Vol. 3 - Issue 32

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AUGUST 3 - 9, 2020 – VOL. 3 - ISSUE 32

SOUTHEASTERN EUROPE

AT A GLANCE

SOUTHEAST EUROPE DIRECTORATE

PROVIDING KNOWLEDGE TO THOSE WHO SHAPE THE FUTURE “SOUTHEASTERN EUROPE AT A GLANCE” (ISSN: 2654-0304) is a weekly review of the most significant current political, economic, energy, defense, and security news of Southeastern Europe. It covers 14 countries; Albania, Bosnia & Herzegovina, Bulgaria, Croatia, Cyprus, Greece, Kosovo, Moldova, Montenegro, North Macedonia, Romania, Serbia, Slovenia, and Turkey. However Greece enjoys its own weekly review for a more detailed presentation of its current affairs (GREECE AT A GLANCE).

This ambitious newsletter aspires to become an informative “tool” for anyone who is interested in the region and wishes to have knowledge of the non-stop current developments and challenges. “HERMES” Institute is not a news agency and it is not one of its ambitions to become one but it is strongly believed that today’s events provide the necessary material to understand the future and to analyze situations that may affect in peace, stability, and growth of the region.

“HERMES” I.I.A.S.GE

“HERMES” Institute of International Affairs, Security & Geoeconomy (“HERMES” I.I.A.S.GE) is an independent, non – governmental, non – profit organization, consisting of scholars dedicated in the research and analysis of international affairs in regional and global level. The Institute aims at providing objective, scientific, and reliable research analysis through a variety of studies contributing effectively and constructively in the public dialogue and the evolution of scientific knowledge.

“HERMES” Institute for Foreign Affairs, Security & Geoeconomy

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speech,” AMC stated on Tuesday. On Monday, at th ALBANIA: August 4 , the European the behest of the Special Anti-Corruption Prose- Bank for Reconstruction and Development cution Office (SPAK), the Albanian Government (EBRD) is mulling whether to lend Albanian seized the assets of Ylli Ndroqi, President of the company Korporata Elektroenergjetike Shqiptare two television channels. According to SPAK, (KESH) 9.5 million euro for a floating solar panel there is reasonable suspicion that Ndroqi has been project that may help reduce the companies’ reli- involved in criminal activity in Turkey, Italy, and ance on hydropower. The 12.9 MW floating PV Albania, and that his wealth has been accrued via plant is to be constructed on the reservoir of the this criminal activity. The AMC noted that deci- Drin River near Vau i Dejes near Shkodra. The sion to seize the two TV channels has enabled the EBRD said that the project will strengthen Government to appoint its own administrators, KESHs performance and reduce their reliance on thus de facto bringing their editorial line, too, hydropower. This will occur due to the floating “under seizure.” The Government decision to plant’s impact on water levels in the existing res- send armed Special Police units to premises of ervoir. With a price tag of 13.9 million euro, the TV ORA and Ora News was called out as intimi- plant has been planned since December 2019 and dation of journalists working there, but also for when completed, it would be the largest plant of “creating a chilling effect on other media and its type in the Western Balkans. The power gener- journalists critical of the Government.” The AMC ated through the project would be sold locally demanded the Albanian Government to order the within Albania. Currently, KESH owns the 260 Special Police units to leave the premises. They MW Vau i Dejes Hydroelector Power Station called on judicial bodies to re-evaluate the seizure which has three hydropower plant units on the order for the two television channels in favor of Drin river. Near Elbasan, the construction of Al- freedom of information. (www.exit.al.com) bania’s first floating solar panel park is underway. th A project between Statkraft and Ocean Sun, the - August 7 , the US Embassy in Albania has output of the park will be some 2 MW. The slammed the “expensive campaigns” behind “im- EBRD had previously given a 9 million euro loan portant cases” reviewed by the reformed justice to support investments in green energy projects in institutions that attempt to “deny the truth” and Albania. It was hoped that the loan could facilitate “escape justice.” The statements come after the the shedding of some 21,000 tons of CO2 across Special Anti-Corruption and Organized Crimes the region, each year. (www.exit.al) Prosecution (SPAK) and the Albanian State Po- lice (ASP) seized assets of Ylli Ndroqi, owner of th - August 4 , Albania Media Council (AMC) has two TV channels (Ora RTV and Ora News), due slammed the Government’s decision to send Spe- to suspicions that his revenues derived from drug cial Police units to seize TV ORA and Ora News trafficking. The US Embassy and Ambassador after a Court order as “a de facto attack on free Yuri Kim expressed in social media their strong speech.” “The attack by FNSH and RENEA on the support of the SPAK and ASP. “Let’s be clear: premises of these two television stations critical of this is about punishing known criminals – nothing the Government is a de facto attack on free more, nothing less,” Kim stated. While they did

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not mention Ylli Ndroqi’s name, his case and reactions in some of the media seem to be the BOSNIA & HERZEGOVINA: th push for the statements. “The US Embassy August 7 , according to the latest report from the strongly supports the ASP and SPAK’s independ- US State Department’s Global Engagement Cen- ent and professional work. Justice sector profes- ter, Russia has meddled in Bosnia’s elections as sionals – Police, Prosecutors, and Judges – must well as media acquisitions in Bulgaria, Greece be allowed to conduct their work free from threats and Serbia through its propaganda centers like the and intimidation, no matter who the defendant is. “Quasi-think-tank” KATEHON and associated It is time to allow them to carry out their duties proxies and media outlets. According to the State and support their efforts to combat organized Department, the main goal of the report titled crime. This is the only way for Albanians to get “Pillars of Russia’s Disinformation and Propa- the professional and impartial justice system they ganda Ecosystem” is to expose Russia’s propa- deserve and to make progress towards EU inte- ganda and disinformation tactics. “Russia’s disin- gration,” the US Embassy wrote on social media. formation and propaganda ecosystem is the col- (www.exit.al) lection of official, proxy, and unattributed communication channels and platforms that Russia COUNTRY ASSESSMENT : uses to create and amplify false narratives,” the report states. According to the GEC “the Kremlin Seizure of ORA RTV and ORA News due to their bears direct responsibility for cultivating these owner, Ylli Ndroqi accusations for being involved tactics and platforms as part of its approach to in drug trafficking has provoked reactions in Al- using information as a weapon.” They claim that bania regarding media freedom. However, Alba- Russia invests massively in its propaganda chan- nia under the pressure of the US and EU has tried nels, intelligence services as well as proxies to to reform its justice system in order to strengthen conduct malicious cyber activity to support their fight against organized crime and corruption. So, disinformation efforts, leveraging outlets that fight against organized crime may include media masquerade as news sites or research institutions owners or even politicians. That is why the US to spread these false and misleading narratives. Embassy in Tirana supported publically the The most prominent proxies which the report state’s actions against Ndroqi. Ruling Socialists names are: The Strategic Culture Foundation, work on implementing constitutional reforms Global Research, New Eastern Outlook, News amid political crisis. It should be underlined that Front, South Front, Geopolitica.ru and Katehon – corruption, organized crime (and especially links which is said to be linked to elections in Bosnia. of state’s politics with organized crime), money “KATEHON is a Moscow-based quasi-think-tank laundering and smuggling remain as “open that is a proliferator of virulent anti-Western dis- sores” for the country. Judicial independence and information and propaganda via its website, media freedom are seriously questioned in Alba- which is active in five languages. It is led by indi- nia since it is assessed that both have been tooled viduals with clear links to the Russian state and by the Government. the Russian intelligence services,” the report states. The “think-tank” was established by Kon-

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stantin Malofeyev who is, among other things, the - August 7th, the US will help Bosnia in its justice head of the “pro-Putin monarchist society” the reform and as the senior advisor at Canton Sara- Double-Headed Eagle. The United States sanc- jevo’s Anti-Corruption Office, Erik Larson said tioned Malofeyev as “one of the main sources of “I am not alone in this – I have a team from the financing for Russians promoting separatism in US Embassy in Sarajevo behind me,” which re- Crimea” and bankrolling “separatist activities in cently arrived from Podgorica to help Sarajevo eastern Ukraine,” the report said. The GEC re- Canton fight corruption. Larson said that it is im- called media reports stating that Malofeyev portant to have a Police strategy based on con- served as a proxy for Kremlin priorities in Eu- crete information and that his financial team is rope. “Malofeyev was involved in the purported invested in anti-corruption programs. He noted annexation of Crimea, support for the Russian that “this is not his first rodeo” and that he came military-backed separatist militancy in Donbas, to Sarajevo with a purpose of helping Bosnia. election meddling in Bosnia and Herzegovina, When asked why corruption is a constant problem and media acquisition in Greece, Bulgaria, and in Bosnia, he said there are several reasons for Serbia,” the report states. His “think-tank” this. The first is the chaos from war, then the his- KATEHON promotes these same overarching tory of cross-border smuggling of arms or some goals through its disinformation and propaganda other goods. Another reason is that nationalists activities on its website which is frequently are still in power. This is something Bosnia must sourced by Russian media outlets. The report also finally get rid of 25 years after the war, he said. names Serbia as one of the countries from the He concluded that in order to fight corruption region for is in the focus of many of these proxies. effectively, citizens must also be better connected Namely, proxies such as Geopolitica.ru, News with the media and get to know them better. Lar- Front, South Front and Katehon all publish their son has previously served as the INL Senior Jus- content in the Serbian language, among other lan- tice Advisor at US Embassy Podgorica. Prior to guages. The exception is KATEHON which had arriving in Montenegro in December 2013, he removed the Serbian language section from its was stationed in Pristina, Kosovo as a member of website. All the proxies which the report focused the US Contingent at EULEX working as an In- on also run accounts on all major social media ternational Prosecutor in the SPRK (Special Pros- platforms, running profiles on English and several ecution Office of the Republic of Kosovo). He has other languages, including the Serbian language. been working overseas since 2003. His prior as- The report concluded that these disinformation signments have been in Bosnia, where he served attempts are not unchallenged and that a counter- as an international Prosecutor in both the Special disinformation community comprised of Gov- Department for War Crimes and Special Depart- ernments, civil society, academia, the press, the ment for Organized Crime and Corruption of the private sector, and citizens around the world who State Prosecutor’s Office, as well as with the An- refuse to tolerate these tactics is pushing back. ti-Crime and Corruption Unit of the Office of the (www.ba.n1info.com) High Representative – in charge of overseeing the civilian implementation of the Dayton Peace Agreement which ended the 1992 - 1995 war in

