US Politics

The Race for the Balkans: OBOR or EU?

Through the Chinese One Belt, One Road initiative and its huge investments, the Balkans could receive a much needed economic boost but it could also jeopardize the European Union’s political program in the region. Mario Ghioldi explains this race for the Balkans.

BY: MARIO GHIOLDI

A century ago, the European continent was hit by the first World War, which changed the lives and perspectives of millions of people. This landmark conflict exploded mostly due to the strong competition in the Balkans, where three empires were eager to expand their political, religious and economic influence. One hundred years later, under different circumstance, the same region seems to have become the competitive arena between two actors, the European Union (EU) and the People’s Republic of China (PRC) both looking to extend their influences in the Balkans through investments and political initiatives.

Last year, Federica Mogherini, the High Representative of the European Union for Foreign Affairs and Security Policy, posited that “the Balkans can become one of the chessboards where the big power game can be played.” Her statement reflects the important strategic role that the Balkans play for Brussels. It is no coincidence the European Commission adopted a specific strategy for this region entitled ‘A credible enlargement perspective for and enhanced EU engagement with the Western Balkans’ last February.  For the next two years, the plan sets actions in various fields as development, rule of law and cooperation, reaffirming the European Union’s will to strengthen the partnership with the Balkans.

The cooperation was further enforced by the recent summits in Sofia and London, where six Balkans countries, Albania, Bosnia and Herzegovina, Serbia, Montenegro, the former Yugoslav Republic of Macedonia and Kosovo, met with the EU member states on concrete actions related to connections, security and youth involvement. Some of these initiatives included funding for Erasmus+ program, which will be doubled to allow more youth to study in the European Union alongside developing mechanisms of cooperation to stop the illegal migration flows.

Beyond the economic and political assets, the above-mentioned boost in the Balkans-European Union partnership seems to be an attempt to counter the vast amounts of Chinese investments in the same region that have increased in the last two years. Those same fears were also cited by Angela Merkel a few days after the enlargement strategy launched, alleging that the Chinese economic investments were “not in the spirit of the free trade” but rather part of a larger and eventual political strategy.

Currently, the Chinese initiative involves various areas in the Balkans, considered an important corridor of the Silk Road. Beyond owning the Piraeus, bought by China’s COSCO Holding for more than $550 millions, Chinese heavy industry companies have invested in Serbia and Bosnia Herzegovina building steel mills (the most relevant is in Smeredevo near Belgrade) and coal fired power plants. Yet, the most famous and relevant investment concerns the construction of the Belgrade-Budapest railway which provides the access for Chinese and Balkan companies to the European market.

As result of this initiative, which is focused on the state-based decision of investments rejecting the demand of privatization of inefficient industries, the Balkan countries have a reliable alternative to the European Union economic model. But it’s the Beijing government that seems to be the real winner of this partnership. Beyond shaping the local investments of the areas, China is increasing the quantity of loans to the Balkans through project financing, bringing those countries into debt. Basically, there are multiple consequences for the enormous debt owed to China; probably the most important example concerns Montenegro, where the government was forced to limit its welfare policies for the families with multiple children due to its high deficit.

This last link is probably the most worrisome aspect for the European Union, which is eager to extend its membership to the Western Balkans. Nevertheless, the competition between these actors appears unique and much softer than the previous political and economic disputes raised in this area due to the paradoxical position of China. The Russian stance of the last decades taken into consideration, Beijing needs the political regional stability in order to enhance its economic power and long-term investments. This democratic reliability is guaranteed by the European Union’s economic and political actions and the various reforms demanded consistently to the Western Balkans.

Thus, China needs the European Union presence in the area to preserve its stakes. This paradox gives an important and decisive asset to Brussels despite the enormous Chinese investments. At the same time, European countries should respond appropriately to the Chinese economic expansion enhancing their political and economic agenda. Beyond a greater flexibility on the economic reforms, the European Commission should further hasten pressure for those political actions needed for European Union membership, considering the European Union Enlargement road map.

The recent visit of Johannes Hahn, the European Union Commissioner for Neighborhood Policy and Enlargement negotiation, in Serbia and Merkel’s future trip to Macedonia  seem to confirm this strategy, building a new bridge over the Danube and reaffirming the European political or rather economic influence. But will it be enough to reduce the Chinese expansion in the Balkans? Only time will tell.


Mario Ghioldi has an International Relations background through his studies at the University of Siena. In the last year, he worked with the Italian government’s Mission to the United Nations (3rd Committee) and in Nicaragua. He also joined the Salvadoran diplomatic team at the Rome agencies twice.  

Please note that opinions expressed in this article are solely those of our contributors, not of Political Insights, which takes no institutional positions.

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