Stability, Security, and Prosperity in Southeastern Europe: A Priority for the Transatlantic Community

Listen to Event Audio 

Southeastern Europe presents many opportunities to the transatlantic community, yet the region still poses numerous challenges. Adversaries have taken advantage of local divisions to cause security problems that could quickly escalate to strategic threats. The region also suffers from poor energy security, and many Southeastern European nations have stalled in their progress toward Euro-Atlantic integration.

Concurrent with the World Bank–International Monetary Fund annual meetings in Washington, DC, Hudson will host a high-level discussion on Southeastern Europe. The first panel will explore the geoeconomic opportunities and challenges, while the second will examine the geopolitical and security dimensions of the region.

Agenda

1:00 p.m. | Panel 1: Geoeconomics of Southeast Europe

• Alexandru Nazare, Minister of Finance, Romania
• Jan Ruzicka, Chief External Affairs Officer, PPF Group
• Anca Dragu, Governor, National Bank of Moldova

Moderator

• Luke Coffey, Senior Fellow, Hudson Institute

2:00 p.m. | Panel 2: Geopolitical and Security Dimensions in Southeast Europe

• Ambassador Philip Kosnett, Senior Fellow, Center for European Policy Analysis (CEPA)
• Justin Siberell, President for Regions and Corporate Relations, Bechtel
• Luke Coffey, Senior Fellow, Hudson Institute

Moderator

•  Peter Rough, Director, Center on Europe and Eurasia, Hudson Institute

Event Transcript

This transcription is automatically generated and edited lightly for accuracy. Please excuse any errors.

Luke Coffey:

Good afternoon, ladies and gentlemen. Thank you for those who are attending here in person at Hudson Institute offices in Washington, DC, and thanks to those who are tuning in online for this important and timely event, Stability, Security, and Prosperity in Southeast Europe. We’re taking advantage of the fact that this week is the week where we have the high-level IMF World Bank meetings here in Washington, DC, so we thought there’d be no greater opportunity than to invite senior officials, business leaders from the region to talk about the geopolitics, the economics of Southeastern Europe, which is a region that, in the big picture, when we talk about China, the Indo-Pacific, and the Middle East and Russia and Ukraine, perhaps doesn’t get as much attention as it should. But history tells us that what happens in Southeastern Europe, at least the consequences of which often don’t stay in Southeastern Europe, and that’s why it’s important that we meet here today to discuss and learn about these issues.

We’ll have two panels. The first panel, which I’m about to introduce, will focus on the economics and the business side of things. The second panel, which we’ll follow immediately after the first, will broaden it out to some of the geopolitical issues facing the region. As I welcome the panelists and introduce them, I must say that I believe all three of you have spoken at Hudson before, at least once maybe, if not more. So it’s great to have you back here today. So the first speaker will be the Minister of Finance from Romania, Alexandru Nazare.

Again, he’s here in town for the high-level meetings, and no doubt he’ll have some very interesting things to say about what it’s like being in Washington, DC, at this time during government shutdown, during potential international trade and tariffs war, and at a time when your country specifically and your region generally is trying to bring in that foreign investment. The next speaker will be the governor of the National Bank of Moldova, Anca Dragu. And goes without saying, anyone who’s in this room will know what just happened recently in Moldova. And in fact, I think if it hasn’t happened already, it will be happening very soon. The parliament will be certifying the election results to make it formal. So it’s great to have her here at this time. And then last but certainly not least, my friend Jan Ruzicka, who is the chief external affairs officer for the PPF Group.

The PPF Group is, perhaps most importantly for me, a very generous supporter of Hudson Institute and enables us to do our work on the region that we do with the generosity and support. But for the region, PPF Group is deeply involved in regional investments, media, infrastructure projects. And from a private industry point of view, there’s probably no better person that we could get to speak to us today about what is happening in the region, how business looks at the region, what are the obstacles, what are the challenges, but what are the opportunities of the region when it comes to investing and promoting economic stability. So Jan, I want to thank you for joining us today.

So I’m going to turn it over to our panelists. I’ve asked each panelist to give some opening remarks, and then I’ll conduct some questions up here as the moderator, and then I’ll open it up. We’ll have someone with a microphone. So if you’re interested in asking a question, try to catch my eye. I’ll call on you and we’ll proceed from there. But without further ado, I would like to welcome Minister Nazare to give us some opening remarks.