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Bosnia, on behalf of the international community. they come from and their neighbors. Larson also served with the United Nations as the (www.ba.n1info.com) OIOS Chief Resident Investigator for the Demo- cratic Republic of the Congo, and as a UNODC COUNTRY ASSESSMENT : Crime Prevention Expert in Austria. Prior to de- Bosnia’s Decision-making process is a slow, non- ploying overseas, he served as a Captain in the flexible procedure working as an obstacle for the Military Police and is an experienced criminal law country’s progress and growth. Each entity seeks attorney. (www.ba.n1info.com) to serve its own interests ignoring the state’s in- - August 9th, Bakir Izetbegovic, Deputy Speaker terests. Of course this institutional malfunction of Bosnia’s House of Peoples and leader of the affects stability and growth of the country having main Bosniak (Muslim Bosnians) Party of Demo- left Bosnia far behind other Western Balkan coun- cratic Action (Stranka Demokratske Akcije - tries towards the EU. It is not a secret that Bosnia SDA) said he did not believe there would be a faces several political and institutional deadlocks leader among the Serbs who would sign the inde- which slow down its economic performances, pendence of Kosovo but if that happens it might, encourage entities’ rivalries and nationalistic according to him, “increase appetites” for Bosnia rhetoric, and put the country on permanent politi- and Herzegovina. Speaking to local media in Sa- cal instability. Without the pressure of interna- rajevo, Izetbegovic said this might lead to asking tional community (namely the EU and US) and its for compensation for the Serbs and close presence in Bosnia through the OHR admin- Serbia. “There will be lot of fuss and talk, which istration Bosnia could have been dissolved (vio- will eventually calm down and nothing will lently or not). It is not a secret that Republika happen. Because the Serb side and Serb forces Srpska seeks to secede from Bosnia either as an committed crimes and ethnic cleansing both in independent state or as part of Serbia. Of course Kosovo and in Bosnia and Herzegovina, and this such a scenario could destabilize the whole re- side got too much in Bosnia and Herzegovina gion of Western Balkans. Bosnia has become a through the Dayton Peace Agreement (a treaty vital field of rivalry between Russia and the West. that ended the 1992-95 Bosnian war),” the Moscow estimates that Bosnia is a privileged re- Bosniak leader told Radiosarajevo.ba news portal. gion of action to establish influence. Taking into “Anything more than that would lead to new consideration that Southeastern Europe is a re- conflicts and a scenario that nobody needs, gion fully controlled by the Euro-Atlantic forces especially not Bosnian Serbs. Genocide cannot only Bosnia and Serbia still offer “fertile soil” for and will not be rewarded with independence (of Russian meddling in region’s affairs. Muslim Republika Srpska, Bosnia’s Serb-dominated countries such as Turkey, Saudi Arabia, Qatar, region), by no means,” he added. According to and Iran maintain a permanent presence through him, Bosnian Serbs have a complex identity as financial donations and investments. they are fond of Serbia and Belgrade but, he added, they should not dislike Bosnia and BULGARIA: August 5th, “Businesses Herzegovina or Sarajevo, the places are freezing investment projects,” said Tsvetan

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Simeonov, President of the Bulgarian Chamber of tions were the reason for containers to return to Commerce and Industry for the BNR. “Produc- Italy from here,” Dimitrov added. “We cannot tions have already shrunk, and there will be prohibit any EU country from importing, nor can layoffs. The 60/40 measure did not have the best they prohibit us from exporting waste,” the Minis- effect. It turned out that those who are working ter pointed. (www.novinite.com) receive 100% of their salaries while those who - August 9th, Bulgarian Prime Minister Boiko are not working – they too receive 100% of their Borissov, facing more than a month of protests salaries. In the conditions of political instability, demanding the resignation of his Government, businesses are also worried about the implemen- posted on social media that it was “time for a de- tation of the measures of support in the econo- cision.” Public broadcaster Bulgarian National my. What businesses fear are the numerous re- Television said that it understood that Borissov ports of corruption practices in Bulgaria. The had ordered the Police not to intervene to remove companies which have already made investments road blockades erected by anti-government pro- have overcome this corruption barrier, but for testers. Tent camps that for several days were in others it is a source of stress and concern,” place in Bulgaria’s capital city Sofia, as well as in Tsvetan Simeonov said. (www.novinite.com) Plovdiv and Varna, were dismantled by Police in - August 7th, “We do not burn radioactive waste the early hours of August 7th, 2020. In Sofia, pro- in our country.” This was stated during a briefing testers put them back, while in Varna, they also by the Minister of Environment and Water Emil were re-erected, though on the pavement outside Dimitrov. He gave a statement in Burgas on in- the Citizens for European Development of Bul- formation about the import of waste in Varna garia (Grazhdani za Evropeysko Razvitie na from England. “In our country, 50% of our and Balgariya – GERB)-controlled municipal head- 50% of foreign waste can be burned,” he com- quarters, without obstructing traffic. Borissov, in mented. “Do not believe lies that hazardous waste a social media post referring to his grandchildren is being burned here. The air is as dusty as it has and the broader situation in Bulgaria, said “Home been before. We monitor all ships and cargo.” is where they smile. It is always good to talk to a Dimitrov added. He also commented on the palm child, the best decisions come from them. Time for balls that surfaced on some of the beaches in our their smiles and my decisions.” Sunday saw vari- country. “One of the solutions is to stop all ship- ous protest events, including a motorcade to a ping on the Black Sea. Can this happen? I do not border checkpoint and a bicycle procession to believe that anyone can do it,” explained the Min- another border checkpoint. In Sofia, in what was ister. At the briefing it became clear that samples hardly the first such incident, anti-government of oily stains have been taken and they will be protesters threw eggs and tomatoes at the Cabinet examined to determine whether they are harmful building. Current coalition Government that took to human health. “We frighten people unneces- office in 2017 is the third that Borissov has head- sarily. Over the years there has been 1 case of ed as Prime Minister. His first two cabinets left hazardous waste. Measures were taken. Every- office ahead of term as he submitted his resigna- thing is done with notifications. These notifica- tion to Parliament, only, respectively, to return at

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the head of a new Government. Last week, Modernization of Armed Forces is a top priority Borissov said that he was floating the idea with for Bulgaria and huge armament projects are his ultra-nationalist minority partners in the Gov- ongoing (fighter jets, armored vehicles, vessels ernment coalition the idea that he would step etc). However, military operational capability of down as Prime Minister but the Government the state is questioned especially in the Air Force. would serve out its full term, to scheduled parlia- Bulgarian Armed Forces are far from NATO mentary elections in spring 2021. However, the standards. following day, a leader of one of the ultra- nationalist parties said that it had been decided CROATIA: August 4th, Prime Minis- that Borissov would remain in office as Prime ter Andrej Plenkovic said on Tuesday that it was Minister and the coalition Government would of crucial importance that 25 years after Opera- serve out its full term. In any case, Borissov’s tion “Storm” a new message was being sent about mooting of stepping down from Government relations between Croats and the ethnic Serb mi- while leaving his coalition Cabinet in place was nority, between Serbia and Croatia, and about given short shrift by protesters. The more reliable what kind of country Croatians are building. recent polls suggest that, albeit weakened, Commenting on the planned attendance of Deputy Borissov’s GERB party would get the largest Prime Minister Boris Milosevic at the central share of votes in an election, but would face a commemoration of Operation “Storm” in Knin, challenge in forming a coalition with sufficient Plenkovic said that the attendance of a political support in the National Assembly. representative of the Independent Democratic (www.sofiaglobe.com) Serb Party (Samostalna Demokratska Srpska COUNTRY ASSESSMENT : Stranka – SDSS) at the commemoration was an important signal. Minorities are an integral part of Protesters activity continues in Bulgaria but the Croatian society and their representatives are without violence and security incidents. Prime our legal and political legacy of the past 30 years, Minister, Boyko Borissov has ordered Police to Plenkovic said. As for reports that members of the avoid excessive violence against protesters seek- wartime Croatian Defense Force (HOS) were ing to de-escalate tension. Nevertheless, last week planning to attend the commemoration wearing T- Borissov appeared ready to resign (not the Gov- shirts with the inscription For the Homeland ernment) in an effort to satisfy protesters. Ruling Ready, Plenkovic said the Government had been coalition top officials rejected Borissov proposals informed of such plans. “I expect those who are and the Government remains in place while elec- part of the official protocol to wear T-shirts that tions will take place in spring 2021 as it is identify their units that fought in the Homeland planned. One should keep in mind that early elec- War or official T-shirts provided by the War Vet- tion is a possibility. It is assessed that protests are erans Ministry,” he said. Asked if Milosevic’s motivated and coordinated by the opposition participation in the Knin commemoration would while the state’s President, Rumen Radev (backed lead to a policy of better social integration for by the main opposition party, BSP) has a central ethnic Serbs, Plenkovic said that minority repre- role in pushing for the Government’s topple.

