Her Trip to The Sochi Resort

A carefully prepared journey, at least at first glance, looked as a search for reconciliation. The time was right as well. Just before the close day of the memory of the dead, the President of the Republic of Croatia, Kolinda Grabar Kitarović, made a visit to Russian President Vladimir Putin.
There were at least two reasons for such a trip. A new waking up of cold political relationship with a large state on the edge of the European Union and a search for a solution to the demands of the Russian state bank on the return of a large amount borrowed to the falling Croatian economic giant, concern Agrokor.

However, those who prepared the president’s Russian talks overlooked a significant matter. That the improvement of political relations will not be enabled with less demanding negotiations on the method of returning of economic debts, but that exactly the possible agreements for new ways of settling of bank debts will determine possible new relations between the states.

That this should be firstly discussion about money, good billion of euros and only then on interstate relations. Therefore, it could not have been a surprise that the place at the table where the talks were held was intended for the head of the Russian bank, Agrokor’s creditor Herman Gref, who was probably already informed about the news that a few days later shook the Croatian capital. That is, precisely what the Croatian government mentioned as insignificant and something that was unnecessarily getting wider attention was determined. That a special law, named simply lex Agrokor, contains provisions that give, to specific creditors, among which, of course, there is no Russian Sberbank, exceptional powers that are beyond the power and influence of the Croatian government and negate it in some way. It was precisely because of this why it was almost unpleasant to follow the public assurance that came from the President’s Cabinet that President Putin in some way reproached Gref that he should not be a miser and that he should forget that crumb called billion euros. Only after returning home, Grabar Kitarović emphasized that before the trip to Sochi, she was not informed about such important details of the special law and also immediately pointed to the possible culprit, the Croatian government and its president, Andrej Plenković. At the same time, she immediately demanded, contrary to the assessment of the Croatian ruling party to which she belongs, that the parliamentary investigation commission investigating the background of the fall of Agrokor continue its work and determine all political culprits who are or were responsible.

The reason for the president’s protests could also be in advance assessments of the consequences of the re-trading of Agrokor shares on the Zagreb Stock Exchange. As it turned out a few days back, it would be politically purposeful for her. Agrokor’s shares have literally lost value, also due to the sale of pension funds and state-owned companies.

The second reason might be the announcement of the opposition MP’s initiative on voting of confidence to the Prime Minister Plenkovic. However, this would still not be enough for the president’s such unusual prominent distancing and the creation of a political difference between her and the government.
First, because Plenkovic cannot be voted against in the Croatian Parliament for a number of internal political reasons. Even because of the inability of the leading opposition party of social democrats whose parliamentary representatives do not want such a result and consequently new elections.
Therefore, the reasons for the president’s last response to the Agrokor problem must be sought elsewhere.
And let us go back to the Russian Sochi, with at least a provisional assessment that the president knows a little more, that the talks in the residence of the Russian president have not only ended with routine protocol and state inclinations. Obviously, a significant part of the conversation could be the message of a different Russian attitude towards the region and Croatia.

In October 2016, Putin took part in a two-day summit of BRICS countries (Brazil, Russia, India, China and the Republic of South Africa) in the Indian state of Goa. At the end, he had a conversation with reporters on global politics and the problems of the world, with obviously deliberately mentioning the former Yugoslavia. First, with the old thesis that certain opponents would want Russia to break up similar Yugoslavia’s bloody disintegration, and then with a new remark that US and Russian relations began to deteriorate, not because of the war in Syria, but that the process has begun with the breakup of Yugoslavia.
It was Putin’s announcement that Russia in the region today will no longer have only a secondary role as it had in the time of the Yugoslav wars, the nineties of the last century. The announcement was not made by chance. Putin said it with a significant visit to Serbia on the occasion of the celebration of the 70th anniversary of the liberation of Belgrade in October 2014 and just a few months before that, with the loan of the largest Russian state bank to Agrokor for the purchase of the Mercator trade company. If the visit to Belgrade was expected, the approval of a large loan with the high interest rate for the Croatian concern, which was already back then in business and financial problems, could not have been accidental. It was too high and too expensive to be returned. Russia did not want to have a secondary position in the region anymore. It began to renew its strategy of greater presence in both countries, which significantly co-create relations in the Western Balkans, as well as in Serbia and Croatia.

At the time of the president’s stay in Sochi, the 10th European-Asian Economic Forum was held in Verona, Italy. The main and above all the carefully listened speaker was Putin’s personal friend, president of the large oil company Rosneft, Igor Sechin.
He talked about the new development expansion of the company he manages, about new technologies and new markets. In his presentation, I was looking for only one of his views, an assessment of Rosneft’s intentions in the region. In September 2013, Sechin visited Zagreb. At that time, during a conversation with Prime Minister Zoran Milanovic, he pointed out that for his company, Croatia was geostrategically interesting, because they could enter the market of Austria and Germany through it. There was no greater response back then. However, the initiative was repeated only a few months later, in a document titled Study on the Regional Spreading of Rosneft, which was obtained by today’s executive editor of the Zagreb Jutarnji List, Marko Biočin.
It turned out that the Russian company was considering the possibility of taking over the Croatian oil company “Ina” and at the same time acquiring at least a stake in the Slovenian oil company “Petrol”. One part of the study assesses that such synergy of “Ina” and “Petrol” would enable their significant influence in the retail trade of oil derivatives in the countries of former Yugoslavia and Albania, as well as the possibility of entering the wholesale markets of Austria, Hungary and Northern Italy. And also because the oil storages in the Kopar hinterland would become a distribution centre for the placement of derivatives from the Rosneft Refinery in the Black Sea Tuapse to the markets of Western and Central Europe. Later, they stopped mentioning Petrol in such connections, also due to the determined management by Tomaž Berločnik, who developed the company into a good wholesaler in the European markets.

The police investigation of Dr Ivo Sanader and the suspicion that he agreed to a bribe of 10 million euros at one of Zagreb’s restaurants and enabled the Hungarian “Mol” to take over the management rights in “Ina”, started already in June 2011 and cooled down relations between not only “Ina” and “Mol”, but also between the two governments. The Hungarians announced that they would sell their share, and Sechin estimated that Croatia was on the border of the Balkans and developed European countries and that as such it was an interesting market for Rosneft.

Therefore, it is very likely that they have already started talks today with the Hungarian government of Viktor Orban on taking over their share in the Croatian “Ina”. In the conversation, after meeting in Verona, Sechin reiterated his interest in such an acquisition. And quite in line with the probability of implementing such decisions, this new step of entering of Russian capital into Croatia was, at least casually, also mentioned at a meeting in Sochi.
And this is precisely the reason for such a strong and manifestative dissociation of the president of the Croatian state from the president of the Croatian government.
In fact, her assessment that in the Agrokor case, during the parliamentary investigation, there will be facts which the current government will not be able to explain, and the simultaneous assessment that in such complicated operations as the possible entry of a Russian giant and the takeover of the Croatian oil company, it would be better to stand by the side and have time to assess the political consequences that it might bring.


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