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Montenegro - Russia Relations

Montenegrin officials accused Russia of backing a coup attempt on election day 13 October 2016 to topple the pro-Western government because of its NATO bid. On the day of the parliamentary election, some 20 ethnic Albanians were arrested on suspicion of plotting an armed revolt in the countrys southern regions. Special Prosecutor Milivoje Katnic accused a group of Russian nationalists of being behind a coup allegedly aimed at assassinating Prime Minister Milo Djukanovic with the intention of preventing the country from joining NATO. the pro-Russian Democratic Front was planning protests following the election, and whose leaders had openly promised to their supporters that they would seize power by Oct. 17. The alleged plot included landing parties from Moscow and Belgrade, arms caches, plans to use snipers and surrounding the army barracks.

Russia poured money into Montenegro's election campaign in an attempt to derail the country's progress towards joining NATO, the country's Prime Minister Milo Djukanovic said three days ahead of an election. He said opposition parties were being financed by Moscow, which saw Sunday's parliamentary vote as a final opportunity to stop the Balkan region's rush to integrate with the European Union and the Atlantic alliance. "Traditional opposition, pro-Serb parties are now proponents of Russian interests in the Balkans," he added."These elections are the last chance for opponents of Montenegro and the Balkans adopting European values," he said.

Damir Marusic wrote in the American Interest, 30 October 2016, " if the story, as Ive tried to reconstitute it, is true and the Russians were in fact involved in a failed coup against a sovereign country trying to align itself with the West, it should give pause to those pundits who still think that a workable equilibrium with the Kremlin is somehow attainable. At the Valdai conference this past week, Russian President Vladimir Putin indicated that he increasingly saw talking to Washington as pointless. With old spies running the Russian state, the conversation appears to be going back into the shadows, where these men are most comfortable."

The Adriatic republic of 620,000 people has strong economic and traditional ties with Russia, another predominantly Orthodox Christian country. At one point Montenegro was a Russian bastion in the western Balkans; but, thats completely changed. Under the government of Prime Minister Milo Djukanovic, Russian influence has lessened considerably. So for example, Montenegro signed up to the sanctions that were imposed against Russia following the events in Crimea. Russia would like to restore its influence in Montenegro; before 1914, Montenegro's closest official ties were with Russia, and included marriages between the respective royal families.

Comments and actions by Russian officials have done more to irritate Montenegrins than build friendships, however. On 08 August 2007, after meeting with then-PM Djukanovic, Russia's minister for extraordinary situations, Sergey Shoigu, gave an interview to the leading local paper. His "warning" that Montenegro risked its friendship with Russia if it continued to pursue ties with NATO irritated a broad range of the Montenegrin public, and did nothing to deter Montenegro from seeking and gaining membership in NATO's Partnership for Peace in December 2006.

According to media reports, PM Djukanovic discussed a defense relationship with PM Putin in their late August meeting in Sochii, but apparently nothing came of that talk, while Montenegro was in close consultations with both NATO and the US on planning its national security and defense policies.

From January 2001 through November 2006, foreign direct investment (FDI) in Montenegro totaled euros 995 million. (FDI prior to 2001 was essentially non-existent, due to conflict and sanctions.) Russian FDI amounted to euros 135 million, 13.5 percent of the total. This is vastly lower than the reported estimate of Russian PM Putin who claimed euros 2 billion of Russian investment in Montenegro (as reported in US Media in late 2006). Before real estate sales (included in FDI statistics) took off in 2006, Russian investment was seven percent of the total FDI, and primarily attributable to Rusal's purchase of Kombinat Alumina Podgorica (KAP - aluminum factory) and the related bauxite mines near Niksic. Midlands Industry, a UK-based but Russian-owned firm, walked away from its 2004 acquisition of the Niksic steel works in late 2005. It had paid the nominal sum of 1000 euros for the plant but proved unwilling to make the investments called for by the contract.

