Russian President Vladimir Putin, left, and Serbian President Tomislav Nikolic shake hands at their meeting in the Kremlin in Moscow, Russia, Saturday, May 9, 2015. Tomislav Nikolic is attending the celebrations marking the 70th anniversary of victory over Nazi Germany. (Alexei Nikolsky/RIA-Novosti, Kremlin Pool Photo via AP)

On January 11, 2016, Russia's Deputy Prime Minister, Dmitri Rogozin announced Moscow's intention to arm Serbia with sophisticated weaponry, including S-300 surface-to-air missiles. Belgrade's decision to deepen military cooperation with Russia caused controversy in Brussels, as Serbia in recent months has taken tangible steps towards accession to the European Union.

Serbian president Tomislav Nikolic has insisted that Serbia's strengthened alliance with Russia will not compromise its EU membership aspirations. But difficulties in balancing relations between the increasingly hostile European and Russian blocs, and long-standing tensions over Kosovo's status are significant roadblocks to eventual Serbian EU membership.

Serbia's contradictory foreign policy strategy of simultaneously expanding linkages with Russia and the EU can be explained by two main factors. First, Serbia's views on state sovereignty align more closely with Russian perspectives than the Western consensus. This normative synergy caused Belgrade to implicitly support Russian conduct towards Ukraine and Turkey. Second, Russia, to combat its international isolation and to partially offset the breakdown of relations with Turkey, is offering Serbia the opportunity to bolster its economic and military development, without the conditions typically imposed by Western economic institutions.

Serbia and Russia: Normative Partners on State Sovereignty

Since the Yugoslav wars of the 1990s, Serbia has defied the Western consensus on state sovereignty, by arguing that Kosovo is an "integral" part of its territory. This contrasts with the 23/28 EU member states and 24/28 NATO members who have recognized it as an independent country.

Russia has consistently supported Serbia's position on Kosovo. In 2008, Vladimir Putin warned that the legitimization of Kosovo's declaration of independence would destabilize the international system. Russian Foreign Minister Sergey Lavrov described unrest in Tibet, and Albanian autonomy demands in Macedonia as pernicious consequences of Kosovo's de facto secession from Serbia. The Kremlin's view that the EU was violating international law and Serbian sovereignty over Kosovo, and placing ethnic Serbian enclaves at risk of violence, consolidated the long-standing Russia-Serbia partnership.

The 2014 Russian annexation of Crimea gave Serbia an opportunity to reward Russia for its resolute support for Belgrade's position on Kosovo. Initially, however, Serbia's position appeared unclear. Immediately after the annexation, Serbian Prime Minister Alexander Vucic emphasized his country's support for the territorial integrity of Ukraine. This solidarity built on the deep cultural, economic and humanitarian partnership between Serbia and Ukraine, that was highlighted by former Ukrainian president Viktor Yushchenko's 2009 statement supporting Serbia's WTO membership aspirations. Vucic's statement matched Viktor Yanukovych's 2010 opposition to Kosovo's independence, to uphold international law and avoid an Abkhazia-style frozen conflict in the Balkans.

But Serbia's refusal to impose sanctions on Russia and right-wing political leaders' open support for Crimea's re-incorporation with Russia diluted the credibility of Vucic's commitment. Belgrade has provided informal military assistance to pro-Russian separatists in Donbas, with Serbian paramilitaries fighting openly in Donetsk. Many European policymakers believe that Serbia regards Crimea's union with Ukraine after 1991 to be an illegal action analogous to Kosovo's unilateral secession. As Russia is a vital international partner supporting Serbia's position on state sovereignty, Serbia pledged its unerring loyalty to Moscow to reaffirm its historic alliance, even though this pact could greatly complicate its EU accession.