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sentatives, including those of the Serb minority, Euros as against 17.3 billion Euros at the end of had been part of the parliamentary majority in the June, a 10% increase from the end of May and a last Parliament and that their participation now 6.7% drop from the end of 2019. Decline in gross had been raised to a higher level. “Based on our international reserves in March, April and May mutual trust we will work, as we did in the last was a direct consequence of the coronavirus pan- term in office, on promoting equality of all citi- demic and the accompanying economic lockdown zens and on making it possible for everyone to and the depreciation of the national currency, live in dignity in line with 21st century standards. Raiffeisenbank (RBA) analysts say, recalling that Specifically, that means electricity and water sup- the HNB had responded with interventions on the ply in isolated communities,” Plenkovic stressed. foreign exchange market to keep the kuna - euro As for War Veterans Minister Tomo Medved’s exchange rate stable. RBA analysts believe that visit to Grubori, where a group of Serb civilians Croatia’s recent entry into the European Ex- were killed in the aftermath of Operation Storm, change Rate Mechanism II will have an additional and to Serb villages without electricity and water positive effect on the exchange rate stability, not- supply, Plenkovic said that it was not a political ing that the Central Bank’s consistent policy of tradeoff. “That is an important political and civi- keeping the exchange rate stable will remain un- lizing gesture by the Government, showing re- questionable. They also believe that gross interna- spect for all victims. We are aware of the faults tional reserves will be sufficient to successfully and crimes that happened in the aftermath of Op- finance possible imbalances in the balance of eration ‘Storm’ and we believe that it is good to payments and conduct a stable monetary policy, pay tribute also to the Serb victims,” he said. that is, keep the exchange rate stable. According Asked how much mutual relations were burdened to HNB projections, gross foreign debt payments by reactions on the Serb side and by the Serbian entirely cover current obligations towards interna- President, Plenkovic said that what his Govern- tional creditors that fall due by the end of the ment was doing was Croatia’s internal matter. year. (www.croatiaweek.com) “We are talking about relations between the Gov- - August 7th, following a crushing defeat at the ernment and our coalition partner, the political recent parliamentary elections, Social Democratic representative of the Serb minority. We make our Party of Croatia (Socijaldemokratska Partija decisions for ourselves, for Croatia, and as I have Hrvatske - SDP) leader Davor Bernardic stepped said, they send out the message that 25 years after down and vowed he would not run for party lead- the war we have achieved all our strategic goals, er at the next intra-party elections. In ten days’ that Croatia is a democratic country, that it has time the deadline to submit candidacies for the its institutions and legal order and that it is inte- upcoming intra-party elections in the SDP begins. grated in the EU and NATO,” Plenkovic said. Currently only Pedja Grbin has announced his (www.hr.n1info.com) intention to run for party President. However, - August 4th, according to the latest data from the Krapina-Zagorje County prefect Zeljko Kolar Croatian National Bank (HNB), gross internation- appears to be considering a run for party leader. al reserves on July 31st amounted to 18.1 billion With the situation in the largest opposition party

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already in chaos, a new issue has come to light. Air Force is far from NATO standards and actu- According to the final report on campaign spend- ally the country lacks an operational air power. ing for the recent parliamentary elections, pub- lished by the State Election Commission, the SDP CYPRUS: August 4th, Cypriot and is in the red by some 2.2 million Kuna. Egyptian priorities on energy issues were reaf- (www.glashrvatske.hrt.hr) firmed during a video conference between Energy COUNTRY ASSESSMENT : Minister Natasa Pilides and her counterpart Tarek El Molla, it was announced on Tuesday. Speaking Croatia enjoys political stability with a strong to CNA, Pilides said that discussion on Monday Government. Main opposition party, SDP is try- was very constructive and focused on issues relat- ing to “stand on its feet” after its disappointing ed to cooperation between the two countries. participation in the last parliamentary elections. Pilides said that among others, issues related to In this context, intra-party elections have been Cyprus’ “Aphrodite” gas field and the acquisition scheduled. Croatia’s main concern is economic of NOBLE ENERGY by CHEVRON were dis- recovery from the COVID-19 pandemic. It should cussed, with the Egyptian Minister expressing the be paid special attention that Croatian top offi- view the development will have positive results in cials (including the Prime Minister, Andrej the region. Pilides expressed the hope that things Plenkovic) vehemently promote reconciliation will go as expected to be able to exploit the “Aph- with the Serbian minority in Croatia. Commemo- rodite” field and the natural wealth of Egypt, ration of operation “Storm” and the “homeland which is also in the plans of the two companies. war” included this year tribute to Serb victims There was also mutual briefing on Cyprus - Egypt too! This is a “brave” move by the Croatian au- intergovernmental agreement for the construction thorities which strengthens coexistence between of a subsea natural gas pipeline which will carry ethnic communities in former Yugoslavia. Of gas from the Aphrodite to Egypt and then to the course, it is emerged that villages inhabited by EU and how the procedures are progressing. The ethnic Serbs in Croatia still do not have water statute for the East Mediterranean Gas Forum was supply and electricity; an unacceptable situation also discussed, with the Cypriot Minister saying for 2020. Croatia – Slovenia border dispute re- both Cyprus and Egypt assure it is a priority, mains active, but COVID-19 pandemic have which both countries view positively. downsized current situation. Croatia seeks to (www.cyprus-mail.com) maintain its influence in neighboring Bosnia - August 5th, talks between Cyprus and Israel are through the Croatian entity in that country. Croa- on the right track as regards Israel’s “Yishai” gas tia implements a policy of Armed Forces’ mod- field which is adjacent to Cyprus’ “Aphrodite” ernization trying to form a reliable and well field, Energy Minister Natasa Pilides said on equipped force according to NATO standards. Wednesday after her first video conference with However, the current COVID-19 pandemic may her Israeli counterpart Yuval Steinitz. Pilides told affect the ambitious modernization plans due the the Cyprus News Agency that a special agreement economic repercussions in the country. Croatian is being discussed that exclusively concerns the

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“Aphrodite” gas field and not block 12 in general reserves of the eastern Mediterranean with Eu- to which the field belongs. Next week, she said, rope. (www.cyprus-mail.com) there will be a discussion between the Permanent - August 9th, Finance Minister Constantinos Secretaries of the two Ministries, adding that talks Petrides leaves for Russia on Sunday as Head of on the issue “are going quite well.” She added the Cyprus negotiating team to discuss Moscow’s that following the submission of Cyprus’ detailed plans to scrap a deal that avoids double taxation in proposals and the relevant agreements Nicosia the two countries. Talks between the two sides are signed last November with the energy companies planned for Monday and Tuesday in Moscow. interested in developing the reservoir, Israel has Russia’s Finance Ministry said Monday it would started to examine the issue and expressed interest initiate a process to scrap an agreement with Cy- in resolving it soon. The Cypriot Government prus aimed at avoiding double taxation – after granted the NOBLE ENERGY, SHELL, AND talks to modify the deal apparently failed – and DELEK consortium an exploitation license for the that. The Russian Finance Ministry has said legal “Aphrodite” gas field. The companies intended to changes will make it more profitable for people to pipe the gas to neighboring Egypt. NOBLE EN- transfer money back to Russia. It said is began the ERGY has since been bought out by CHEVRON. procedure to scrap the agreement after the Cyprus But Israel claims a share of the production of Government had refused face-to-face negotiations “Aphrodite” as a small portion of the reservoir to update it. “Restructuring one’s holding struc- stretches into the “Yishai” field. Despite negotia- tures through Cyprus will of course become dis- tions in the last few years, the two countries have advantageous. It will be more advantageous to not reached an agreement. Pilides did not rule out transfer everything back to Russia,” Russia’s a meeting in Israel on the issue next September, Deputy Finance Minister Alexei Sazanov said. In during which the two countries will also discuss April Russia had notified Cyprus of changes to the “EuroAsia Interconnector” project. The pro- the tax agreement, which will come into force on ject concerns connecting the national electricity January 1st, 2021. A senior source at the Cyprus grids of Israel, Cyprus and Greece aimed at end- Finance Ministry denied the Government had ing Cyprus’ energy isolation and promote the refused to negotiate, describing the Russian substantial development of renewable energy claims as “a little provocative” and not an “accu- sources (RES). The two Ministers also discussed rate reflection of reality.” “We never refused to the latest approvals by the Parliaments of Greece, negotiate, we initiated negotiations, made numer- Cyprus and Israel of the transnational agreement ous proposals that were rejected and were not for the “East Med” gas pipeline. “We are now officially notified about Russia’s plans to de- ready to move on to the next stage, with the estab- nounce the treaty,” the source said. The Finance lishment of a working group that will discuss is- Ministry source said that Russia had requested a sues related to the project,” Pilides said. Cyprus meeting for August 6th and the Cyprus Govern- Parliament ratified last month the agreement ment asked that this be put back to the third week signed last January between the three countries on of August for practical reasons. Rather than dis- the “East Med” pipeline aimed to connect the gas cuss a mutually-acceptable date for the negotia-