Rusal, now the world's largest aluminum producer headed Russian Oleg Deripaska, purchased the Kombinat Alumina Podgorica (KAP - Aluminum Factory) and the related bauxite mines near Niksic in late 2005, paying euros 48.5 million kap, and euros 9 million for the mines. The privatization and sale of KAP, whose revenues at the time equaled 12 percent of Montenegro's GDP, was steeped in controversy. KAP's share of gdp is relatively steady, at 14 percent in 2006, resulting from strong global and local prices for aluminum. The new owners discontinued providing information to the general public about their operations

While Russians are not major investors in Montenegros tourism sector, their holdings are prominent. The Hotel Splendid in Becici (near Budva) underwent massive reconstruction after it was acquired from the government for euros 2.4 million in late 2003 to a group of Russian and Montenegrin investors: Montenegro Stars Group. Montenegro Stars owned three hotels near Budva (the others being Hotel Montenegro and Hotel Blue Star), but it was the Splendid that was the 800-pound gorilla on the beach, and which was subjected to a bombing campaign by organized crime elements seeking to extort money during its reconstruction. The chief of the Montenegrin police was assassinated in August 2005 while investigating the bombings and other allegedly related crimes.

There is substantial foreign ownership of Montenegro's banks, but coming from France (Podgoricka Bank - 1st in size), Slovenia (Montenegro Banka - which earlier absorbed Euromarket Banka - 2nd in size), the US (Opportunity Bank - 3rd in size), Hungary (Crnogorska Komercijalna Banka - cvb - 4th), and austria (Hypo-Alpo-Adria - 5th). Russia had made no investments in Montenegro's financial sector. Conversely, the smaller Atlasmont Banka, domestically owned, had a representative in Moscow.

PM Putin's reported comment that Russians have invested euros 2 billion here contrasts with the 135 million reported to the Central Bank of Montenegro (CBCG). Montenegro, through its state prosecutor for organized crime and its administration for the prevention of money laundering (Financial Intelligence Unit - FIU), cracked down on money laundering, and Russians were caught up in their nets.

The Russian presence in Montenegro is noticeable, but has to date not resulted in significant influence. Nor is the presence as large as often reported. Contrary to popular perception, KAP was not Montenegro's largest privatization. Promonte (telecommunications) was purchased by Norway's Telenor for euros 116 million in 2004. Hungary's Matav RT bought Pro Montes competitor Telekom CG in 2005 for euros 114 million, and Hellenic Petroleum bought jugopetrol ad kotor in 2002 for euros 100.5 million. Overall, Slovenia has made the largest investments in Montenegro; Russia is seventh.

Stories about mysterious Russian mafia or businessmen (usually seen as the same thing in local popular culture) sell, and contribute to an exaggerated perception of a large Russian presence. Additionally, the opposition and others are keen to portray the Montenegrin government as corrupt, and portraying government officials as turning a blind eye to, or even being in collusion with, Russian businessmen who can be portrayed as uniformly corrupt and corrupting.

The High Court in Podgorica sentenced a group of 14 people on 10 May 2019 on terrorism charges and creating a criminal organization as part of an October 2016 attempt to overthrow the government and scupper the country's NATO membership bid. Among the convicted were two alleged Russian military intelligence agents Eduard Shishmakov and Vladimir Popov who were tried in absentia. Analysts say the 19-month trial has revealed one of the Kremlin's most-audacious gambits for influence to blunt the Balkans' integration into Western structures such as NATO and the EU at a time when the bloc has been accused of losing focus on the region.

The court found that the group of Serbs, Russians, and Montenegrins had plotted to occupy the country's parliament during 2016 parliamentary elections, assassinate then-Prime Minister Milo Djukanovic, and install a pro-Russian leadership. Dukanovic, who staunchly supported NATO accession and is currently president, had been the most powerful man in Montenegro since 1991.

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Page last modified: 23-05-2019 18:56:25 ZULU