Balkans' Rising Instability To Exacerbate European Security Concerns

BMI View: The Balkans region will see rising instability and unrest over the coming years, as a result of ethnic or social tensions in Bosnia-Herzegovina, Kosovo, Serbia, and Macedonia, the spectre of Islamic State (IS) gaining a foothold in the region, and the probable weakening of the EU as a policy anchor. Meanwhile, ongoing geopolitical rivalry between Russia and the West in the Balkans could exacerbate existing tensions.

We anticipate rising instability in the Balkans over the coming years, with a high risk that grievances with the status quo could turn violent or even erupt into armed confrontation. Although two decades have passed since the end of the Bosnian war (1992-1995) and the Kosovo war (1998-1999), and despite a political shift away from ultra-nationalism since 2000, ethnic tensions remain a key feature of the political landscape in the region. This is exacerbated by differing interpretations of the motivations and responsibility for atrocities and crimes committed during the 1990s Yugoslav wars, the recentness of those wars, and the fact that the economies of the region remain mired in high unemployment and poverty.

The Geopolitical Significance Of The Balkans

A Zone Of Great Power Rivalry
The Balkans In A Eurasian Context

Balkans' Rising Instability To Exacerbate European Security Concerns

BMI View: The Balkans region will see rising instability and unrest over the coming years, as a result of ethnic or social tensions in Bosnia-Herzegovina, Kosovo, Serbia, and Macedonia, the spectre of Islamic State (IS) gaining a foothold in the region, and the probable weakening of the EU as a policy anchor. Meanwhile, ongoing geopolitical rivalry between Russia and the West in the Balkans could exacerbate existing tensions.

We anticipate rising instability in the Balkans over the coming years, with a high risk that grievances with the status quo could turn violent or even erupt into armed confrontation. Although two decades have passed since the end of the Bosnian war (1992-1995) and the Kosovo war (1998-1999), and despite a political shift away from ultra-nationalism since 2000, ethnic tensions remain a key feature of the political landscape in the region. This is exacerbated by differing interpretations of the motivations and responsibility for atrocities and crimes committed during the 1990s Yugoslav wars, the recentness of those wars, and the fact that the economies of the region remain mired in high unemployment and poverty.

The Geopolitical Significance Of The Balkans

The Balkans have tremendous geopolitical importance to major European powers, as it comprises the westernmost extent of a vast macro-region incorporating the Black Sea, Caucasus, Caspian Sea, Central Asia, and northern part of the Middle East. This is a zone of 'great power' competition, with the US, EU, Russia, and Turkey vying for influence. For the EU, the Balkans pose both risks and opportunities. As regards risks, the Balkans are the main transit point for migrants from the Middle East and beyond seeking to enter the EU, and thus very much tied into the ongoing migrant crisis since 2015. There have also been persistent reports that Islamic State (IS) is gaining adherents among the Muslim populations of Bosnia, Albania, and Kosovo. Yet the Balkans also present opportunities for further EU and NATO expansion. Of the Balkan states, Albania, Bulgaria, Croatia, and Romania are already in NATO, and the latter three are members of the EU, but both organisations eventually aim to expand further. The Balkans also serves as a key energy corridor for the EU.

A Zone Of Great Power Rivalry
The Balkans In A Eurasian Context

Resilience Of Hard Nationalism To Sustain Multiple Flashpoints

The post-World War II Socialist Federal Republic of Yugoslavia collapsed in 1991 as a result of rising nationalism, which quickly morphed into ultra-nationalism and led to wars that killed around 100,000 people in Bosnia and several thousand in Kosovo, and displaced millions of people. The wartime leaders of Croatia, Bosnia, and Serbia all left the political scene in 2000, but 'hard' nationalism remains powerful across the region. This is unsurprising, given the recent memories of the 1990s conflicts, disagreements over atrocities and war crimes committed, and unresolved disputes over mismatches between borders and populations. The emotiveness of these issues means that episodes of outrage can flare up at a moment's notice, risking violence and impeding regional co-operation.