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tions, the Russian Foreign Ministry, came out COUNTRY ASSESSMENT : with Monday’s statement, claiming Nicosia had refused to negotiate. Conditions put forward by Cyprus continues to strengthen its bilateral rela- the Cypriot side during the negotiations were a set tions with several countries of the region aiming of exceptions that were “too wide” according to to get support for the Turkish illegal activities in several sources on the Russian side, said the Rus- Cypriot Exclusive Economic Zone. In this context, sian Finance Ministry. “To fulfill the instructions the Cyprus – France cooperation is of significant of the President of the Russian Federation on importance since the latter has shown its willing- taxation of income in the form of dividends and ness to play an active, leading role in the Eastern interest paid from the territory of the Russian Mediterranean affairs. Moreover, the Saudi Min- Federation to the Republic of Cyprus at a rate of ister of Foreign Affairs visited Cyprus expressing 15%, the Ministry of finance territory of the Rus- his support to Cypriot sovereign rights. It is al- sian Federation to the Republic of Cyprus at a ready known that Saudi Arabia and Turkey are rate of 15%, the Ministry of Finance of Russia on engaged in a harsh rivalry for power in Middle August 3rd of this year begins the procedure for East. In other words, Cyprus follows a “clever” the denunciation of the agreement,” the Russian external policy by strengthening its relations with Ministry announcement said. Earlier this year, countries which their interests coincide the Cyp- th Russian President Vladimir Putin said all interest riot ones. Turkish NAVTEX (from July 28 to th and dividend payments that leave Russia should September 20 , 2020) continues to violate Cypri- be subject to 15% tax, up from the current level of ot EEZ maintaining tension in the region. Cyprus 2%, to combat capital outflows. The matter was lacks aeronautical assets to deter Turkey from its discussed in a 45-minute telephone call between illegal activities. It seeks to balance its military President Nikos Anastasiades and President Vla- weakness through “external counterbalance” dimir Putin last month. The Russian move would through alliances and strategic cooperation with see a severe loss of tax revenue for the Cyprus other countries. It is certain that Turkey will not Government. “There is still hope that Cyprus can accept “fait accompli” in a region considered as gain some of its objectives at the negotiating table part of its strategic interests. Cyprus appeared – it does seem, however, that the Russians want active last week regarding energy issues. The new some kind of quid pro quo for agreeing to Cypriot Energy Minister, Natasa Pilides had talks with requests,” commented Director and Head of tax at her Israeli and Egyptian counterparts seeking to the Limassol-based Primus Spyros Ioannou. boost energy plans in Eastern Mediterranean. “What I am concerned about is stability. With this East Med gas pipeline, EuroAsia interconnector, kind of change underway, it is more difficult for buying of NOBLE ENERGY by CHEVRON etc. businesses to come to Cyprus, to bring money were among topics discussed by the Ministers. here, to establish businesses here. A stable fiscal Cyprus seeks to become an energy hub strength- environment has been one of the selling points for ening not only its energy independence but also Cyprus – let us hope this will not change,” he its security. On the other hand, Cypriot energy added. (www.cyprus-mail.com) plans are the source of tension with Turkey which rejects the idea of being isolated from the Eastern

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Mediterranean energy resources. Cypriot - Rus- ernment’s social security overhaul, while New sian dispute on double taxation policy is a major Democracy MP Zoi Rapti was named Deputy to problem for Cyprus which may affect Cypriot the Health Ministry, in charge of mental health. investment environment of the country. Russian New Democracy (Νέα Δημοκρατία – ND) MP harsh stance on the issue may be related to the Nikolaos Tagaras, meanwhile, was put in charge development of closer relations between Cyprus of environmental protection. Changes and the US and the latter’s task to isolate Russia were described by Petsas as “adjustments to im- from Cyprus. Turkey maintains a significant mili- prove an already successful cabinet” as ND re- tary force on the island (Army Corps size) which mains far ahead in the polls and the Government poses a permanent threat against the Cypriot reis seen as having been broadly successful in most public. As long as part of Cyprus remains under areas since coming to power last year. Mitsotakis Turkish occupation and Turkish troops (equipped might consider a more comprehensive reshuffle with heavy weapons) are deployed in the island, later this year, when his administration is likely to Cyprus faces an existing direct threat against its face bigger challenges, Kathimerini understands. national security and sovereignty. (www.ekathimerini.com)

- August 6th, Egypt and Greece signed an agree- th GREECE: August 5 , Prime Minister ment on Thursday designating an Exclusive Eco- Kyriakos Mitsotakis conducted a mini-reshuffle nomic Zone in the eastern Mediterranean between of his cabinet on Tuesday, carrying out “correc- the two countries, an area containing promising tive moves” rather than sweeping changes as he oil and gas reserves, Egyptian Foreign Minister had indicated in June, while also underscoring his Sameh Shoukry said. Shoukry made the an- administration’s key priorities, notably the most nouncement at a joint press conference with his efficient possible use of billions of Euros from the Greek counterpart Nikos Dendias in Cairo. “This EU’s coronavirus recovery fund. Announcing the agreement allows both countries to move forward changes, Government Spokesman Stelios Petsas in maximizing utilization of the resources availa- said they were aimed at boosting the Govern- ble in the Exclusive Economic Zone, especially ment’s “operational efficiency” while also im- promising oil and gas reserves,” Shoukry said. proving its efforts to bolster Greece’s economy “The agreement with Egypt is within the frame- and reform the social security system as well work of international law, respects all concepts of as responding to the challenges of climate international law and the law of the sea and good change. With these priorities in mind, Theodoros neighborly relations, and contributes to security Skylakakis was promoted from Deputy Finance and stability in the region,” Dendias said. Egypt Minister to Alternate Minister for Fiscal Policy and Greece are at odds with Turkey, which last and Nikos Papathanasis was also upgraded to year angered the two countries by signing a mari- Alternate Minister from Deputy, in charge of in- time delimitation agreement with the internation- vestments and private-public partnerships. Athens ally recognized Libyan Government, in a move University Professor Panos Tsakloglou was ap- that escalated disputes over potential offshore gas pointed to the Labor Ministry to oversee the Gov- reserves in the eastern Mediterranean. Egypt and

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Greece condemned the deal as “illegal” and a security in the region.” The Ministry said Mon- violation of international law. Tensions were al- day’s Navtex “combined with the observed broad ready high between Greece and Turkey because mobilization of units of the Turkish Navy, consti- of Turkish gas exploration in the eastern Mediter- tutes a new serious escalation.” Turkey is acting ranean off the coast of Cyprus. The NATO mem- in a way that is destabilizing and threatening bers are also at odds over mineral rights in the peace, it added. Turkish Energy and Natural Re- Aegean Sea. Earlier this month, Egypt said that sources Minister Fatih Donmez said the ORUC part of a seismic survey planned by Turkey in the REIS had arrived in its area of operation from its eastern Mediterranean potentially encroached on anchorage off Turkey’s southern coast. He wrote waters where Cairo claims exclusive rights. In on social media that “83 million back the ORUC June, Greece and Italy signed an agreement on REIS,” referring to Turkey’s population. Greek maritime boundaries, establishing an Exclusive Minister of State Giorgos Gerapetritis said the Economic Zone between the two countries and ORUC REIS was not transmitting through the resolving longstanding issues over fishing rights automatic identification system carried by ships, in the Ionian Sea. (www.ekathimerini.com) but was being monitored by the Greek Navy. “We are at full political and operational readiness,” - August 10th, the Government of Greece Gerapetritis said on state television ERT. “The slammed Turkey’s announcement that it will be majority of the fleet is ready at this moment to go conducting energy exploration in an area of the out wherever is needed,” he said when asked to Eastern Mediterranean that Athens says overlaps elaborate. “Our ships that are sailing in crucial its continental shelf, as tension over the rights to areas were already in place days ago. If neces- natural resources increased sharply in the region sary, there will be a greater development of the Monday. Officials said the Greek military was on fleet,” the Minister said. Gerapetritis said that “it alert, while Prime Minister Kyriakos Mitsotakis is clear that we are not seeking any tension in the convened the Government’s national security region. On the other hand, our determination is a council after Turkey issued a Navtex on Monday given.” Greece on Monday issued its own Navtex announcing its research vessel ORUC REIS and saying the Turkish Navtex had been issued by an two auxiliary vessels would be conducting seis- “unauthorized station” and referring to “unau- mic exploration in an area between Greece and thorized and illegal activity in an area that over- Cyprus until August 23rd, 2020. Last week, Tur- laps the Greek continental shelf.” Turkey retorted key also announced it would be conducting a fir- with another maritime message saying the seismic ing exercise in the eastern Mediterranean Monday survey was being conducted on Turkey’s conti- and Tuesday in a nearby area, southwest of the nental shelf. A crucial issue of the dispute is Turkish coast between Turkey and the Greek is- whether islands should be included in calculating land of Rhodes. “Greece will not accept any a country’s continental shelf and maritime zones blackmail. It will defend its sovereignty and sov- of economic interest. Turkey argues they should ereign rights,” Greece’s Foreign Ministry said in not be, a position Greece says violates interna- a statement. “We call on Turkey to immediately tional law. Greece has thousands of islands and end its illegal actions that undermine peace and islets in the Aegean and Ionian seas, around 200

