Medvedev visits Serbia bearing $1 billion loan

[October 20, 2009]  BELGRADE, Serbia (AP) -- Russian President Dmitry Medvedev brought a $1 billion loan to recession-hit Serbia on Tuesday, as Moscow sought to expand its political and economic influence in the Balkans with the first-ever visit to Serbia by a Russian president.

The loan deal -- to be signed during Medvedev's one-day trip -- adds to Russia's growing clout in Serbia, which relies on Moscow's diplomatic support in the U.N. Security Council to oppose the secession of Kosovo, Serbia's former province.

Thousands of policemen were deployed on the streets of Belgrade and much of the Serbian capital was blocked to traffic amid tightened security.

"Medvedev's visit will confirm the political unity and mutual support between Serbia and Russia," said Serbia's Foreign Minister Vuk Jeremic.

Last year, Russia's state-controlled gas monopoly OAO Gazprom bought Serbia's major oil and gas assets and agreed to route through Serbia its proposed South Stream pipeline, which aims to bring Russian gas from the Black Sea to Europe.

The South Stream route across the Balkans would avoid Ukraine, with which Russia has pricing and political disputes. It competes with a U.S. and European Union-backed proposed pipeline called Nabucco that would send Europe natural gas from Caspian Sea nations, not Russia, to diversity Europe's natural gas suppliers.

Gazprom has also purchased a 51-percent stake in Serbia's oil company NIS, a deal that gives Russia a monopoly over the sale of gasoline and natural gas in Serbia until 2011.

Serbia and Russia are traditional allies, sharing a common Slavic background and Christian Orthodox religion. But their political relations have not matched the ethnic ties and Belgrade has been seeking to integrate with the West, including joining the EU.

Although reluctantly supporting Serbia's EU bid, Moscow officials have firmly spoken against its possible NATO membership.

The United States would like to see Serbia in the Western military alliance because that would add to security in the Balkans, which is still reeling from bloody ethnic conflicts in the 1990s.

Medvedev will also attend celebrations marking the liberation of Belgrade from Nazi occupation in World War II by Soviet and local communist fighters. He will address Parliament and visit the seat of the Serbian Orthodox Church.

On the eve of the visit, Russian diplomats demanded that Belgrade authorities restore the names of streets formerly named after the Red Army generals who took part in the 1945 liberation of the city.

The names were changed after the fall of President Slobodan Milosevic in 2000. Milosevic had maintained close ties with Moscow.

[Associated Press; By DUSAN STOJANOVIC]

Associate Press writer Jovana Gec contributed to this report.

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