Serbia-Kosovo/Serbia-Albania tensions: Serbia has never accepted the independence of its southernmost province of Kosovo in 2008 after a separatist conflict in 1998-1999 that was backed by a very heavy NATO bombing campaign in 1999. Kosovo had long been a distinct region of Serbia owing to its predominantly ethnic Muslim Albanian population that was heavily repressed. After Serbia was forced to withdraw from Kosovo in 1999, large numbers of Serbs and other minorities were forced out by the Kosovars. However, several tens of thousands of Serbs remain in the northern Kosovo city of Mitrovica, which has been the main flashpoint in Serbia-Kosovo tensions. An EU-brokered deal in April 2013 awarded the local Serbian community a degree of autonomy, but this was deemed insufficient by the Serbs and too generous by Kosovars, meaning that neither side was satisfied. Thus, tensions periodically bubble to the surface, occasionally leading to violence.

The Serbian train incident of January 2017 underscores how quickly tensions can flare up ( see 'Temporary Heightening Of Tension After Nationalist Provocation', January 18, 2017). In that incident, Serbia sent a train with the slogan 'Kosovo is Serbia' in multiple languages painted on it towards Mitrovica, triggering outrage amongst Kosovars, whose government refused to allow the train to enter its territory. The train was supposed to have been the first rail service between Belgrade and Mitrovica since 1999. The episode briefly threatened to result in an armed confrontation between the two sides. It also demonstrated that elections often serve as a trigger for nationalist gestures, given that Serbia is due to hold a presidential election in April 2017 and the leading candidates are strong nationalists. Although conflict was avoided, we cannot preclude deadly clashes in future.

It is unclear whether the West has the means to intervene in the event of a future conflict. NATO maintains a force ('KFOR') of 4,289 troops (as of December 2016) in Kosovo, with the largest contributor being the United States (675 troops). However, this is far fewer than the 30,000 troops that KFOR deployed into Kosovo in 1999. Moreover, most NATO states have little appetite for becoming involved in a new ground war, and the new US Trump administration is likely to be more interested in prioritising the fight against IS in Iraq and Syria or containing China in the South China Sea. Thus, a future crisis in Kosovo will not necessarily be treated as a priority by the US.

Serbia's tensions with Albania are largely a function of its relationship with Kosovo, given that Kosovars are ethnically Albanian and receive support from Tirana. However, Albania joined NATO in 2009, meaning that Serbia is unlikely ever to attack that country, for fear of triggering NATO retaliation. The protection of NATO enjoyed by Albania arguably emboldens Tirana in its dealings with Belgrade, which is outside the alliance. Overall, the main driver behind efforts to improve Albanian-Serbian relations is the EU. Both countries recognise that their efforts to join the EU will suffer, if they continue to bicker.

Bosnia-Herzegovina vs Republika Srpska tensions: The Bosnian war ended in 1995 with the creation of two separate entities under a nominally unitary state - the Bosniak (Muslim)-Croat Federation, and the Serb-dominated Republika Srpska (RS). This is overseen by an International High Representative. However, the federal government in Sarajevo has largely been paralysed, because voters keep electing nationalist politicians who prevent the state from functioning normally. The biggest fault-line in Bosnia is between the Sarajevo government and RS, with the latter, under the leadership of nationalist president Milorad Dodik, increasingly calling for independence. RS leaders saw the independence of Montenegro and Kosovo in 2006 and 2008, respectively, as an opportunity to legitimise their demands, given that this marked a change of borders in the Balkans. RS nationalists also saw the Scottish and Crimean referendums in 2014 as providing justification for a future independence referendum of their own; Dodik wants to hold one in 2018. However, the Western powers have refused to countenance independence for RS, thus increasing Serbian perceptions that the West is biased against them. For its part, Serbia is also reluctant to support RS's independence, fearing that this would fatally cripple Serbian ambitions to join the EU. Thus, prevailing international circumstances do not favour RS's independence ( see 'Republika Srpska: How Likely Is Independence?', February 26, 2016).

Even so, there are several possible paths for RS to eventually split from Bosnia:

Firstly, the RS government could hold a referendum regardless of what Sarajevo and Western capitals say. Possible triggers include 1) a decisive push by Bosnia to join NATO (which Bosnian Serbs oppose); 2) a move by Sarajevo to centralise more powers at the expense of RS; and 3) any change in the status of Brcko, a district that connects RS's northern and eastern parts and is part of both RS and the Federation.