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of them inhabited. Ankara got fired up again last Agreement between Egypt and Greece secures week over a deal Greece and Egypt signed Thurs- Greek interests in Eastern Mediterranean and day delineating maritime boundaries and the confirms a commitment of the Greek Government countries’ Exclusive Economic Zones for drilling to delimit maritime zones with its neighboring rights. (www.ekathimerini.com) countries. It has started with Italy and continues with Egypt. Under current situation in Eastern COUNTRY ASSESSMENT : Mediterranean and Aegean Sea, Greece is forced to strengthen and modernize its Armed Forces Relations between Greece and Turkey are evolv- operational capability. In the meantime, Greek ing stormily. After a week of de-escalation, ten- Prime Minister, Kyriakos Mitsotakis proceeded in sion came back to the Aegean and Eastern Medi- a short reshuffle of his Government seeking to terranean Sea due to a new NAVTEX issued by refresh it. Turkey for hydrocarbon research within the Greek continental shelf and Exclusive Economic th Zones. The research vessel ORUC REIS has KOSOVO: August 6 , the largest sailed from the Antalya port escorted by Turkish opposition party in Kosovo, Self-Determination Navy ships raising tension in high levels. Greek (Vetëvendosje) has started collecting signatures Armed Forces are increasing levels of operation- for filing a motion for a no-confidence vote into al readiness while the Navy fleet is deploying in the Government led by Avdulah Hoti, N1 report- the Area of Responsibility (AoR). Greek political ed on Thursday. Vetëvendosje has 30 MPs and and military leadership appears committed to needs the support of ten more Deputies to get the reply adequately in any Turkish provocation vio- vote on the agenda of the 120-seat-strong Parlia- lating the country’s sovereign rights. Turkish re- ment. The party said Hoti’s cabinet was not legit- action was almost expected due to the announce- imate and not capable of running Kosovo. The ment of the Greek – Egyptian agreement on de- remaining ten signatories might be found among limitation of maritime zones. A substantial suc- the MPs of Hoti’s main coalition party, Alliance cess of the Greek foreign policy which actually for the Future of Kosovo (Aleanca për cancels the Libyan – Turkish memorandum on Ardhmërinë e Kosovës - AAK), led by former maritime zones. The EU and US expressed their Premier Ramush Haradinaj. He said they were annoyance on the new Turkish actions and have unhappy with the Government, mainly because it called Turkey to abstain from further provocative resumed the Belgrade – Pristina dialogue on the activity. Under these circumstances it is likely an normalization of relations. Haradinaj warned his accident or provocative action which could turn party would not support Hoti if he continued dia- into a “hot” incident or armed conflict. Turkish logue without consulting with the coalition part- actions focus on the region around the island of ners. Hoti, leader of the Democratic League of Kastelorizo which is strongly disputed by Turkey. Kosovo (Lidhja Demokratike e Kosovës - LDK), Next days would be crucial for further escalation. who is currently in self-isolation after tested posi- Of course, potential dialogue between Greece and tive on coronavirus, became Prime Minister on Turkey is canceled due to current tense situation. June 3rd, 2020. The previous cabinet led by Albin

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Kurti of the Vetëvendosje which won the general The Draft Law on the Protection of Kosovo Lib- elections last October was voted out on March eration Army’s War Values, however, contains 25th, 2020 after Kurti dismissed an LDK Minister, provisions which raise serious concerns as re- turning the coalition partner against him. gards the right of people to have their opinion,” (www.rs.n1info.com) the EU’s social media post said. Earlier, the US Ambassador to Kosovo Phillip Kosnett said that if - August 7th, Pristina’s coordinator for the Kosovo the draft were adopted, “it would weaken Koso- dialogue Skender Hyseni said on Friday that Bel- vo’s democracy.” “KLA fought to widen freedoms grade and Pristina should reach an agreement of Kosovo people, not to limit them,” he said. within the next 12 months or see the reconcilia- (www.rs.n1info.com) tion process fail. “We expect an agreement which will include mutual recognition within 12 months COUNTRY ASSESSMENT : or the process will fail. Everything we see at international level shows that this is a moment that As Kosovo is getting closer to talks with Serbia, it Kosovo and Serbia must grab to make progress. seeks to get the US support as much as it can. The Any delay means failure. I do not know if Serbia only Pristina goal is mutual recognition with Ser- understands that but if it intends to join the Euro- bia. There is no other compromise for Kosovo pean Union it should,” Hyseni told the Klan such as technical agreements. However, negotia- Kosova TV station. Hyseni insisted on intensive tions will not be easy since Serbia has its own talks in coordination with the EU, US and France agenda. The US and EU involvement will be cru- and added that he would never agree to allow cial for the talks’ outcome. Kosovo coordinator dialogue process to drag on and boil down to on dialogue with Serbia, Skender Hyseni put an- technical issues. “The main issue has to be debat- other limit on the process by announcing that an ed – normal relations between Kosovo and Serbia agreement could be reached within 12 months; which cannot happen without mutual recogni- then negotiation is failed. It sounds like ultimatum tion,” he said. Hyseni said that he was satisfied but it is assessed that Hyseni seeks to put more with his visit to Washington a week ago because pressure on Serbia and international stakehold- the US administration, including the President’s ers. Political situation in Pristina is not so stable Special Envoy Ambassador Richard Grenell is since ruling coalition enjoys fragile power in Par- completely committed to the Belgrade - Pristina liament. Opposition Vetëvendosje is collecting dialogue. (www.rs.n1info.com) signature to file a motion of no-confidence against the Government but it is estimated that th - August 7 , the EU’s Office in Pristina said that ruling coalition will maintain its majority within some stipulations in the draft Law on Protecting the Parliament. With Belgrade – Pristina dia- Kosovo Liberation Army (KLA) Values were not logue process ongoing, a potential political insta- in line with freedom of speech. “Modern democ- bility could be detrimental for Kosovo interests. racies rely on critical scrutiny and informed de- Fight against corruption, organized crime, money bates to discuss and interpret historical events laundering, smuggling, trafficking, establishment and achieve progress. The Kosovo Liberation of rule of law, accountable and transparent state Army is an integral part of the History of Kosovo.

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institutions, and functional public administration ties agreed to hold in October this year in Chis- are the main challenges for Kosovo towards its inau a regular meeting of the Moldovan - Russian European path. intergovernmental commission on trade and economic cooperation, at which it is planned to sign a number of important bilateral agreements. MOLDOVA: August 4th, the grant (www.regtrends.com) worth ten million Euros – a component part of the second installment of the EU’s macro-financial - August 7th, the parliamentary group of the Dig- assistance program, today entered the Finance nity and Truth Platform Party (Partidul Platforma Ministry’s account. The disbursement of the fi- Demnitate și Adevăr - PPDA) intends to launch nancial means related to the second installment of the procedure for urgently calling an extraordi- the macro-financial assistance program was pos- nary sitting of Parliament. Thirty-four signatures sible due to the fact that Moldova fully carried out of MPs need to be collected for the purpose, said the actions provided for in the memorandum of Deputy Speaker Alexandru Slusari, PPDA Vice understanding on macro-financial assistance. President, who noted that the sitting will be con- “They include important measures in the field of vened to discuss the disastrous situation in agri- governance of the financial sector, public area, culture and to consider solutions, IPN reports. fighting corruption and money laundering, energy Slusari told a news conference that the PPDA sector and business climate, as well as the imple- proposes including the questioning of the Prime mentation of the Deep and Comprehensive Free Minister and Minister of Agriculture in the agen- Trade Area,” the Finance Ministry said. The loan, da of the Parliament’s extraordinary sitting so as worth 20 million Euros, of the second installment to consider the necessity of declaring a state of of the EU’s macro-financial assistance program agricultural emergency in a number of districts of for Moldova, reached the Finance Ministry’s ac- Moldova in connection with the natural disasters th count on July 16 , 2020. The second installment and to ask for assistance from the foreign part- of the macro-financial assistance program is made ners. The PPDA MPs also suggest examining up of 10 million Euros as grant and 20 million amendments to the Law on the Chamber of Trade Euros as long-term loan, with low interest. and Industry so as to unlock the issuing of force (www.moldpres.md) majeure certificates, and considering the possibility of introducing a tax holiday for some catego- - August 6th, in the near future, Russia will con- ries of enterprises, including for all the farmers sider the possibility to provide Moldova with sev- affected by the disasters. Under the Parliament’s eral tens of thousands tons of humanitarian aid Regulations, if the legislative body is not in an diesel fuel meant for agricultural producers. Pres- ordinary session, it can come together for an ex- ident Igor Dodon agreed upon in Moscow during traordinary or special sitting at the request of the the meeting with Dmitry Kozak, Deputy Head of President, Parliament Speaker or 1/3 of the MPs. the Presidential Administration, Special Repre- (www.ipn.md) sentative of the President of Russia for the Devel- opment of Trade and Economic Relations with the COUNTRY ASSESSMENT : Republic of Moldova, ipn.md reported. The par-

