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As Croatia takes over EU presidency, questions remain about growing Russian influence

With the Croatian EU presidency, attention will be diverted towards the Western Balkans, where Russia is testing the EU’s commitment and resolve.

January 28, 2020 - Joseph Hammond - Articles and Commentary

Croatian flag at the ferry port of Split, Croatia. Photo: dronepicr (cc) flickr.com

The United Kingdom’s prime minister, Boris Johnson, riding on the largest conservative majority in the UK since the 1980s, is set to have his country leave the European Union this month. After January 31st, Brexit will finally disappear from our daily lexicon. Hence with the imminent divorce and EU foreign policy focussed on that and the tensions between the United States and a resurgent Iran – growing Russian influence in Europe has not received the full attention it deserves. 

This month, to little fanfare, Croatia took over the presidency of the European Union. Croatia finds itself in the hot seat as Brexit comes to fruition and other questions on the future ties loom. This is Croatia’s first turn at the presidency. It is the EU’s youngest member having joined only in 2013. Croatia’s announced strategy for the presidency will be based on four main pillars: “A Europe that develops”; “A Europe that connects”, “A Europe that protects”; and finally an “An influential Europe”. It is precisely the issue of influence – in this case what influences are in Croatia, which should concern the remaining member states.

Brexit and Iran aside, the fate of Croatia’s EU presidency may well be decided during the EU-Western Balkans summit in Zagreb in May. Looming over that meeting are ongoing negotiations over Albania and North Macedonia’s admission to the Union. The EU commission has supported membership aspirations of both countries. Indeed, rather than portraying itself in retreat after the British departure, further integration and enlargement is one way that the EU could signal moves in a positive direction. However, it may want to tread carefully in this regard. Serious concerns remain regarding Moscow’s growing influence in the region.

After Slovenia, Croatia is only the second post-Yugoslav state to join both the EU and NATO. And as recently as the early 2000s, Russia was one of Croatia’s top three trading partners. In June 2016, The Economist referred to Croatia as “an economic and political basket-case”. In particular, Russia has a clear ambition to play a role in the future of energy relations in the Western Balkans. Russia has also long-supported the ruling Croatian Democratic Union (HDZ). And like other EU states, Croatia is a significant importer of Russian natural gas. Croatia imports 2.04 billion cubic metres of natural gas since 2018.

At the end of December last year, the biggest trial in Croatian history ended with a verdict favourable to Russian energy interests. A Croatian court ruled that Zsolt Hernadi, CEO of the Hungarian energy group MOL, was guilty of bribing then Croatian Prime Minister Ivo Sanader in order to facilitate a buyout of the Croatian state energy firm INA. The alleged incident was supposed to have taken place as part of privatisation efforts of the Croatian energy company.

The ruling is suspect. The United Nations Commission on International Trade Law cleared Zsolt Hernadi back in 2014. In 2016, the Croatian authorities unsuccessfully sought to repeal that decision at the Swiss Supreme Court. Yet, the Croatian authorities pressed on. One report released by an NGO watchdog details some of the issues with the trial and also points out Russian interests involved in the case as a reason for the persistence.

This is not the first time that Croatia’s privatisation efforts have run into problems. The European Commission had previously referred Croatia to European Court of Justice over a 2002 law on the privatisation of INA. The EU believed that Croatian laws were not in keeping with their European commitments.

Decreasing inter-Balkan energy links and building greater reliance on Russian sources is essential for the Kremlin’s long-term energy goals. Since the early 2000s, various interests in Russia have supported a plan to build a Druzhba-Adria pipeline to bring oil from fields in Samara through to the Balkans and to Croatian pipelines at the port of Omišalj on the Krk Island. The plan known at various stages as the Druzhba–Adria Pipeline Integration Project was championed by Stjepan Mesić, an HDZ stalwart, during his presidency from 2000 to 2010. Krk Island is the largest in Croatia and an LNG terminal is currently under development there, despite opposition from local environmentalists. Though the project has been touted as reducing Croatia’s import of Russian natural gas, at present it is unclear since it is not certain from where Croatia’s future LNG imports will come from. And it should be noted that Russia is one of the world’s largest LNG producers.

Creeping Russian influence also provides ammunition to those who say that EU membership for the Western Balkans should be halted. France is already hesitant to admit North Macedonia and Albania. Hence, the stakes are high. What happens during Croatia’s EU presidency could have far-reaching consequences.

Joseph Hammond is a former correspondent for Radio Free Europe and a freelance writer. He has written for The Economist and the International Business Times, amongst other publications.

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