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South East Europe caught between East and West

The unstable geopolitics of the region and the uncertainty over strategic energy pipelines show that leaders have so far failed to learn the lessons from history – writes Dr Diana Bozhilova

South East Europe or ‘SEE’ is often the bearer of bad news. This is borne out by its historical past – the Balkan Wars and the First World War – as well as by more current developments; the former Yugoslav wars and the 2008 financial-come-economic crisis. The recent economic downturn of the region comes on the back of a painful and protracted transition to democracy for the former socialist states, a period of relative prosperity for Greece and political stability in Turkey.

The latter two would at times argue that they do not in fact belong to the geographic boundaries of SEE, depending on the kind of decade the region is going through – instability and poverty in the 1990s; stability and prosperity in the early 2000s. Accepting that SEE is steeped in its unfortunate history obscures critically positive developments from sight. One of those is the pivotal place it occupies in the continent’s future energy security.
This is not born from electing to believe in geopolitics over state breakdown but by analysing the opportunities and choices before the SEE states.

The reality of energy policy is that it can only exist if energy security can be guaranteed. In turn, this is a key factor in determining the future opportunities and choices before the SEE economies. Energy security concerns have plagued the area for much of its recent history and have in turn determined its present opportunities. Excepting Greece and Turkey, the remaining states were part of the former Soviet sphere of influence and one of its lasting legacies is energy transmission infrastructure of Soviet origin and design.

The Balkan pipeline has rendered the states of SEE almost exclusively dependent on Russian energy resource supply. In turn, Russo-Ukrainian disputes – which at times led to transmission system shutdowns – have negatively impacted the economies of states. The collapse and dissolution of the former Soviet sphere of influence has caught the nations in the middle of various disputes between Russia and the former Soviet constituent state of Ukraine, as well as between Russia and the European Union. What choices can SEE then make given these limited opportunities?

The region can in fact elect to make some geopolitically strategic choices, though they come with a number of provisos. During the early 2000s, the so-called ‘good years’, SEE was dominated by rhetoric of the region serving as an energy hub for Europe. This was not, however, sustained given SEE’s path-dependent failure to unite. So, no news there then. The rhetoric was then taken up individually by the constituent states.

For some, this became an intrinsic part of foreign policy – Turkey and to some extent Greece. For others, it turned into a tool for domestic party politics infighting and squabbles – Bulgaria, Romania, and Serbia. The harshness of the economic crisis weakened the objective chances of all states, given that they are in fact uncompetitive economies. Turkey capitalised the most on the energy hub rhetoric by applying its relative political stability and success in weathering the economic crisis to forging dispassionate but economically strategic ties with Russia; therefore adding another energy source to its plentiful choices of Azerbaijan, Iraq, Iran and others.

Greece, for its want and the TGI gas transportation project notwithstanding, has been preoccupied by the domestic fallout from the economic crisis to be able to compete in the essentially very costly race that the construction of energy infrastructure is. Their most recent attempt is squarely focused on liquid natural gas hub top notch, if they can raise the funds to execute it. Bulgaria, Romania and Serbia for their part continue to be marred in petty domestic political parties striving to be able to project continuity in decision-making, an essential precondition for energy policy making.

Finally, the persistent lack of unity among states means that pan-SEE energy interconnectors are still deficient in quantity and capacity, leading to waste and shortage of energy within the region, making the economics of supply rather costly. The SEE states use more than twice the energy intensity of Western Europe. Energy is wasted through dated and declining industries from the recent past, old infrastructure in need of replacing and poor household insulation among others. The states are at the same time rich in renewable energy resources, primarily hydro, wind, solar and biomass. By 2009, this was hailed as the next growth market and a springboard out of recession. However, conflicting and unstable domestic legislation meant that the potential of this was poorly utilised.

Where to go from here? The Nabucco pipeline’s demise, the big time pan-European project for energy diversification linking the Near East via SEE to Western Europe, has collapsed the hopes of many in the region – and certainly of those staunchly holding onto their seats ‘on the right’ that is all those Russophobes which perceive Russia as the greatest evil SEE has ever been afflicted with. To them, the most recent implementation of Nabucco’s nemesis – the 50 per cent Russian-backed South Stream – is to be the final nail in the economic coffin of SEE. But they might wish to re-evaluate their position.

First, Nabucco died a slow death that was however almost always in sight because the European Union has no common energy policy, therefore preventing it from investing in common infrastructure, which serves its own interests unlike the Russians. Second, the stabilisation of Russia under Vladimir Putin has gone hand-in-hand with it reclaiming some of its lost regional influence and so the Near East was no longer prepared to court the Europeans with promises of subscribed supply capacity enough to fill up the Nabucco pipeline. Third, the remaining non-Russian owned 50 per cent of South Stream is split three ways between the Germans, the French and the Italians. The staunch SEE Russophobes may wish to re-consider the changing constellations within the European energy landscape.

For Russia, energy is a critical tool of foreign policy making – hence, the partnership with the Turks – and they are consistent and purposeful in its pursuit. South Stream, similar to Nord Stream would allow them to sell directly to the EU, avoiding the Ukrainian transit, and as the pipeline lands directly on the Bulgarian Black Sea coast in one direction and the Turkish coast in a second direction – to penetrate SEE. For the Russophobes this is setting in stone SEE’s dependence on Russia for energy security.

For pragmatists, this is the only logical solution to diversify and modernise the energy infrastructure for the time being, given the reality of the SEE geography, its profound economic poverty and weakness – and its continued failure to unite around a common cause. It is almost in spite of the SEE stubbornness that its rhetoric of bridging East and West is still being realised. In some respects, the present scenario offers more opportunities to SEE than the region might be wishing to see for itself. It is a difficult and often thorny task to balance between two great powers – the EU and Russia in this instance – but at the same time, it is a very powerful position to be in in itself, if only SEE can avoid repeating the mistakes of its past.

Dr Diana Bozhilova is convenor and lecturer in politics and international relations at The New College of Humanities in London

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