sponsored institutions or driven by informal networks tied to individual preachers and militant ideologues) and Turkish forms of Islam (either sponsored through official state institutions or through the Gülen movement). Both forms have their own further subdivisions pushing competing interpretations.

Against this backdrop, there have been reports of increasing radicalization in some Balkan countries in recent years. Islamic State for example has been explicit about its desire to recruit from Bosnia, even threatening to kill a senior Islamic cleric in the country in February. Various small scale attacks in Bosnia over the last year or two bear out this trend. It is also not just the Islamic State. Other groups, some funded by the Saudis or Qataris, provoke tensions with ethnic Serbs in Bosnia. Hundreds of radicalized Bosniaks have joined the Islamic State fight in Syria; others can pass into the European Union via Croatia.

Bosnia is also not the only problem here. Macedonia claimed in early September that IS recruiters have had a presence in Kosovo for at least the last two years. Various Balkan countries have cracked down on potential recruits and have tried to stop the radicalization, but the success of these efforts is so far unclear. Macedonia and Turkey cooperated in September to arrest suspected Islamic militants who had moved to Turkey in order to plan attacks in Macedonia. This is perhaps not yet a serious problem, but it has all the hallmarks of an area where militancy could flourish: struggling economies, disillusioned youth, inter-religious conflict, easy access to weapons and various other forms of smuggling and trafficking, and terrain that lends itself to covert places to hide and plan.

Together, the three dynamics of poor economic performance, political conflict and the potential for Islamist militancy make a usually unstable part of Europe even more off-balance. By themselves these challenges would present serious concerns. But these developments are not taking place in a vacuum, and competition between foreign powers in the Balkans adds another set of variables that does not bode well for the region’s near-term future.
    
Pawns of Other Powers

This year has been busy for Balkan leaders, who have intensified visits with the U.S., EU (and EU representative countries Germany or France), Russia and Turkey. Russian Prime Minister Dmitry Medvedev will visit Belgrade in October. U.S. Vice President Joe Biden visited in August. German Minister of State for Europe Michael Roth visited on Sept. 12. Russian President Vladimir Putin spent a weekend in Slovenia in late July, and Turkish President Recep Tayyip Erdoğan paid a state visit to Croatia in late April. Everyone seems to be looking to intensify their presence and influence in the Balkans.

The EU and the U.S. have two major interests in the region: to avoid any kind of conflict and to diminish Russian influence. NATO is still involved in peacekeeping operations in Kosovo, having dedicated troops to similar operations in Bosnia as well.
 
The EU and U.S. have been involved in the peacekeeping and state-building process in the Balkans and thus have been involved in the region’s politics since the end of the 1990s. Both have granted funds for institutional buildup. The EU has been the largest donor in the region, and most of the countries in the western Balkans have applied to join. While Montenegro, Macedonia and Serbia are unlikely to become members soon, they benefit from the EU financial assistance programs as they negotiate accession. Between 2014 and 2020, the EU has allocated about $2.75 billion under the pre-accession program. These funds are to help the countries build their socio-economic infrastructure, encompassing various sectors from governance to agriculture, education, regional cooperation and the environment.

Russia has also participated in peacekeeping, with troops in Kosovo and Bosnia, and maintains close relations with its historical allies in the region, which are all part of the 
Slavic Eastern Orthodox community. Russia wants to keep the region as a buffer zone, opposing Western influence. Russia is against the idea of building integrated infrastructure for the region, for the simple reason that such infrastructure will connect the region to the West and to NATO countries. Russia needs to prevent the development of military infrastructure that would facilitate movement of Western troops in the region and to the Mediterranean and the Black seas. Since the Ukraine crisis, NATO has expanded its multinational response force, creating a chain of outposts called “force integration units,” which could act like command units and respond to security threats along the alliance’s eastern border, including in Romania and Bulgaria. In response, Russia has maintained a special center for emergency situations in Niš in southern Serbia and has been organizing joint counterterrorism military exercises with the Serbian army since 2014. 

Russia has also expanded its influence in the Balkans by investing in strategic economic sectors, from energy to transportation, tourism and financial markets. In 2008, Gazprom bought a majority stake in Serbian oil company Naftna Industrija Srbije, and Lukoil owns a majority stake in Beopetrol. Russia’s Sberbank and Moscow Bank entered Serbia and Montenegro, while state-run Russian Railways has been upgrading a 350-kilometer (220-mile) stretch of track in Serbia. The Kremlin has also sealed energy deals with Republika Srpska and awarded it a $300 million loan through a private investment fund. Russia is the most important investor in Republika Srpska, after Sberbank bought Austrian Volksbank operations in the region and Zarubrežnjeft invested $700 million to acquire the oil refinery in Brod.

In Montenegro, Russian investment makes up more than 30 percent of total foreign investment, while no individual Western European country accounts for more than 5 percent. Russian money went to almost all sectors of the economy, including tourism, the metals industry and real estate. Russia maintains good relations with Bulgarian business moguls and has increased investment in Macedonia since 2013. However, considering Russia’s current economic problems, its influence will likely stall, which is why Russia sees its position threatened. Meanwhile, Montenegro recently received an invitation to become a NATO member and 
Serbia is courting the Europeans and the Americans for more investment.

Turkey’s interest is primarily in maintaining 
its influence in the Black Sea. At the same time, Turkey maintains close relations with Muslim communities in the former Ottoman Empire for political reasons and through economic activity. In this sense, Turkey has special relations with Bulgaria, which has a large Turkish minority that has some influence in both Turkish and Bulgarian elections, and with Bosnia and Herzegovina, as a few million Turkish citizens claim Bosnian roots, after the large migration of Bosniaks to Turkey in the 17th century. While Turkey doesn’t invest as much as Russia and the West do, most of the funds and initiatives coming from Turkey go to highly symbolic projects, meant to revive cultural links based on the country’s imperial heritage, the Ottoman Empire. But Turkey must maneuver carefully, considering its relationship with Russia. This is why Turkey does not rival the West and Russia in the Balkans, but only seeks to maintain relations with the countries in the region, while keeping a fairly neutral stance toward the other powers interested in the region. 
     
Conclusion

While much of Eurasia looks similar to the way it looked on the eve of the World War II, the Balkans look like they looked on the eve of the World War I. Political borders do not coincide with ethnic boundaries – but this would not be possible, considering the ethnic geography of the region. Several nation-states are still building up their institutional framework, while Kosovo is not recognized by all the countries in the region. Some of the states are members of the EU, some of NATO and some are in accession talks with one or the other. All countries in the western Balkans fear a potential increase in militancy, and they are all facing socio-economic problems.

Balkan politics have historically enabled foreign powers to boost their influence through financial and political support for local governments to avoid instability, which is what foreign powers fear most. With the Russian economy declining, the EU with its own problems, the U.S. looking to avoid any involvement in a potential conflict and Turkey with limited room to maneuver, the Balkan nations need to find solutions to their problems. While they can’t ignore foreign influence, the fragile state of their societies, as well as their location in the European borderlands, make the balancing strategy the best strategy they have.
 
This means that governments in the western Balkans can access financial assistance and political support from multiple external powers. But as the usual creditors encounter economic problems and geopolitical rivalries grow, local regional disputes may intensify. This means the nuanced competition between foreign powers and regional actors could turn into a real conflict. The way these countries will manage their economies and societal demands is key to how things will evolve in the region. 

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