Alexandru Nazare:

Well, thank you very much. Well, for me, it’s the first time in Hudson.

Luke Coffey:

It is? Oh.

Alexandru Nazare:

Yes. Thank you for-

Luke Coffey:

The first of many, hopefully.

Alexandru Nazare:

Yeah, thank you. Thank you for the invitation. It’s a first time in Hudson and second time in DC in the last six weeks. First time was especially meeting that was targeting basically a discussion on the commerce department. We’re planning a different attitude towards PPPs in Romania now. Now with the annual meetings, of course, it’s a very interesting format. We had discussions with the World Bank, with the IMF, with all rating agencies, and several other investors. And I think it’s a very good occasion to pass messages about our plans regarding Romania’s economy and the fact that we are planning in the next years to prioritize the economy. In everything what we do, prioritizing the economy is very important. It’s not only because we entertain high fiscal deficits in the last years because we plan a different attitude towards attracting FDIs, attracting investment, a new attitude towards prioritizing investment.

I think this is what Romania needs, and this is what’s needed for 2026 to boost the recovery. It is our main target to relaunch growth. We have a very thin growth in 2025. From 0.8 we’re going to probably 0.6, but we’re planning to have growth in 2026, and we lay down the foundation of this growth by adopting two fiscal packages of magnitude which is outstanding for Romania. Basically, ever since 2009, 2010, we haven’t ever done a consolidation of this magnitude. What happened after we adopted in the first 100 days these packages is that we had a very good reaction from the markets. We had three confirmation of the rating agencies in a row. Basically, S&P published a report yesterday evening, but they confirmed on Friday. So basically, all the uncertainty regarding Romania’s rating is gone for this year because we’ve taken the appropriate measures in this first 100 days.

Now, after laying down the foundation, we have to basically talk about what we do next. And we rely on the EU funds, on RRF, on the Cohesion Funds. We have $10 billion in grants prepared to spend till next year in August, all in RRF and Cohesion Funds, which will for sure boost growth in 2026. We also plan to change the attitude toward FDIs. Romania will not only be expecting investors, but will actually go forward, anticipate, and present our opportunities abroad, especially here in Washington, which is something which we haven’t done for a couple . . . for some years, not a couple of years, to be proactive and present our opportunities. And we have plenty of opportunities in energy and transport, in telecommunications, also natural resources, which we need to present here in the language that the international investors would understand that Romania is a very good destination to invest.

We had one thing in the last 20 years. We had the flat tax, which helped us a lot, which we didn’t change. And the fact that we had this principle, that we had this tax that we didn’t change, allowed for a lot of investment. And we’ve been focusing on capital, instead of jobs on capital, and we had a lot of capital coming in. Of course, things in the last years did not work well, growth slowed down, but now we’re exactly in the moment where I expect, and I’m very optimistic about this, that the economy will recover because we did these things and because the present government has new strategy towards attracting investment and treating investors.

And it’s not only me being here, it’s also the health minister coming, the foreign minister came three times in the first three months, and other ministers being very present and very active abroad because we have to be active abroad, especially in this period. Talking about Southeast Europe now. I think what we need to do, we need to increase the relation that we have, build bridges all countries in Southeast Europe and present projects that would basically treat problems for the entire regions, not for individually for each country.

We have one very interesting project. We have the vertical gas corridor, which will be basically the energy highway for the region, for the future. I truly believe this is a very important project, and it’s strategic. It will boost the economy, and it’s extremely important. We’ve been there from the very beginning. Romania, we’ve been playing this game from the very beginning. We just have to increase it, work on the bottlenecks, and of course, focus on these type of regional projects. Other example is the middle corridor, which is the fastest and the cheapest way to bring goods from Europe to Asia, from Asia to Europe, which, of course, has a lot of potential.

It goes through the Port of Constanta, in which we are planning investment. Not only in terms of hard infrastructure, railway, inland railways, and expanding, but also on the digital side of the port in order to fasten the way goods are passing through Port of Constanta. Also, in this middle corridor equation, we have the Danube, which becomes extremely important and strategic for the future of the region, not only for Romania. And Danube will be part of this corridor as well. So basically, we will play our card better in talking about our strengths, and this, I believe, together with the EU funds and additional investment, will boost the economy in 2026 and 2027.

Luke Coffey:

Thank you. That’s some great framing remarks there for further discussion, but now I’d like to go to you, governor. Can you give us your view from Moldova?