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Moldovan Government enjoys relative stability. Partija Crne Gore - SNP), Workers’ Par- Political parties are preparing their candidates ty (Radnička Partija - RP), True Montene- for the presidential elections, scheduled for No- gro (Prava Crna Gora - PCG) and United Monte- vember 1st, 2020. Economic situation of the coun- negro (Ujedinjena Crna Gora – UCG), might win try is almost dramatic and recovery cannot start at least 26 seats on the elections on August 30th, without external financial support. Agreement 2020 which would be enough to overthrow the with IMF is a significant aid, while the EU has decade-long ruling of Milo Djukanovic if they started to release funds for helping the suffering unite with the coalition of the Democrats and the economy. It should be highlighted that Moldova Civic Movement United Reform Ac- needs desperately reforms in order to establish a tion (Građanski Pokret Ujedinjena Reformska sustainable economy and functional state. Inade- Akcija – URA) after the elections, said the leader quate and dysfunctional institutions, corrupted of the newly-established coalition, Zdravko state officials and public servants, absence of rule Krivokpaic. Speaking in a TV show Krivokapic of law, money laundering, organized crime, said that the great people’s coalition would try to smuggling, controlled justice and poor economic change Montenegro and return it to its traditional performances are the main challenges of Moldova and universal values. “Right now, there is no final affecting good governance and economic growth. agreement. I believe in our coalition with the Moldova has become a field of the ongoing rival- Democrats and URA Civic Movement. That would ry for influence between the West (namely the EU be a win-win situation. We are ready to make all and NATO) and Russia. The country is considered exceptions just to change the Government in Mon- by the US and EU of great strategic importance tenegro,” he said. On possible irregularities in the being in the soft underbelly of Russia. On the oth- elections, Krivokapic said that their coalition is er hand, Moldova is considered by Russia as an ready to do its job responsibly in all polling sta- important region for its national security belong- tions across Montenegro. He further emphasized ing by principle to its sphere of influence. Russia that people are not afraid of the regime, and that maintains troops in Transnistria which are con- religious processions and the Serbian Orthodox sidered by pro-western forces as violating Moldo- Church liberated every man in Montenegro. “Re- van sovereignty. The frozen conflict of ligious processions liberated people of Montene- Transnistria is always a “running sore” for the gro. We were walking quietly and with dignity, country working as a potential factor of destabili- but one could hear our voice telling ‘We will not zation. allow anybody to take our shrines’ and ‘You cannot do this anymore’.” Beside leaders of the DF, Milan Knezevic and Nebojsa Medojevic, MONTENEGRO: August 4th, ac- candidates on the electoral list are Slaven cording to latest research of the public opinion, Radunovic, Predrag Bulatovic, and Strahinja the great people’s coalition “For the Future of Bulajic. (www.cdm.me) Montenegro” comprising of the Democratic Front (Demokratski Front - DF), Socialist Peo- - August 5th, President of Montenegro, Milo ple's Party of Montenegro (Socijalistička Narodna Djukanovic, welcomed today the newly-appointed

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Ambassador of Montenegro to Russia, Milorad ed to reveal their strategies and potential cooper- Scepanovic. It was agreed that Montenegro is ation with other co-running parties. Pro- willing to commit to normalizing and strengthen- Serbian/Russian DF has achieved to establish a ing relations between the countries, with the aim coalition with 4 other parties posing a significant of overcoming the present situation and modern- “threat” to the ruling DPS. Of course coalition izing bilateral relations. (www.cdm.me) “For the future of Montenegro” cannot get parliamentary majority by itself and should be pre- - August 9th, President of the European Parlia- pared for cooperation with other opposition forc- ment, David Sassoli, answered to the President of es. Possibility of pro-Russian/Serbian parties Montenegro’s Parliament, Ivan Brajovic that EP coming to power is a major concern of Western missions abroad were banned due to coronaviurs allies of Montenegro. There are several warnings situation and that included observation missions that foreign stakeholders namely Serbia and Rus- for elections. Brajovic’s Cabinet reported in July sia will try to interfere in the Montenegrin elec- that “Democracy Support and Election Coordina- tions aiming to promote pro-Serbian/Russian par- tion Group of EP stated at the meeting held last ties. In this context, NATO has deployed several month that observation of elections in Montene- months ago hybrid warfare experts aiming to gro is priority.” Parliament said to Pobjeda yes- tackle attacks of such form. In sum, although terday that there had been no any further commu- Montenegro is a NATO member and is very close nication between Brajovic and Sassoli. Arrival of to the EU accession, there is concern that Russia the Mission will be considered in the forthcoming still works on establishing influence in the coun- period, on the basis of the epidemic situation. “Be try. The state maintains high levels of corruption, sure that EP stands shoulder to shoulder with organized crime, smuggling, money laundering, Montenegro when it comes to facing present chal- poor public administration transparency and ac- lenges,” Sassoli’s letters said. Parliament of Mon- countability, corrupted politicians, absence of tenegro reminds that Parliamentary Assembly of rule of law and problematic justice function. the Council of Europe has formed delegation con- Montenegro – Serbia relations remain tense un- sisting of 22 members in charge of monitoring dermining good neighboring between the two elections in Montenegro. Head of the Office for countries and endangering stability of the region. Democratic institutions and human rights, Tomas Mesaric, said last week that observation mission of OSCE will provide impartial observation of NORTH MACEDONIA: August th election process in Montenegro and called on the 7 , the French Ambassador in Skopje, Christian voters to adhere to all measures imposed to curb Thimonier, told “Koha” daily that he expects the the spread of coronavirus. He said that the main new Government to be formed soon and to con- focus was on public health. (www.cdm.me) tinue consolidating the reforms towards the Euro- pean path of the country. “I hope that the new COUNTRY ASSESSMENT : Government will be formed soon, and to continue with efficient and credible reforms, as well as to The election day is getting closer and closer (Au- consolidate the country’s European path. Judici- gust 30th, 2020) while political parties have start-

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ary, fight against corruption, education reforms said that they agreed on setting up working and economic development should be the main groups headed by two parties’ secretaries tasked task of the new Government,” Thimonier said. to agree on the details. After Parliament was con- Asked whether France or the EU favors a party stituted on August 4th, 2020 following July 15th that should form a new parliamentary majority, early parliamentary election, parliamentary major- Thimonier said political action was open in a ity needs to be secured within 10 days. When the democratic system, but that a new majority should deadline expires, the President will then be be created based on the program presented at the obliged to give the mandate for forming a Gov- elections. (www.republika.mk) ernment. The Prime Minister-designate within 20 days after being handed over the mandate submits - August 9th, due to the fact that the deadline for a program and propose new Government Minis- securing parliamentary majority and forming a ters and officials. (www.republika.mk) new Government expires, parties have intensified negotiations. However, they are keeping details of - August 9th, Social Democratic Union of Mace- talks secret. Social Democratic Union of Macedo- donia (Socijaldemokratski Sojuz na Makedonija – nia (Socijaldemokratski Sojuz na Makedonija – SDSM) continues negotiations to form stable par- SDSM) reiterated in a press release on Saturday liamentary majority and a Government with a that they are holding formal talks over forming a four-year term. The party is committed to the Government with a 4-year term, set to cleanse prosperity and long-term stability of Norh Mace- judiciary and inspect the origin of office holders’ donia, SDSM said in a press release Sunday. finances and assets. The new Government, they There is no integration alternative, the press re- added, will focus on fighting against crime and lease read, to EU and NATO membership. “Dur- corruption on all levels. In response, Spokesper- ing talks with DUI, both parties agreed to respect son Dimce Arsovski told a press conference on the Prespa Agreement, the Friendship Treaty and Saturday that the Internal Macedonian Revolu- the Ohrid Framework Agreement. We are com- tionary Organization – Democratic Party for mitted to securing social cohesion and rule of law Macedonian National Unity (Внатрешна and condemn all forms of nationalism and hatred. македонска револуционерна организација – We have agreed that the potential joint Govern- Демократска партија за македонско ment program must be in line with the Constitu- национално единство - VMRO-DPMNE) is also tion, legislation, as well as SDSM and DUI’s in communication with political parties to secure election programs,” the press release added. parliamentary majority. Relations between SDSM said that both sides have proposed respon- VMRO-DPMNE and other parties, he added, are sible potential office-holders, who will deliver the friendly. SDSM party has invited the Democratic program promises and possible coalition princi- Party of Albanians (Demokratska Partija na ples. “Both parties are in favor of cleansing judi- Albancite – DPA) to join in coalition Govern- ciary and inspecting the origin of office holders’ ment, the latter party said after Parliament was finances and assets through an agreed upon sys- constituted earlier this week. DPA has accepted in tem,” the press release noted, stressing that talks principle SDSM’s invitation. However, the party to form stable parliamentary majority and a new

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and responsible Government continue. “is not a whim, it is a necessity.” In a social media (www.republika.mk) post, he said Romanians must know that there is money to double the allowances. “PSD will not COUNTRY ASSESSMENT : budge an inch. We will continue to put pressure on this failed Government so that the laws voted Deadline for the President, Stevo Pendarovski to by Parliament and promulgated by President give the mandate for the new Government expires Iohannis are enacted. And the National Liberal and political parties intensify their efforts to se- Party (PNL) and their cynical Government must cure parliamentary majority. SDSM and DUI (46 understand that doubling the allowances is not a and 15 seats respectively) agreed in principle for whim, but a necessity. Increasing the allowances forming a coalition but they did not achieve to by 20% is no doubling. Romanians must know officially confirm their agreement. It is assessed that there is money, but only for the thefts of this that it is a matter of time to announce their Government of thieves and incompetents!” agreement and to form the new Government. It is Ciolacu’s post reads. (www.nineoclock.ro) still under question the issue of the Prime Minis- ter office since DUI insists publically on an Alba- - August 3rd, National Liberal Party (Partidul nian premier. SDSM and DUI hold talks with Național Liberal - PNL) leader and Romanian secret content to reach a final agreement. An eth- Prime Minister Ludovic Orban said on Monday nic Albanian premier would be a historic success that the Social Democratic Party (Partidul Social of the North Macedonia Albanian community. An Democrat - PSD) is “the party with the least legit- historic success well coordinated by Albania and imacy to submit a censure motion at the moment,” its Prime Minister, Edi Rama who strongly influ- claiming that this is a “politicizing,” “electoral” ences ethnic Albanian politics in North Macedo- gesture and has no solid motivation behind it. nia. Besides, the “all Albanian political platform” “Romania, like many other European countries, which is promoted by DUI is under the Albanian like many other countries in the world, is facing Government and Rama auspices. The new Gov- an epidemiological crisis, a pandemic. It also ernment should focus on reforms regarding jus- faces a related economic crisis. In addition, in tice, rule of law, fight against corruption and Romania we had drought, we had floods. The money laundering, public administration, and message I am sending is that it takes a Govern- respect of human rights in order to accelerate its ment vested with all its powers, which has the European integration process. capacity to counter and find solutions to the serious problems that are caused by the crises that have overlapped. To come and file a censure mo- ROMANIA: August 3rd, Social tion at the moment against a Government that has Democratic Party (Partidul Social Democrat - done its duty seems to me a political gesture that PSD) acting leader Marcel Ciolacu said on Mon- has no solid motivation behind it and the gesture day that PSD will continue to put pressure on the is simply electoral before the local elections to Government to implement laws passed by Parlia- probably show the militants that the PSD is doing ment and promulgated by President Klaus something. I believe that the party that has the Iohannis, noting that doubling child allowances