Rising Separatist Pressure
Bosnia-Herzegovina

A vote for separation would trigger a constitutional crisis in Bosnia, and the poll would almost certainly be deemed invalid by the High Representative. In addition, the West would almost certainly impose sanctions on RS and purge its leaders. In these circumstances, RS would essentially become de facto independent, but would face increasing diplomatic and economic isolation, similar to Moldova's breakaway region of Transnistria, which declared independence in 1992 with Russian support, but is not recognised by any country, including Russia. Serbia too would be under pressure to keep RS marginalised, lest it jeopardise its EU bid. Overall, RS's political and economic future would become bleaker, and it would be forced to gravitate towards Russia, geopolitically.

In a more pessimistic version of the above scenario, following Western denunciation of the referendum and the imposition of sanctions, Serbian nationalists take to the streets en masse, or even take up arms, putting the Bosnian government in the very awkward position of having to decide whether to use force to prevent secession. Most probably, the 10,000-strong Bosnian military would be too small to stop RS's independence, meaning that it would have to rely on NATO for support. Yet this would be problematic, because at present, there are only 600 EU troops in Bosnia, compared to the 60,000-strong NATO force that was deployed there in 1995. Several major Western states would be reluctant to intervene, especially if conflicts in the Middle East and North Africa are prioritised. In addition, many Europeans would wonder why force would have to be used to suppress RS independence, especially if it were achieved democratically. Furthermore, Russia could decide to expand its influence in the Balkans by providing support to RS's secession, including military assistance. The latter scenario would be particularly dangerous, since it would raise the risk of a new proxy conflict in Europe, so soon after the Ukraine conflict. However, this cannot be precluded, in light of events in Ukraine since 2014.

In a 'best case' conflict scenario, RS's secession could follow a brief military stand-off, as per Slovenia's 10-day 'war' of independence in 1991, or the six-day conflict in Georgia in 2008 that resulted in Abkhazia and South Ossetia's de facto independence. NATO would probably lack the appetite for a long conflict to rein in RS. In each case, RS would need to decide whether to become a fully independent state, or seek a merger or confederation with Serbia. There is no guarantee that Belgrade would choose to absorb RS.

The formal separation of RS would probably encourage Croats in the Bosniak-Croat federation, especially in the south, to seek secession too, with a view to joining Croatia. During the Bosnian war, separatist Croats maintained an unrecognised mini-state called Herzeg-Bosna from 1991-1996. At the very least, Bosnian Croats would demand their own entity within the Bosnian-Croat Federation. This would leave a rump Bosniak state centred on Sarajevo.

The RS independence scenario is not our core forecast, but it has become more likely since 2016, given that the EU is likely to weaken after Brexit and the new US administration of Donald Trump appears less interested in Eastern Europe.

Serbia-Croatia tensions: Tensions between the two countries linger from Croatian resentment of Serbian support for Croatian Serb separatists in 1991-1995, and Croatia's military offensives against ethnic Serbs in 1995 that led to more than 200,000 Serbs being expelled. There is also residual bitterness in Serbia about the atrocities committed by the Independent State of Croatia (a Nazi puppet sate) against Serbs between 1941 and 1945. Relations have steadily improved since 2000, and Croatia joined NATO in 2009 and the EU in 2013, giving it greater confidence in regional affairs. For its part, Serbia retains neutral military status, and is a laggard in joining the EU. Croatia, as an EU member, has the ability to veto Serbia's eventual membership, and its threats to do so over historical disputes are fuelling bilateral tensions.

Serbia-Croatia tensions rose sharply in 2015 as both countries struggled to control the flow of migrants from the Middle East; these tensions were defused by EU intervention. However, tensions rose again in 2016 over the status of ethnic Serbs in the eastern Croatian city of Vukovar, which saw heavy fighting in the early 1990s. Although there do not appear to be any obvious casus belli, there is still a risk that Croatia and Serbia could come to blows if neighbouring Bosnia-Herzegovina were to disintegrate, as outlined in the scenarios above. Indeed, a July 2016 survey by the Institute of European Affairs showed that 19.7% of Serbs regard Croatia as their biggest enemy, ahead of the US (18.1%) and Albania (12.2%). A December 2016 plan by Serbia to acquire six used MiG-29 fighter jets from Russia was attributed to the need to counterbalance Croatia.