Anca Dragu:

First of all, I’m very happy and honored to be here with you again at Hudson Institute. And in this for Moldova, it’s a very important period of time that we are celebrating the success in recent elections, where citizens really voted for continuing the European trajectory of the country. And last year we had presidential elections, and also we had the vote for continuing the EU accession. And this year, we had the positive results of the main pro-European party. And as you said at the beginning, it’s a matter of hours to have the parliament . . . actually, the elections validated by the constitutional court, the parliament to be set up, and then to have the new government. Our trajectory is very clear, and we have to continue to implement the growth plan. This is an instrument that was agreed and offered by the European Union. It’s something similar with resilience and the recovery mechanism for EU member states.

So it’s a combination of reforms and investments in order to make the Moldovan economy more competitive, more resilient, and to have the economy fit for being a fully-fledged EU member. That’s an important amount of money. It’s 1.9 billion euros for three years. It means over 10 percent of GDP of this year, for example. So that’s a significant magnitude. And there are a number of projects, mainly projects of capital investments, road infrastructure. So this kind of projects, as I said, meant to grow the economy. Talking about growth, we are not doing really bad this year. Actually, we are doing really fine. We have economic growth around three percent for this year. We started from a much modest forecast around one percent, but according to latest figures, for sure, we’ll be around three percent economic growth.

Well, maybe looks fine compared to countries in the region, but for us, it’s not enough. We need to accelerate on the convergence path. So through the growth plan, we will increase the potential output as well as the real output of the country in the coming years. For 2026, 27, we expect to go to four percent and even above. Inflation is calming down. We had an inflationary push at the beginning of this year. We had a sort of energy crisis, but I would call it an important energy reform. Yeah, it meant significant increase of electricity prices and gas, and district heating. Electricity prices increased by 75 percent, natural gas by 27, district heating by 40 percent. As a central banker in charge of containing prices and inflation, that was a nightmare. I think after a peak of inflation of over nine percent, we started the process of disinflation, and we are now at below seven percent. By the end of the year, we’ll be around six percent, and so on.

It means that we are entering our corridor for inflation targeting, and we’ll remain there for the entire 2026, at least. We succeeded to have these good developments on reducing inflation due to, of course, the monetary policy instruments as rightly used by Central Bank, but also in combination with government support and EU support. We had the 250 million euros grant to compensate for increase of bills for citizens, and this helped a lot containing price increase. We are optimistic at this moment, and we came to Washington to annual meetings to express our desire to continue reforms and the investments to make the economy fit for EU accession.

Luke Coffey:

That’s great. And I want to touch on some of those points that you just highlighted, but first, I want to turn to Jan to give us the perspective from the private sector. You are continuously traveling around the region. PPF Group has huge investments in various countries around the region. You have to deal with the optimism that we heard on the panel, but also some of the challenges as well. So could you explain how you see it from the private sector point of view?

Jan Ruzicka:

First and foremost, we are very bullish on the whole region. We are very happy investor to Moldova. We are very happy investor in Romania. This positive attitude of ours, this is the best, I hope, underlying predictor what future will bring, because we are sort of voting with our own money. Currently, we have 35 thousand employees in the region. Exposure is $30, $35 billion in every single country. So Serbia, Bulgaria, Croatia. For us, this is important engine of our company. Why we believe, why we preach the importance of Southeast Europe, I can talk about national security perspective and then economic one. From national security perspective, I see four main pillars why also you guys in US shall be invested mentally into us. Black Sea security, Eastern Mediterranean, immigration, Bosnia again as a problem.

You mentioned that they can be spillover. So Bosnia is real issue. And finally, Russian hybrid operations, every single country. And we are a media business in both countries here, Moldova and Romania. I see Russians every day. I see them in internet space, I see Russian troll farms, I see Russian disinformation. And I understand that disinformation is not fancy these days. It can be really bad. And we see it in elections in Romania, elections in Moldova, like big time. In this region, it’s not unheard of that journalists can be really threatened by death threats. It’s happening in all three countries to our employees, so the security perspective matters. That’s why you guys shall stay invested. But also, there is big economic opportunity. 60 million people, overall growth of Southeast Europe is three percent this year. Western Balkans are a little bit slowing down from 3.8 to 3, but the growth is there. It’s investable.