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least legitimacy to submit a censure motion at the Basescu and Calin Popescu Tariceanu are likely moment is the PSD. At the moment I consider this to make the election result more unpredictable as inopportune and against the interest that Roma- both will likely “steal” votes from Firea and Dan. nia and every single Romanian have for there to Traian Basescu’s People's Movement Par- be a responsible Government to deal effectively ty (Partidul Mișcarea Populară - PMP) wanted to with solving the crisis,” Orban said at the PNL join the alliance of center-right parties that sup- headquarters. He added that, after the motion is port Nicusor Dan, but USR and PLUS opposed tabled, the PNL will discuss with all parliamen- this. Thus, Basescu said he would run to help his tary formations, with each parliamentarian indi- party, the goal being mainly to help PMP candi- vidually to explain that dismissal of the Govern- dates to get into the Bucharest General Council ment would “hurt Romania.” The PSD’s Acting and the district councils. (www.romania- Chairman, Marcel Ciolacu, announced last Thurs- insider.com) day that the Social Democrats had decided to file a censure motion against the Orban Government COUNTRY ASSESSMENT : this August. (www.nineoclock.ro) Political instability and uncertainty continue in

- August 24th, race for the Mayor seat in Roma- Romania with opposition seeking to topple the nia’s capital Bucharest could turn out to be the Government. Romanian cabinet is a minority one tightest in the last 30 years as former President enjoying fragile support in Parliament so far but Traian Basescu and former Prime Minister Calin it can lose confidence at any time. It is very likely Popescu Tariceanu have both announced their parliamentary elections to be held on December th candidacies. They will run against incumbent 6th, 2020. Local elections on September 27 , Mayor Gabriela Firea, supported by the Social 2020 would be a good stress test for Romanian Democratic Party (Partidul Social Democrat - political parties before the parliamentary elec- PSD), and activist Nicusor Dan, supported by the tions. In this context, a couple of imminent politi- ruling National Liberal Party (Partidul Național cal personalities will run for the Bucharest Liberal - PNL) and by the alliance of progressive Mayor’s office seeking to strengthen power of parties Save Romania Union (Uniunea Salvați their parties before the parliamentary elections. România - USR) and Party of Liberty, Unity and Romania enjoys advanced upgrade in US and Solidarity (Partidul Libertății, Unității și NATO strategic plans due to its geographical Solidarității - PLUS). Former Prime Minister Vic- position located close to Russia and its access to tor Ponta and his PRO Romania (PRO România - the Black Sea. NATO military force in Europe is PRO) also have a candidate for Bucharest Mayor, gradually shifting from central Europe (Germany) a General who managed the Military Hospital in to the east. Romania keeps strengthening its Bucharest in the past. Incumbent Mayor Gabriela Armed Forces seeking to achieve NATO stand- Firea and Nicusor Dan, who was the runner-up in ards. the 2016 local elections, are the clear favorites for running the Bucharest City Hall in the next four SERBIA: August 3rd, members of the years. However, the candidacies of Traian opposition Alliance for Serbia (Savez za Srbiju -

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SzS) and other parties and movements which Belgrade - Beijing relations and added that the boycotted country’s general elections on June sale would take the Chinese military industry into 21st, 2020 agreed on Monday to act together in a a new market. Serbia is also the first European new organization the United Opposition of Serbia country to acquire Chinese-made combat drones. (UOS). “Because of the dramatic political situa- (www.rs.n1info.com) tion, and the need for a broader front of acting, - August 7th, Serbian President Aleksandar Vucic the United Opposition of Serbia will accept all said on Friday that he will demand a discussion of parties and movements ready to fight for the re- what he said are fundamental issues when the spect of the Constitution and the rule of law, and Belgrade - Pristina dialogue continues in Brussels against the authoritarian regime based on the will on September 7th, 2020. “I will demand the im- of one man (President Aleksandar Vucic),” an plementation of the 2013 agreement signed under SzS statement said. It added that the nationalist the auspices of the EU on the forming of the Serbian Movement Dveri (Srpski Pokret Dveri), a Community of Serb Municipalities so we can see member of the SzS, would not join the UOS, but concrete steps and not just paper,” Vucic told a both sides said they were “ready to cooperate in news conference. He said that Serbia will not quit fighting for media freedom and restoration of the EU-mediated dialogue to normalize relations democracy in Serbia.” “In the coming days, the between Belgrade and Pristina. “We want a true UOS will inform the public about its members and dialogue, not just them saying that we have to announce its further activities,” the statement recognize them… I told (US State Department said. (www.n1info.com) official Matthew) Palmer and (President Trump’s - August 4th, Belgrade daily Politika said on special envoy Ambassador Richard) Grenell that Tuesday that the Defense Ministry refused to in front of (Kosovo President Hashim) Thaci, I comment reports that the Serbian military was told everyone. I understand them, that is the poli- buying a Chinese anti-aircraft system. “Serbia has cy of their countries… But some people are obvi- resolved the issue of long-range anti-aircraft de- ously not interested in discussing railway and air fense by buying the Chinese FK-3 system and the lines,” Vucic said. (www.rs.n1info.com) Defense Ministry did not want to comment the purchase of the modern Chinese weapon nor did COUNTRY ASSESSMENT : it deny the reports which it would have if they Extra-parliamentary opposition is trying to unite were incorrect,” the daily said. According to the its forces presenting a new coalition called specialized Balkanska Bezbednosna Mreza “United Opposition of Serbia”. In the meanwhile, (www.balkansec.net not to be confused with Bal- ruling SNS seeks to form its Government includ- kan Security Network) portal, the state-owned ing parliamentary parties (SPS, SPAS, minority arms trade company Jugoimport-SDPR’s annual parties). Lately, SNS shows somekind of dissatis- report for last year says that one of the signed faction towards SPS but it is assessed that it is contracts was for the purchase of the Chinese an- only a game of negotiations and finally Socialists ti-aircraft system. The Serbian-language portal will join the new Government. However, SPAS said that the purchase was a sign of deepening has also a lot of possibilities to become member

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of the new ruling coalition. The question is in - August 7th, anti-government protests continued such a scenario who will be the opposition in the for the 16th straight Friday in Ljubljana, this time Parliament! The EU and US express through var- targeting the handling of coronavirus outbreaks at ious channels their concern over Serbia’s demo- care homes. Meanwhile, dozens took to the streets cratic rule, media freedom and human rights. in Izola following the reports that the coastal town Moreover, the close relation of Serbia with Russia had paid two hotel rooms for Agriculture Minister (and China) is another reason of the Western Aleksandra Pivec. The protesters there also de- concerns. Serbia seeks to discuss technical and manded resignation of Mayor Danilo Markocic, a economic issues with Kosovo avoiding to talk member of Pivec’s Democratic Party of Pension- political issues which may include Kosovo recog- ers of Slovenia (Demokratična Stranka nition. This stance may lead dialogue in a poten- Upokojencev Slovenije - DeSUS), who has also tial deadlock. Serbian delegation is expecting come under fire over contentious property deals. unbearable pressure from the EU on Belgrade = (www.sta.si) Pristina dialogue for signing an agreement. The th - August 8 , Agriculture Minister and Democratic EU has raised serious concerns over Serbia’s Party of Pensioners of Slovenia (Demokratična effectiveness on independence and accountability Stranka Upokojencev Slovenije - DeSUS) Head of the judiciary, freedom of expression, preven- Aleksandra Pivec has again rejected in an inter- tion of corruption and the fight against organized view for Vecer conflict of interest and corruption crime. Serbia pays special attention in improving allegations raised against her, while she also operational capabilities of its Armed Forces de- spoke of “putsch” developments within DeSUS claring towards all sides that they are the power and her belief the party’s former President Karl of the state. It implements an ambitious armament Erjavec is indeed attempting a comeback. She program mainly supported by Russia and China categorically rejected the possibility of joining the (lately).. senior coalition of Slovenian Democratic Par-

ty (Slovenska Demokratska Stranka - SDS) if she SLOVENIA: August 5th, the Interior gets replaced. “I never identified with right-wing Ministry welcomed Italy’s decision to send an politics. However, I am very pragmatic when it additional contingent of soldiers to the Friuli comes to executing matters of content and a loyal Venezia Giulia region to help monitor the border partner on top of that,” she said. (www.sta.si) with Slovenia due to an increase in illegal migra- COUNTRY ASSESSMENT : tions. “Every additional measure on any side of the border is welcome, as this can reduce the ap- Janez Jansa’s Government enjoys relative stabil- peal of a migration route.” The Ministry said this ity. Anti-government protests continue in the had been one of the topics discussed by the Slo- country but they are not assessed as a threat venian and Italian Interior Ministers in relation to against the state’s stability. Opposition does not the surge in migration on the Western Balkan feel so powered to challenge Jansa’s cabinet. route. (www.sta.si) Slovenia – Croatia dispute regarding the Piran Bay is still active but without tension or escala-

