Europe's Next Separatist Time Bomb Is Ticking in the Balkans

(Bloomberg) -- Europe’s latest separatist threat is in its most volatile region: the Balkans. 

Bosnian Serb leader Milorad Dodik wants to pull his faction out of Bosnia-Herzegovina, breaking the tripartite power-sharing agreement that’s kept it together since the 1995 peace accord that ended Europe’s deadliest conflict since World War II. Dodik’s stance has earned him economic sanctions from the U.S.

Europe's Next Separatist Time Bomb Is Ticking in the Balkans

He can rely on a longtime friend: Russia. Dodik and Russian President Vladimir Putin have met seven times since March 2011, according to Kremlin records. He’s also met with Foreign Minister Sergei Lavrov five times in the last decade. And Russia is the no. 2 investor in Dodik’s territory, Republika Srpska, after Serbia.

“Bosnia is undergoing a silent breakup, and that’s best for it,” Dodik said in a recent interview. “If we saw a chance we wouldn’t miss it. Nobody should doubt that.” As for Russia, “I have not had a single unpleasant situation with the Russians. With others from the West, I always face an ultimatum.”

Much of the western Balkans has managed to shake off the burden of the bloody wars that tore apart the former Yugoslavia, but decades of international aid have failed to change much in one of Europe’s poorest countries. Bickering among Bosnia’s three ethnic groups, which are bound together in a complicated power structure but divided by religion, has crippled state institutions.

The country’s governing entities are unable to agree on basic economic reforms required by the International Monetary Fund, whose three-year program with the country is already off-track after Bosnia failed to pass its first quarterly review. Gross domestic product of just $17 billion, just over 15 percent of the EU per-capita average, is helped by remittances from abroad, central bank Governor Senad Softic said in an interview in Sarajevo.

“Bosnia is experiencing its most serious crisis since the end of the war,” said Timothy Less, director of the Nova Europa political risk consulting firm in Cambridge, U.K. “Not only have the shared institutions of government reached the point of near total breakdown, no one seems particularly interested in reconstituting them.”

Europe's Next Separatist Time Bomb Is Ticking in the Balkans

To Svetlana Maksic, whose Bosnian Serb father was killed in the war, little has improved since then. She spent her childhood helping her mother rebuild their house damaged by mortar fire.

The walls are whole again and occasionally she can work as a nurse in Germany for paychecks that are unfathomable to most people in her hometown. But when she can’t get those jobs, she’s stuck tending a rickety vegetable stall by the road outside Sokolac, a town of 17,000 east of Sarajevo.

“I can’t spend the rest of my life like this,” she said, her sad smile revealing missing teeth. “I’m already 31, and if I don’t make some change quickly, I am doomed. I wish they could end this agony. Who can possibly keep people together if they don’t want to be together?”

Three Utilities

The Bosnian Serbs aren’t unique among the other two principal ethnic groups, the Croats and the Muslims, in failing to cooperate. Key companies and institutions -- such as telecom operators and statistics offices -- mirror the split.

“You have Muslim electricity, Catholic electricity and Orthodox electricity,” said Valentin Inzko, the Austrian who heads the Office High Representative for Bosnia, referring to the three power companies operating in the country. “The current situation actually suits all politicians.”

Bosnian Muslims, who account for half of the country’s 3.7 million citizens, accuse Dodik of hurting the country’s future.

Leaders like him “conduct destructive, secessionist and destabilizing politics that create problems not only for Bosnia-Herzegovina, but will have consequences for the region and for the whole of Europe,” Bakir Izetbegovic, the Bosnian Muslim leader, said in a statement. 

The Croats, for their part, oppose dissolution. But if the Bosnian Serbs do pull out, they would probably push for a three-way division of the country and then seek to join neighboring Croatia, said Zarko Puhovski, a political science professor at the University of Zagreb.

Spelling Catastrophe

“In that case, which I think is very unlikely, that Bosnian Serbs secede, it would spell catastrophe for the rest of Bosnia-Herzegovina,” he said, adding that “This time around, there is no appetite for war.”

Russia says it’s committed to the 1995 Dayton peace accords but officials have indicated Dodik is being unfairly blamed for the problems threatening the peace agreement. Lavrov pledged at a March meeting in Moscow with the Bosnian Serb leader to continue to develop ties with his faction and to pressure Western nations not to violate the rights of ethnic groups in Bosnia.

“As we develop relations with Republika Srpska, we are closely tied together, especially since in terms of our approach to international affairs and respect for the Dayton accords we have a lot in common,” Pyotr Ivantsov, Russian ambassador to Bosnia and Herzegovina, said in an interview last month posted on the Foreign Ministry website.

Dodik, whom then-Secretary of State Madeleine Albright called a “breath of fresh air” in 1998, fell out of favor with western powers starting in 2006. By 2013, he was no longer using the word genocide to characterize the 1995 killing of some 8,000 Muslim men and boys in Srebrenica, eastern Bosnia. In January, the U.S. Treasury Department slapped him with sanctions, alleging that by obstructing the Dayton accords that have kept the country stable he “poses a significant threat to the sovereignty and territorial integrity of Bosnia and Herzegovina.”

Dodik believes time is working for him, and that Bosnia will simply fall apart even without a Serb independence referendum, which he considered and decided against for now.

“Republika Srpska will be a country one day,” he said in a recent interview with Belgrade-based Vecernje Novosti. “Whether it’s in five, 10 or 15 years, it doesn’t matter. I guarantee an independent Srpska will fall into our lap like a ripe apple.”

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