More recently, Serbia expressed rhetorical solidarity with Russia after Turkey's November 2015 shoot-down of a Russian Sukhoi Su-24 plane that was allegedly flying over Turkish airspace. President Nikolic blamed the incident on Turkey, claiming that the Turkish military had frequently violated the airspace of Greece and Syria with impunity, and questioned the credibility of Turkey's commitment to counter-terrorism.

Serbia subsequently sought to cool tensions with Turkey, by emphasizing the two countries' economic partnership and by offering mediation assistance in the Turkey-Russia dispute. But these diplomatic overtures obscure the shared suspicion of NATO military activities between Belgrade and Moscow, which revealed itself in Nikolic's condemnation of Turkish actions. The distrust engendered by NATO's bombing of Serbian territory during the 1999 Kosovo War partially explains Nikolic's unwillingness to accept NATO's argument that Turkey had a legitimate right to self-defense against Russia, and has caused Serbia to view Russia as a more trustworthy military partner.

The Economic Foundations of Serbia's Partnership with Russia

Since the imposition of Western sanctions against Russia in 2014, the Kremlin has tightened its economic linkages with Serbia. Serbia remains heavily dependent on Russian energy exports, as 80% of its gas imports come from Russia. Russia has exploited this dependency by charging Serbia $340 per thousand cubic meters of natural gas, a rate that is considerably higher than what Moscow charges Hungary and Ukraine. While Serbia has actively courted Western investment to improve its energy infrastructure, its lack of alternative short-term energy partners has forced it to accept Russia's pricier exports.

To offset Serbian qualms over Russia's dominance of the Serbian gas market, Russia has invested considerably in Serbia's economic diversification and development. This assistance became particularly important after February 2012, when the IMF temporarily suspended its loan deals with Serbia as retaliation for Belgrade's refusal to comply with IMF targets. After Serbia's IMF dispute, Russia expanded investment in Serbia's infrastructure. Putin pledged the expansion of the South Stream pipeline in 2012 and offered to lend Serbia $800 million for a railway track between Belgrade and Pancevo.

Russia's provision of credit to Serbia during a period of tension with the Western economic establishment also extended to the heavy industry and defense sectors. Russia established a humanitarian center in Southern Serbia to facilitate Serbia's purchase of Russian military equipment. The Economist Intelligence Unit (EIU) regarded these deals as steps towards making Serbia a Russian corner in Europe, akin to Cyprus.

The Serbian state media's coverage of investment flows has also benefited Russia's image amongst the Serbian people. Substantially more attention given to Russian development aid relative to EU funds in the years after Slobodan Milosevic's demise in 2000, caused 47% of Serbians to regard Russia as its main economic backer compared to 28% for the EU in 2014. This statistic was misrepresentation of reality, as the EU provided substantially more economic assistance to Serbia than Russia after the devastating spring 2014 floods.

The Serbian public's increased recognition of the value of the EU assistance over the course of 2015 could explain Russia's recent expansion of ties with Belgrade. As Moscow finds itself increasingly isolated internationally, Putin wants to entrench the idea of a Russia-Serbia special relationship at a time when an increasing proportion of Serbians believe that European integration is the ideal way forward for their country.

Russia's strained relations with Turkey following the shoot-down crisis could also benefit the Serbian economy. The Russian state media fuelled speculation in January 2016 that Russian automobile exports to Turkey could be re-routed to Serbia. Russia could also expand trade with Serbia's agriculture market to gain access to produce that Turkey has been banned from selling to Russian markets. As Serbia's economy is still undergoing a recovery from a 2013-2015 recession that reduced its productivity by 10% , short-term Russian investment is very appealing for Serbian policymakers.

In light of the economic benefits associated with Serbian trade with Russia and the compatibility of the two countries on sovereignty norms, it is unsurprising that Serbia is tightening its partnership with Russia simultaneously with its pursuit of EU accession. The crises in Ukraine and Turkey have tested the viability of Serbia's foreign policy balancing act, and Belgrade's refusal to commit to one side during a period of hostile EU-Russia relations leaves its economic prospects hanging in the balance.