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tion. The Slovenian Armed Forces face problems nearly 40,000 people, including women and chil- mainly in the field of modern equipment and dren. Ankara has repeatedly criticized that the manning. According to the Armed Forces annual PKK and its Syrian affiliates continue to use assessment the Armed Forces have limited opera- Germany as a platform for their fundraising, re- tional capabilities in war time namely they cannot cruitment and propaganda activities. accomplish their mission. Adoption of an ambi- (www.dailysabah.com) tious 780 million euro modernization project may - August 5th, several international banks failed to improve operational capabilities of the Slovenian close their lira positions with Turkish counterparts Armed Forces. on Tuesday, an outcome of policies that are keeping a lid on local-currency liquidity offshore, ac- rd TURKEY: August 3 , Germany ap- cording to people familiar with the matter. For- proved millions of Euros worth of arms deliveries eign lenders were unable to meet lira obligations to Turkey after its cross-border counterterrorism as the cost of borrowing in the currency jumped operations into Syria, according to the response to as high as 1,050% for offshore investors, people a parliamentary query fielded by Sevim Dagdelen said, asking not to be identified discussing sensi- of the Left (Die Linke). In the nine and a half tive information. The banks’ failure is reminiscent months between the start of the operation on Oc- of previous dislocations in the offshore lira mar- th nd tober 9 , 2019, through July 22 , 2020, the Gov- ket, where regulators have engineered a lasting ernment gave the green light for deliveries worth liquidity crunch to prevent a disorderly deprecia- 25.9 million Euros. But there were no weapons of tion in the currency. That resulted in several set- war among those exports, according to the re- tlement failures similar to Tuesday’s, and, as a sponse provided by the Economics Ministry consequence Turkish regulators temporarily which DPA has seen. Turkish troops entered banned local lenders from trading with Citigroup northern Syria to combat the YPG terrorists, the Inc., UBS Group AG and BNP Paribas. A person Syrian offshoot of the PKK terrorist group. The familiar with policy makers’ thinking said regula- German Government then imposed a partial arms tors were unlikely to impose fines over Tuesday’s export ban, which only applies to weapons and settlement failures. Turkey’s banking regulator other military equipment that can be used in Syr- declined to comment. The latest supply squeeze ia. In 2018, arms sales to Turkey – a NATO ally – followed heavy interventions in the currency totaled 242.8 million Euros, making up for almost market last week. Dollar sales executed by state a third of Germany’s defense industry business. banks to prop up the lira began to settle after a This made Turkey by far the number 1 importer public holiday, draining the supply of local cur- of German weapons. Ankara has long criticized rency and pushing the overnight borrowing rate in German authorities for not taking serious the offshore market to its highest level in 17 measures against the PKK, which is listed as a months. To deter short sellers, foreign investors terrorist organization by Turkey, the US and the have essentially been barred from borrowing from EU and waged a terror campaign against Turkey local banks and do not have access to Turkish for more than 30 years, causing the deaths of Central Bank funding. As a result, those without

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liras on hand have to borrow the currency in the such activities in the region. NATO members offshore market — where supply is limited — Turkey and Greece have long been at loggerheads driving up the rate. Behind the strains are con- over overlapping claims for hydrocarbon re- cerns about the level of Turkey’s reserves and an sources and tensions flared up last month, aggressive monetary easing cycle that is fueled an prompting German Chancellor Angela Merkel to outflow of foreign capital. Facing pressure on the hold talks with the country’s leaders to ease ten- currency to weaken, authorities have been leaning sions. “We have started drilling work again,” on state banks to bolster the lira with dollar sales, Erdogan told reporters after participating in Fri- rather than raising interest rates or curbing the day prayers at the Hagia Sophia mosque. “We do supply of credit. The Central Bank’s gross cur- not feel obliged to talk with those who do not have rency reserves have dropped by more than a third rights in maritime jurisdiction zones.” He said this year to 49.2 billion US Dollars as of July 17th, Turkey’s BARBAROS HAYREDDIN PASA, a 2020. Including gold, they stand at 89.5 billion seismic survey vessel, had been sent to the region US Dollars. Of this, more than 54 billion US Dol- to carry out its duties. The ship moved into waters lars is borrowed from local lenders through short- off Cyprus in late July and remains in that region. term swaps, according to the latest available data Erdogan made the comments when asked about through the end of June. As in previous episodes an accord signed by Egypt and Greece on Thurs- of funding stress, investors struggling to get hold day designating an exclusive economic zone be- of liras started dumping their stock and bond tween the two nations in the eastern Mediterrane- holdings, according to two traders familiar with an. Diplomats in Greece said their agreement nul- the matter. The Borsa Istanbul 100 Index fell lified an accord reached last year between Turkey 3.5% on Tuesday, while the yield on Turkey’s and the internationally recognized Government of benchmark two-year bond rose above 12%, its Libya. Erdogan, however, dismissed the Egypt - highest level since April. Signs of normalcy re- Greece deal, saying Turkey would sustain its turned to financial markets on Wednesday, with agreement with Libya “decisively.” Commenting the overnight rate plunging back down to 6.8%, on the agreement, Turkey’s Foreign Ministry said just below the Central Bank’s own benchmark. the zone included in the Greco - Egyptian deal Still, the cost of borrowing money for two nights falls under the area of Turkey’s continental shelf. was around 100%. The lira breached the psycho- Ankara has maintained that sea boundaries for logically important level of 7 per dollar on commercial exploitation should be divided be- Wednesday, slipping as much 2%, despite efforts tween the Greek and Turkish mainlands and not by state lenders to stop the slide. It is weakened include the Greek islands on an equal basis. Ath- more than 15% against the US currency this year. ens contends that Turkey’s position is a violation (www.aljazeera.com) of international law. (www.aljazeera.com)

- August 7th, President Recep Tayyip Erdogan has COUNTRY ASSESSMENT : announced that Turkey has resumed energy exploration work in the eastern Mediterranean, say- Turkey continues to implement a multilateral and ing Greece had not kept its promises regarding multidimensional foreign policy seeking to secure

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its national interests. Speaking about Turkish by the Syrian Kurd threat. What really hearts national interests, these could be specified on Turkey in all these grand strategic plans is econ- internal stability, energy security, regional bal- omy. With Lira facing strong pressures and with ance of power and elimination of regional threats. Central Bank’s gross currency reserves in histor- Having this in mind it could be easily explained ic low, Turkish economy is under serious threat. why Turkey has expanded its presence and influ- Under these circumstances, economy could be- ence in so many fronts. The Turkish – Libyan come the “Achilles’ heel” for President, Recep agreement on maritime zones in Eastern Mediter- Tayyip Erdogan and the state’s internal stability. ranean is nothing more than Turkey’s reaction in The country continues to face several restrictions its regional isolation due to the East Med Forum in freedom of expression and human rights. Elect- of Cyprus, Egypt, Greece, Israel, Italy, Jordan ed MPs, Mayors, journalists and thousands of and Palestine (authority). Turkey is threatened to citizens are in custody or convicted by the state be excluded from the energy plans of Eastern Courts. Local and international observers claim Mediterranean and it will not accept it by any the country moves towards an authoritarian re- chance. This could explain the Turkish aggres- gime with thousands of citizens being persecuted. sive activity in the region seeking to establish its Turkey develops an ambitious armament project presence and make clear that consolidation of aiming at becoming self-sufficient in defense sec- East Mediterranean as a new energy hub needs to tor; if it succeeds it will set the base to become a Turkey. Greek – Egypt agreement on maritime regional military super power. Without any ques- zones could not be accepted by Turkey since it tion, Turkey has the characteristics of a regional cancels the Turkish – Libyan memorandum. Un- superpower and it tries to act like one. However, der these circumstances tension is escalating once the most important for taking this role in the re- again in the region and Turkey announced hydro- gion is to stabilize its economy and secondly to carbon drills in the sea between Crete, Kar- improve its military capabilities. pathos, Rhodes and Kastellorizo. Greek and Turk- ish Navies is expected to deploy again bringing the two countries close to a “hot” incident or www.hermesresearch.eu accident. In Libya, Russian, French and Egyptian email: [email protected] intervention has slow down Saraj military ad- Editor in Chief: Ioannis Karampelas vance threatening Turkish interests. Turkey fo- cuses lately on Nagorno Karabach conflict declaring that it will help Azerbaijan with military NOTE assets. In this context it has deployed military forces in Azerbaijan conducting large scale mili- Stable situation. No security risk. tary exercises which look like preparations for a Rather stable situation. Security risk is mon- large scale military operation. In other words itored. Turkey is ready to military engage in another front. Finally, in Syrian front Turkey has achieved to stabilize its presence and securing the country

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Major concerns over stability and security. significant security risk in specific regions. Low tension incidents.

Imminent major incidents regarding stability and security. Violent incidents or armed violence in specific regions. Ongoing tension or crisis. High security risk.

Evolving or ongoing crisis including major armed violence or violent/armed conflict. Civil, inter-state or non –state actors war.

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