On Spring 2008 Serbia signed two strategic agreement. The one was a Stabilization and Association Agreement (SAA) with European Union and the second one was a preliminary energy deal with Russia. The first is since then suspended but the second one got some flesh on the bones on Xmas-week. Both deals are implementing Serbia’s European perspective although from different angels.
SAA could be described as a roadmap guiding Serbia’s way into EU. When implementation really starts it means starting long negotiations where some 80.000 pages of EU regulations are applied to Serbia’s legislation. During the process and especially afterwards with membership the carrots include e.g. access to EU’s structural funds and different (~500) development programmes. With these promises or visions EU is using its sc. “soft power” to integrate the key player of West Balkans under the influence of EU.
Serbia will come to an energy hub of West Balkans
Xmas eve Russian and Serbian Presidents and related companies from both sides signed an umbrella agreement including three parts:
- Under the contract for the sale of NIS, Gazprom will purchase a 51 percent stake in the company for EUR 400mn, and invest a further EUR 547mn in restructuring. The contract, adopted during a government conference call, states that the buyer will secure a loan of EUR 500mn, repayable over 14 years, in order to implement the investment.
- Second part includes construction the underground gas storage facility in Banatski Dvor that would be able to hold 300 to 800 million cubic metres of gas.
- Thirdly the Presidents signed an umbrella agreement providing political guarantees that Serbia will receive a stretch of the €10 billion South Stream gas pipeline project is planned to distribute gas from Russia through Serbia and Bulgaria, branching out finally to Western European countries.
Sure NIS was sold under today’s market prices. However if the two other parts of deal will be implemented the deal will be win-win both to Russia and Serbia.
NIS would also provide Gazprom’s first refineries outside of Serbia. With a network of about 500 gas stations allocated in Serbia (including Kosovo), as well as in Bosnia and Herzegovina and Montenegro, Serbia’s oil monopoly is strategically significant in the supply of neighbouring regions as well. Also when South Stream is completed and fully operational (est. 2015), the pipeline would make Serbia an energy hub in the region.
More over global energy game in my article “Powerplay behind the new Cold War”.
While EU has used its “soft power” and promises to Serbia Russia has used hard currency. In regards of Serbia’s European Perspective this does not necessary mean any swift from pro-Western to pro-Eastern side. From my point of view the situation and its prospected development will allow to Serbia a more balanced approach to its future. While energy will be on the top of EU’s priorities Serbia will have same time more leverage with its negotiations over SAA and other relations with the EU.