Montenegro, the candidate for entry into the EU trapped by a debt with China

PARIS.- Could China “buy” Montenegro? There is nothing extravagant in the question. Victim of a leonino contract, the small Balkan country will have to repay Beijing the billion dollars of a loan requested to build “the highway from scratch”. But it does not have the necessary funds and cannot count on help from the European Union (EU). The problem is the secret clauses of the contract.

The stones of Montenegro are hard as steel and sharp as glass. And climbing the slope of the canyon that hosts the “Chinese road” is nothing short of a walk. It is precisely there, in the heart of the Balkans, that China has come to build what many Europeans already call “the highway that came out of nowhere”. A magnificent piece of engineering and ingenuity. Even if it is above all a large-scale geopolitical maneuver, a gigantic stone in the cogs of the EU, which could shake the bloc.

Seen from the banks of the Moraca, the river that descends towards the capital, Pogdorica, the viaduct pylons emerge from the rocky valley like missiles ready to take off in space. They are gigantic, disproportionate for a European motorway. But especially for a small country like Montenegro. For many, the play will be an adventure that will never end. Especially because, since July 1, Montenegro will have to start repaying its debt of around $ 1 billion, contracted with China. The problem is that the country lacks funds and will not be able to finance the missing 80 kilometers of road.

The China Road and Bridges Corporation, a Chinese state-owned company that does much of the work with Chinese workers, is slow to complete the 41 kilometers of the first section. But the contract foresees that Montenegro will start repaying from July about 66 million euros per year for 14 years.

The construction of two additional sections should continue to connect the Montenegrin port of Bar to the Serbian border – sections for which Montenegro has not yet secured funding – and then launch the extension that will go from the Serbian border to Belgrade.

The problem is, car and truck tolls won’t pay for everything. 12 million cars per year would be needed. That is 32,800 per day, in a place where no more than 4,000 per day could pass.

Montenegro is a country of 620,000 inhabitants, which lives mainly on tourism, various services and international aid. The debt owed to China for the construction of only one third of the road represents 25% of the total debt of the country. And, to cover itself, China has decided to “buy” the country through secret clauses contained in the contract: if Montenegro does not pay, it will be forced to give something to Beijing.

Let’s do a bit of history: when Sri Lanka was unable to repay the debt related to the construction of the gigantic Hambantota port, Beijing took control of the port for 99 years.

Trojan horse

Small clarification: Montenegro is the first candidate to join the European Union (EU). “It’s not a highway. It’s a Trojan horse! », Exclaims a Brussels source.

Two weeks ago, the young Dritan Abazović, pro-European deputy prime minister of the Montenegrin government, supported by an alliance of three coalitions of small parties, traveled to Brussels to ask the EU to “help them pay”.

The request caused a small earthquake at the European Commission, led by the German Ursula Von der Leyen. Their spokespersons replied that “Europe cannot pay the debts that one country has contracted with another”. In other words, the EU cannot pay Montenegro’s debts with China with its citizens’ money. On the other hand, at the time, the bloc was opposed to this project.

“We must find a solution. We have nothing against the Chinese. The fault lies with the previous government, when we were in the opposition. We voted against a law which allowed the conclusion of this secret contract,” said argue the young Abazović, a 35-year-old former anti-corruption activist, stressing that his country will have “One of the most expensive highways in the world: 26 million euros per kilometer”.

“We are not asking for a donation, but for a financial arrangement to increase and diversify this debt. We need around 500 million euros, ”he explains.

According to the vice premier, the agreement provides that China can demand immediate repayment of the loan at any time and, failing that, ask for land or natural resources in compensation. On the other hand, Beijing has demanded that all legal disputes be settled by a Chinese court, and in the event of a proceeding, China will also be the judge.

For its part, the Chinese Embassy in Montenegro defends its project, specifying on its website that “the interest rate on the loan is only 2%”.

“Our contract does not respond to any geopolitical reason” or “political condition” and “does not represent a threat to security”.

According to the text, “Chinese investments in the Western Balkans are aimed at helping countries in the region to join the EU”.

Montenegrin diplomat and university student, Miodrag Lekić is now chairman of the foreign relations committee of his country’s National Assembly, which has 81 deputies. “The Chinese are not innocent. They knew perfectly well that our economy was very fragile and that we would have great difficulty repaying it: so they protected themselves, ”he says.

“This is how China places its pawns: in Montenegro, in the Balkans, but also in all of Europe”, says Lekić. According to him, the trap planted by the Chinese in the Balkans could be qualified as a “manual case” for countries in difficulty which knock on the door of Beijing without taking precautions.

Who wanted this contract? The current president of Montenegro, Milo Đukanović, in power for 30 years and whose party was defeated for the first time in the legislative elections of 2020. Despite this, he and his party remain very powerful. According to many sources, it was men from the ruling Democratic Front who created the company, through the construction company Bemax, considered close to the political group.

Today, Bemax is ultra-rich; Montenegro, the ultra-poor and China have placed Europe between a rock and a hard place. If the EU does not help this country find the funds to repay the debt, China will become the “owner” of a state that is soon to become a member of the bloc.