Old Grievances Portend Future Risks
Existing And Potential Flashpoints In The Balkans

Macedonia tensions: The main fault-line in Macedonia is between the Orthodox Christian Slavic majority (around two-thirds of the population) and ethnic Albanians (a quarter of the population), who are largely concentrated in north-western Macedonia. In the summer of 2001, ethnic Albanians, emboldened by the success of their counterparts in Kosovo, began an armed rebellion against the Slavic-dominated government in Skopje. For a brief time, Macedonia stood on the brink of all-out war, and there was speculation that 'pan-Albanianism' - the desire to unite Albania, Kosovo, western Macedonia, the Presevo valley in Serbia, parts of Montenegro, and even a part of Greece - would trigger a wider conflagration. Western diplomatic intervention resulted in a power-sharing agreement between Macedonia's Slavs and ethnic Albanians that has lasted to this day, but tensions linger. Indeed, a violent clash between security forces and Albanian separatists in the city of Kumanovo in May 2015 led to 18 deaths and was the most serious such incident since 2001.

The political deadlock in Macedonia since 2015 - stemming from opposition to Prime Minister Nikola Gruevski - has left the Skopje government largely ineffective, and elections in December 2016 have failed to break the deadlock. While there is little reason to believe that conflict will erupt, Macedonia will remain a flashpoint in the Balkans.

Islamic State's Influence Bringing New Risks

The Balkan region faces the risk of becoming a key focus of Islamic State (IS)'s bid to establish a foothold in Europe. The majority of the populations of Kosovo and Albania and 50% of Bosnia's people are Muslim, and southern Serbia also has a Muslim-populated region called Sandzak (Sandjak). Although the Balkans' Muslims are predominantly secular and pro-Western, several factors are conducive to the radicalisation of locals. Firstly, the aforementioned states are poor in terms of per capita income, and are characterised by high unemployment, especially among the young. Poor macroeconomic conditions and limited availability of jobs create disaffected elements among the population. Secondly, rampant corruption among the political establishment and state institutions has further fostered disenchantment with the status quo. Thirdly, the EU's Schengen zone restricts nationals of Albania, Bosnia, Macedonia, Montenegro, and Serbia from visiting the EU for more than 90 days within a 180-day time period, thus preventing the easy 'export' of unemployed people (Kosovars need a visa to visit the EU). Fourthly, the open nature of the political systems in the region has likewise been conducive to the spread of radical ideas. In this context, radical Islamism presents an opportunity for at least small numbers among the youth to seek personal or political change.

The spectre of radical Islam in the Balkans first emerged in the 1990s, when thousands of foreign fighters came to defend the Bosniaks from the Serbs and Croats. The vast majority returned to their home countries after 1995. Even so, after the 9/11 terror attacks in the US, security agencies began paying more attention towards possible al-Qaeda cells in the Balkans. There have also been reports in the international media that Gulf states have sought to export an extremist version of Islam to largely secular Kosovo by financing new mosques and training radical preachers. More recently, local security concerns have shifted to the rise of IS.

Balkans A Key Transit Corridor
Main Migration Routes Into Northern Europe

According to estimates from various international media sources, around 300 Kosovars have gone to fight for IS in Syria, making Kosovo the biggest per capita contributor in Europe to militants in IS. In addition, an estimated 200 Albanians and 160 Bosniaks have travelled to IS. This significantly raises the risk of further radicalisation in the Balkan region, when these fighters return home. Further compounding this threat is the ongoing migration crisis facing Europe, with the Western Balkans representing a major route into the EU for refugees from Syria. This could potentially serve as a cover for radical elements to establish a foothold in the Western Balkans and Europe. The sheer number of migrants represents a burden for respective governments, which are ill-equipped to look after them. Against this backdrop, the possibility of increased religious tensions is salient, given the deep-seated acrimony in the region between Muslim ethnic Albanians, Bosniaks and Kosovars, on one hand, and Christian Serbs, Macedonians, and Croats, on the other.

In late January 2017, Austrian police broke up an Islamist terror network with ties to the former Yugoslavia, underscoring the growing risks to Western European security. A future terror attack in a European city with logistical links to the Balkans would make the EU take a tougher line towards the region. This would likely result in tougher controls over immigration from the Balkans into the EU.