Nobody will sell you guys from US Areva, nobody will sell you Volkswagen, but the opportunities in Southeast Europe are big. Minister mentioned North-South corridor. This is investment opportunity for companies like Chevron or ExxonMobil, $10 or $15 billion easy. You have a constant support. You have Alexandroupolis LNG Terminal, then you have a Rijeka port. If you guys would like, and this is what White House is preaching, let’s buy not Gazprom gas but our gas. You need pipes for it. And without pipes, Chevron, ExxonMobil cannot thrive. We are hardworking people. Still in Southeast Europe, people like to go to work. So this is not work from home anymore, that people really go. It’s young population. They want consumption upgrade. So also there is a lot of opportunities.

If I see how to move forward, I would say, let’s stop whining. Let’s stop going to conferences for another Brussels’ approval and some big debate about . . .  It’s possible to get better. Example: Poland. Czech Republic and Poland entered the European Union together in the same day. Those days, 20 years ago, Czech Republic was 75 percent of European average GDP per capita, Poland less than 45. Now it’s almost the same. And it’s not only about Tusk and Sikorski, but it was Morawiecki, it was Beata Szydlo. Last decade, Poles are doing hard work. CapEx heavy investments, infrastructure, ports, highways on steroids, defense industry on steroids.

They are using European money rightly, I think, in a right way. I think it’s important really to do strategic projects, not to do that every village has some small European money projects. It’s not possible. You really need to have this kind of vision. And in 10 years, now, Czech Republic and Poland is almost the same, and Poland is $1 trillion economy. It’s possible. You don’t need always to talk about Mario Draghi and big reports, and . . .  Just do your homework. It’s definitely possible. And we see it in Romania, we see it in Serbia, we see it in Croatia. If European Union wants to do Green Deal make true. So currently it’s six times more complicated to do renewable project in Germany than in Romania and Moldova.

This is not PPF, but this one of our leaders who is businessman in his own right. Currently, he has a 1500 megawatts in Romania and Moldova renewable. Not in Germany, in Romania and Moldova. So you need to be welcoming for sure. You need to do, I would say, a red carpet for foreign investors. If there is one strategic thing that we need to do all of us together, and minister mentioned it before, we need to market ourselves as the region. Because on one side, it’s 60 million people, but it’s fragmented. It’s too many small countries, some of them not even in EU or NATO, but possibilities are there. We did it ourselves in European way.

So we brought guys from Abu Dhabi to our telecommunication business. So now we have a joint venture PPF in Etisalat over four European countries. We were able to pass European CBUs. We were able to do all the scrutiny Thierry Breton and Margrethe Vestager brought upon us, and now we have a large JV, and Arabs are interested. And now Arabs saying, “Hey, let’s do more together.” So already after closing of this huge business together, it’s $8 billion deals what we did with Arabs, we already bought $800 million company in Serbia. Now we are looking also to other countries. So it’s possible to have foreigners interested, Abu Dhabi, or you guys here in US, but we need to bring them projects on large scale. Every investment player, Apollo, BlackRock, I can go on. So every company has investment committee and they are thinking only about investments over a certain thresholds.

So for example, when talking about Mubadala, ADIA, and ADQ, so minimum threshold is $200, $300 million, as a minimum. We don’t have many such projects, especially when, for example, Arabs like to have a minority stake. So we are talking about businesses valued $1 billion and more. So it’s important that we do it together. Pipes from Greece, Bulgaria, Romania, Moldova, really $10 billion project. This is something that you guys in US or Arabs or EIB and EBRD will be interested because this is long-term strategic project. The margin won’t be high because it’s infrastructure, but if you calculate this project over 20, 30 years, this is good win-win for you guys, this is good for national security, this is good for countries in the corridor. So I think that we need to market it more. We shall be proud about the progress we are doing. Three percent growth, it’s not many, many places in the world, and we need to do the right things. I am bullish.

Luke Coffey:

Yeah, that’s great. Thanks for that, Jan. I want to go back to Romania. You mentioned, Minister, that your government has been in place for 100 days. In a way, it’s a bit of an arbitrary number, but the media and analysts love to look at 100 day benchmarks to measure any progress or any changes. In the past 100 days, what has your government done differently to do some of the things that you were discussing or Jan was discussing about attracting investors to the region, and what are some of the things you’re looking to do in the next several months?

