AlbanianEconomy.comYour News from Albania
Russian Deal Dispute Shakes Serbian Govt
Belgrade | 16 December 2008 | Disagreements within the Serbian ruling coalition regarding the energy deal being negotiated with Russia have cast a shadow of doubt on the stability of the government.
Problems came to the forefront last week when Economy Minister Mladjan Dinkic and his team of advisors from his G17 Plus party exited the delegation of negotiators working on the energy agreement with Russia.
Dinkic claims that the government has gone back on its initial stance regarding the deal, agreeing to Russia’s demands to only discuss the sale of 51 per cent of Serbian oil giant NIS to Russian Gazprom for €400 million.
Initially the government claimed that it would make sure to receive guarantees for two other projects it wanted in return for the sale of NIS – the construction of the South Stream gas pipeline through Serbia and the modernisation of an underground storage facility.
While Dinkic claims that the government has bowed to Russia’s refusal to guarantee the two projects and focus on buying NIS, the government says that the initial agreement of intent signed by the two countries in January serves as a guarantee that all the projects would be completed.
Interior Minister Ivica Dacic told daily Vecernje Novosti that a potential falling out with the G17 Plus party could be handled with changes made to the cabinet, stating that a collapse in the government and new elections would be the “worst possible scenario.”
Opposition Serbian Progressive Party leader Tomislav Nikolic said that he would offer minority support to the government just to ink the deal with the Russians but that it would not agree to join the government without new elections.
His party, on offshoot of the hardline nationalist Radical party, is an unlikely candidate for joining the current pro-European ruling coalition, since they do not see eye-to-eye with the government on most of its programme.
G17 plus officials have stated that they have no intention of leaving the government on their own but that if someone from the government believes that G17 should exit the coalition, they should say so.
Both G17 plus and Dacic’s Socialists are junior partners in the government led by President Boris Tadic’s Democratic Party.
Democratic Party official Nada Kolundzija said that the government is stable, despite the disagreements on the gas deal, adding that there would also be no problems in the parliament ratifying a potential agreement reached with the Russians for the sale of NIS, because most of the opposition supports the deal as well.
G17 Plus and other pro-European parties, such as the opposition Liberal Democratic Party, fear that the deal has more political value to the government than economic, since Russia has been a staunch supporter of Serbia’s bid to maintain sovereignty over the southern province of Kosovo, which declared independence from Belgrade in February.
Parties orientated towards the West fear that the government would be willing to sacrifice the economic development of Serbia in order to avoid injuring relations with Moscow, since the defence of Serbia’s territorial integrity and sovereignty over Kosovo is one of the main programmes that the government was founded on.
Dinkic added earlier that Russia insists on maintaining a monopoly over the sale of oil products in Serbia until 2014, is going back on its promise to invest €500 million in modernising NIS, and has offered no guarantees that the European Union’s pollution protection standards would be implemented.
Russia has verbally agreed to have the €10.3 billion pipeline – which is to run through Bulgaria and Serbia before heading out to Western European countries – built by 2015, despite the current international economic crisis, though nothing has been signed to confirm the promise.
Source: Balkaninsight
