Putin's Likely Successor, Pledging Support for Serbia, Signs Pipeline Deal

By Danica Kirka
Associated Press
Tuesday, February 26, 2008

BELGRADE, Serbia, Feb. 25 -- Russia's likely next president, visiting the Serbian capital, pledged Monday to support Serbia in its showdown with the West over Kosovo's declaration of independence.

Dmitry Medvedev, chairman of Russia's state-controlled energy giant Gazprom, presided over the signing of a deal potentially worth $1.5 billion to route a 550-mile natural gas pipeline through Serbia.

Although that agreement was at the center of his visit, he also criticized Kosovo's declaration of independence from Serbia as well as Western support for the move. Kosovo's breaking away "absolutely" violates international rules, he said.

"Serbia needs support now," Medvedev said.

Serbian Prime Minister Vojislav Kostunica on Monday demanded that the United States rescind its recognition of Kosovo and warned that "there will be no stability" until the "fake state" is annulled.

With Serbia as a political and economic partner in the Balkans, Russia has a loyal ally in the heart of Europe, reaffirming its position as a key global player. The pipeline deal also may boost Russia's influence as energy supplier to the continent.

Moscow's control of key energy routes has raised fears that it could use supply as political leverage -- rewarding countries that support its policies and threatening hardship for those that do not.

Medvedev, however, said the project, known as South Stream, and others pending with Serbia "form the foundation of energy stability for all of Europe in the future."

Medvedev is President Vladimir Putin's chosen successor. Opinion polls show him the overwhelming favorite to win Russia's presidential election March 2.

Few details about the pipeline deal were released. Analysts suggest that Serbia is giving away some of its most valuable assets to Russia at bargain-basement prices.

Medvedev also toured Serbia's oil refinery in Pancevo, just outside Belgrade, where he said that a deal to buy Serbia's state oil company, NIS, will be signed soon.

Russia has offered $600 million for a controlling stake in NIS and $730 million to modernize the run-down company. The offering price for a controlling stake, analysts say, is about one-fifth the company's market value.

Some Serbians do not welcome closer ties with Moscow, however, citing Putin's autocratic style and the refugee status that Russia granted to the widow of former president Slobodan Milosevic. Mirjana Markovic and the couple's son, Marko, are both wanted in Serbia for embezzling millions of dollars. Milosevic died in 2005.

But ties among the two countries' Orthodox churches remain strong, a point Medvedev highlighted when he joined President Boris Tadic for a visit to St. Sava Temple, the largest Orthodox Christian church in the Balkans.

The two lit candles in the Christian Orthodox tradition and were greeted by a local priest, the Rev. Luka Novakovic. "We see your arrival here as support to the Serbian nation and Serbian Orthodox Church at the time when there aren't many states and nations who support us and stand by us," Novakovic said.

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