Alexandru Nazare:

I was talking earlier with governor of Moldova recently like one hour ago about these things. It’s my third time in the Ministry of Finance. First time, it was after the European crisis, 2009, 2010. And I was going to the councils in which we were debating what to do in the European crisis. Second time was in 2021 during the pandemic, very hard time, very high deficit, almost 9.6 when I arrived at the time. And now again, deficit 9.3 in 2024. So every time in a crisis period. I think crisis is also an opportunity. And for Romania, it’s the opportunity to do the deep changes that Romanians were expecting for a very long time. And this means restructuring, mainly restructuring the state, restructuring the SOE sector, rethinking the way we are doing investment prioritization, rethinking the way we’re doing FDIs and attracting foreign investment, and also changing the mindset in the way we’re interacting in the European councils, in the line councils. Because we have to be more active than before. We have to fight for what, in the topics we have arguments and we have a lot of things in which, a lot of topics, a lot of councils in which projects in which Romania is very much involved and has to fight for them in a different manner, presenting arguments.

And I think this change in attitude will be reflected also in the way in which economic growth will be projected in the years to come. That’s why I said I’m optimistic about next year because if we’re securing the funds we have, if we do our job in attracting investment, then the potential is there. Romania has huge potential. It’s very important for stability, it’s very important for the growth in Eastern Europe. It’s a pillar in Southeast Europe. And basically it has to take up this leadership mission in being the pillar of Southeastern Europe. And that means growing economic champions that will be active in the region, not only in Romania and taking the leadership also in the councils in Brussels, making alliances in order to put on the map, on the global map important projects like the one I mentioned earlier, and Jan also mentioned. It’s the energy pipe, which is very important not only for economy, but also for security.

And it’s not the only one. We have Neptune Deep, which will be gas resource starting 2027, which means we will be one of the main providers of gas in Europe, which is a huge chance for the petrochemical industry in which we have a lot of deficiencies in the trade balance. So we’re looking forward for petrochemical companies from the US to come and invest in Romania because we have the gas there. So it’s an opportunity, and this is only one example, but okay, 100 days are over. We are looking at 2026 now. So we’re projecting, we’re looking optimistic about the numbers in 2026. We will match a real authentic consolidation because we’re aiming to have a deficit of around six percent in 2026 and restart growth because the potential is there.

Luke Coffey:

And Governor, turning to Moldova, you have the opportunities afforded to your country by your people when they elected a pro-Euro-Atlantic, EU integrationist government. But you also have challenges. The Russian hybrid warfare will not disappear simply because the elections were won by a pro-European party. The war in Ukraine continues despite efforts that are being made by President Trump to bring the fighting to an end. I guess my question is how do you balance the opportunities of EU membership and the reforms that you have to undergo, which will be difficult to get into the European Union against the war that’s raging in Ukraine, which intimately is linked to the future of your country directly and indirectly, while at the same time dealing with Russian misinformation and then trying to attract foreign investors. So how do you balance all of these different dynamics that are at play on Moldova right now?

Anca Dragu:

Well-

Luke Coffey:

From your view in the National Bank, how do you see this?

Anca Dragu:

As Minister Nazare said, all these challenges are also opportunities. So also our path towards EU was possible and accelerated after the start of the war. So we applied less than two weeks after the aggression war of Russia and Ukraine, we submitted the application to become a EU member and then everything started. So by mid 2022, end of 22, there were decisions of different bodies at the level of the EU. And in December 2023, it was the decision of the council saying that, yes, Moldova, you can start this journey. So we started to have the bilateral screening, which we completed this summer successfully. We had very good feedback from the commission on all chapters that we’ve been through during this bilateral screening. And we are waiting now to open negotiations and our aim is to finalize negotiations by 2028. We proved to be successful in dealing with illicit cash flows and we strengthen our powers and institutions and practices on AML/CFT.

As a consequence, we had this evaluation from European Commission, for example, and said, okay, Moldova is in line with EU regulation practice on AML/CFT, therefore we became member of SEPA, of Single Payment Euro Area. So we also try to have a proactive attitude, and you see all this hybrid war and illicit cash flows forced us to become more agile in reacting and not to be defensive, but also to have a more active attitude. From the central bank, what we can do to have a country more attracting capital and investments is first of all to make sure that financial stability is there. First of all, price stability. That’s our mandate. Then we are looking at financial stability, which is also in our mandate. And as supervisors of the banking sector, of non-bank financial institutions and insurance market, we make sure that all these markets are solid and sound.

