South Stream puts Serbia in conflict with EU

South Stream puts Serbia in conflict with EU

Belgrade says it hopes to join the EU, but will not reconsider its participation in Russia's South Stream project.

With the decision by Bulgaria to suspend construction of the South Stream natural gas pipeline, there is more pressure on Serbia, which is balancing its longstanding ties with Russia against its desire to join the European Union.

"The Serbian situation is the most difficult because it 'paid ' the entrance to the pipeline by giving to Gazprom low prices for NIS (Naftna Industrija Serbia – Oil Company of Serbia) and Banatski Dvor (and underground gas storage in Vojvodina)," Jelena Milic, director of the Centre for Euro-Atlantic Studies for Belgrade, told SETimes.

"It is not regulated by the energy agreement with Russia what will happen if Russia gives up the project or if it will not be able to realise its obligations. Serbia counts on incomes of transit and to pay back its debts to Russia," Milic said.

Following the instructions of the European Commission (EC), Bulgaria froze construction plans for South Stream, a 2,380-kilometre long pipeline that would transport Russian gas to Eastern Europe and beyond, bypassing Ukraine and putting additional financial pressure on Kiev in its dispute with the Kremlin.

Bulgaria ended its participation after the EU said the project does not comply with its competition and energy legislation. But Serbia still plans to participate in the project.

Prime Minister Aleksandar Vucic, who met with Russia Prime Minister Dimitry Medvedev in Moscow on July 7th, said the two countries plan to sign a South Stream agreement soon.

"South Stream is a priority project for Russia, and this has become evident in the...