Russia-West Rivalry Likely To Increase In Balkans, Especially If EU Weakens

We anticipate further rivalry between Russia and the West in the Balkans, especially if the EU weakens as a result of post-Brexit complications. Russia and Western powers have vied for influence in the Balkans for more than a century. While the Socialist Federal Republic of Yugoslavia pursued an independent path from the West and the USSR during the Cold War, the onset of the 1990s wars reawakened historical rivalries. Russia has long-standing ties with Orthodox Christian Serbia, Montenegro, Macedonia, and Bulgaria, and has sought to play up those ties to maintain influence. During the Bosnian and Kosovo wars, Russia provided diplomatic support for the Serbs, and sided with Macedonia during the near civil war in 2001. Since then, Russia has built substantial ties with Balkan states in the areas of banking, energy, and tourism. Russia's geopolitical ambitions suffered a setback in 2014, when the Crimea crisis prompted the EU to cancel the South Stream gas pipeline project (from the Black Sea through Bulgaria, Serbia, and Hungary), and again in 2016, as Montenegro began the process of joining NATO. In late 2016, Montenegrin authorities claimed to have foiled a plot by Russian and Serbian nationalists to assassinate the Montenegrin prime minister and prevent the country from joining the Western alliance.

Nonetheless, Russia has sought to maintain influence via close ties with Serbia. Serbia is a candidate member to join the EU, but has refrained from seeking to join NATO. Russia has stepped up military co-operation with Serbia in recent years, with Moscow selling arms to Belgrade and floating the idea of Serbia joining the Russian-dominated Collective Security Treaty Organisation, a military alliance comprising several former Soviet states. While Serbia remains committed to military neutrality, the existence of substantial pro-Russian currents in Serbian politics could gradually steer Belgrade deeper into Moscow's orbit, if EU membership proves elusive or becomes less desirable over the coming decade. For example, in 2016, Serbia took steps to deepen co-operation with the Russian-led Eurasian Economic Union, which also includes Armenia, Belarus, Kazakhstan, and Kyrgyzstan.

The scope for Russian activism in the Balkans is significant, given the amount of discontent in the region that could be exploited. For example, Russia could provide support for Republika Srpska's independence, or Serbia's bid to consolidate the Serbian enclave in Northern Kosovo. Moscow could also present itself as a guarantor of Macedonia's stability, if the West shows reduced impetus to support Skopje.

Furthermore, a weakening of the EU would also provide opportunities for Russia to raise its influence in a more indirect manner. If the EU weakens substantially, it would be less able and willing to act as a policy anchor for Balkan states, in terms of pressuring them to reduce corruption and improve governance. Russia could present itself as an alternative anchor, thus giving the Balkan states less incentive to reform themselves.

Turkey Also Likely To Extend Influence

Besides the EU and Russia, Turkey is likely to seek to expand its influence in the Balkans. The region was part of the Ottoman Empire until the late nineteenth century, and Turkey still exerts cultural and economic influence, primarily through ties with Albania, Bosnia, and Kosovo. Some of the planned pipelines from the Caspian to the Balkans pass through Turkey first.

If Turkey does get drawn into Balkan power plays, it is unclear which side it would support. Historically, Russia and Turkey have been rivals in the region, and thus, Ankara may be expected to align with the EU to counter-balance Russia. However, in recent years, Turkey's ties with the EU have deteriorated, while its relations with Russia have improved. This leaves Turkey as a wild card in Balkan politics.

Further Implications Of Future Balkan Instability

  • The EU will need to keep a close eye on the Balkans, even as it manages the process of Brexit and rising populism across Europe. Brussels will need to maintain pressure on Balkan states to keep implementing reforms.

  • Future crises in the Balkans would become major tests of EU unity and Trans-Atlantic solidarity. The Bosnian war exposed deep divisions between the EU's major powers and between the EU and US, and while the West proved more effective and united in Kosovo, it would struggle to achieve this in future, given the weakening of the EU and President Trump's more disinterested attitude towards Europe.

  • Any future conflict in the Balkans could once again create migrant crises for the EU, with Croatia, Hungary, Greece, and Bulgaria on the frontline. These countries are ill equipped to cope with refugees, and would thus experience an upsurge in nationalism.

  • The implications for European energy security from rising instability in the Balkans are quite limited, given the lack of oil and gas transit infrastructure pertinent to European supply. The main new gas pipeline to traverse the region is the Trans-Adriatic Pipeline (TAP), which is due to open in 2020. TAP forms an extension of the Trans-Anatolian Pipeline (TANAP) through northern Greece, southern Albania, and then across the Adriatic to southern Italy. In other words, TAP avoids all the main flashpoints of the Balkans. In any case, even if renewed conflict were to break out in the Balkans, the countries involved would have very little interest in disrupting the flow of energy, as this would result in disruption of their own supply.

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