Welcome to the club.

Photographer: Jonathan Ernst/AFP/Getty Images

NATO Expands. Russia Yawns.

Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.
Read More.
a | A

Why would the North Atlantic Treaty Organization want a new member state with a military of 2,000, a population slightly larger than Luxembourg's and about 8 percent of the economic output? 

One explanation for the invitation NATO has extended to Montenegro is that the alliance wants to tell President Vladimir Putin it won't be intimidated by Russia's saber-rattling, and will keep expanding at its own pace. Accepting Montenegro is a good way to send that message: The Balkan country has close ties with Russia; it even has a similar coat of arms -- the double-headed eagle.

Russia, however, was probably resigned to Montenegro's accession to NATO. It would have been a much greater provocation if the alliance had invited Georgia, also an aspiring member, or accelerated Ukraine's application.

Montenegro is unusually tethered to Russia. The two countries have a visa-free travel and free trade agreement, and Russia is Montenegro's biggest source of foreign capital. In 2014, it accounted for 25 percent of foreign direct investment, more than the two next-largest investors, Switzerland and the Netherlands, put together. Much of the Swiss and Dutch investment is probably Russian, too: Those nations are favorite tax havens of Russian businesses.

Most of the money goes into real estate, from major hotel projects funded by top Moscow developers to homes. According to the Economist Intelligence Unit, Russians own about 40 percent of all properties in Montenegro. Many of these are second homes -- about 20 percent of Montenegro's foreign visitors are from Russia -- but thousands are permanent residences. The local languages -- Montenegrin and Serbian -- are similar to Russian, and Montenegro's Investment Promotion Agency lists the Russian proficiency of the locals as one of its advantages. 

Not long ago, if you liked Russians, you weren't supposed to like NATO, and Montenegrins didn't. In 2013, only 38 percent of them supported accession to the alliance. Many of the inhabitants are Serbs who remember NATO's role in the Balkan wars of the 1990s. Prime Minister Milo Djukanovic, who has run Montenegro since 1991 -- making it the only nation in Europe whose leader hasn't changed in the last quarter-century -- was a staunch ally of former President Slobodan Milosevic of Serbia through half of the 1990s. That faded when the Serb's fortunes began to turn.

To Djukanovic, NATO membership was mainly a step toward European Union accession, which only Slovenia and Croatia have achieved among the now-independent components of the former Yugoslavia. In 2009, Montenegro received a membership action plan from NATO (neighboring Macedonia had had one since 1999 but is mired in a dispute with Greece over its name). The process could go on indefinitely.

In 2014, however, Putin attacked Ukraine and annexed Crimea, and Montenegrins' feelings for NATO warmed. Last month, a poll showed 56 support for joining the military alliance. For Djukanovic, who has faced growing opposition, this mood shift has been a blessing. His government joined the EU's economic sanctions against Russia and accelerated the NATO accession process. Now, Djukanovic accuses the opposition, which staged violent protests in October, of being on Russia's payroll, which his adversaries, of course, deny.

Russia probably hasn't put much effort into displacing Djukanovic. That might have made sense earlier this year, when Russia was still hoping to build an undersea gas pipeline to the Balkans to bypass Ukraine. At the time, Russia was accusing the U.S. of stirring up anti-government protests in Macedonia, which supported the gas project. The pipeline, however, ran into EU resistance and had to be scrapped. Now, it would be a losing game for Russia to try to hold back Montenegro's membership. Russia doesn't have any major strategic interests there and NATO is a stabilizing factor in a region where no one, including Russia, wants to see instability.

Last year, Russia did some grumbling about the prospect of Montenegro joining NATO. Foreign Minister Sergei Lavrov said it would be a "provocation." Now that it is practically done, the response has been relatively muted. Asked whether Moscow would take any retaliatory measures against Montenegro, Putin's press secretary Dmitri Peskov said: "Nothing specific is expected so far, there are different priorities."

Montenegro is too small, peripheral and otherwise insignificant to distract Putin from much bigger problems elsewhere. 

As for the Russians who have made the tiny nation their home, they're probably relieved to be under NATO protection. Marat Guelman, once a prominent Moscow art dealer who is now working on an art community project in the Montenegrin town of Budva, backed by a Russian real estate developer, welcomed Montenegro's NATO invitation. "Now the word 'Russians' here will be associated with artists and musicians, not with little green men," he posted on Facebook, referring to the unbadged soldiers Putin had sent to annex Crimea.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Leonid Bershidsky at lbershidsky@bloomberg.net

To contact the editor responsible for this story:
Max Berley at mberley@bloomberg.net