And just for example, recently we have new investments from an important Austrian insurance company buying the third-largest insurance company in Moldova. So that’s a very positive sign. And this transaction started before elections. So it’s not like they waited for elections. It was really clear the path of the country. What else we do for making the country more interesting? I said on several occasions, that Moldova could be this wonder kid of European Union. We were maybe not so much known for Europe like other countries, but we came at the table of discussions well-prepared, with very good teams, with very good cases, with commitment. And yeah, the feedback is positive on this side from the commission. On the side of investors, we are happy to see increasing interest despite all these difficulties. Yes, we are a country neighboring the war and not NATO, not EU member, which makes our lives more difficult. But I think investors identified the potential of the country and identified the commitment and the trajectory that we are already embarked for the last few years, so. Yeah.

Luke Coffey:

Thank you. Jan, you mentioned specifically US involvement, investment and energy infrastructure, specifically the Interconnector pipe going from Greece on through to Romania and presumably Moldova. We know that sometimes all it takes to inject some life into these projects is a political declaration from the White House. We saw this in the 90s with Baku-Tbilisi-Ceyhan with Bill Clinton. We saw this also later on with Southern Gas Corridor where the US sort of gave the seal of approval for these projects. And I think that encouraged investors to get involved.

And we also know that President Trump, if he likes anything, he likes a deal. So you talked about the region needs to market itself to outside investors, and presumably you also mean to the White House, but beyond that, what can be done to get the President’s attention, the attention of US investors in the region? Are there any useful platforms that could be utilized? Should a new regional platform be created? We know that President Trump does have an interest in the region because of his involvement in the early days of Three Seas Initiative. So what specifically can be done? What’s your message to American policymakers that might be watching?

Jan Ruzicka:

Simplify. That’s the most important thing.

Luke Coffey:

Okay, well, we won’t be able to do. No.

Jan Ruzicka:

No. So just think. So we as a company, we are members of Three Seas for, I don’t know, ages. So this year it was Russia, 1000 people, great.

Luke Coffey:

Yeah.

Jan Ruzicka:

Results, nothing. Another conference, another debate. So it needs to be simplified. At the end, it’s not about political declarations, it’s about 10 Southeast European companies, 10 American companies coming together with credible projects. That’s the key. Not going for local development banks because different, this was the first Three Seas fund 2019, like trying to harmonize approach of 10 development banks when at the end these banks are political. Every country is in different part of election cycle, different political affiliation. This is, I think, wrong. At the end, it’s about art of the deal. So let’s bring, okay, when we are talking about corridor, let’s bring three largest energy company of Southeast Europe, let’s bring three Americans. Let’s create very simple one pager, this is what we want to do. This is how we want to do. Then let’s go to DFC, let’s go to EXIM Bank and let’s start to execute. That this is how he will be interested because at the end art of the deal, we are in era of geo economics. It needs to be something that will fit into message books.

Luke Coffey:

Yeah.

Jan Ruzicka:

Declaration of European political community, you cannot tweet them. This is what it is. So basically we need to get White House interested by credible project that are yes, flashy and I don’t have a problem with it. So it needs to be a large project, it needs to be, we need to work on the ground as a businessman and as a local government. In this case, logically, Mitsotakis, Rosen Zhelyazkov in Bulgaria, Maia Sandu and Prime Minister Bolojan.

You don’t need the whole Three Seas for this kind of project, just for countries. Still to harmonize approach of four countries, it’s not super easy, but it’s definitely easier than, I don’t know, 15 countries of Three Seas creating some fund number two. So I would simplify and I would go here actively and ask the FC exam and American investors and American banks that are interested in a region, especially for example, Bank of America and Morgan Stanley that are very active. Hey, how you would like to do it? Because we always start with declarations and then we complicate our life immensely. So we shall go from end, what’s possible, and then work from end to the beginning.

Luke Coffey:

Those are great points. I hope they’re taken on board here in Washington, especially the simplicity aspect of it. Yes.

Jan Ruzicka:

One more thing, and this is what I’ve been telling our friends at US embassies across the region for a while, American investments shouldn’t be only Westinghouse, Bechtel, Westinghouse, Bechtel and Lockheed Martin. They are important, but we need similar like Poland, successfully done it. If you go to MGM Warsaw, you will find Apollo, Advent, Blackrock, Blackstone. So big funding, big money. If you drug them on the ground, then they will start project themselves. If we try to do big tenders, we just survive tender of nuclear power plant in Czech Republic, endless problems, but let’s bring money on the ground and then money will sort it out in capitalist way itself. Poland done it. Let’s do it in a SEE. With difference of Poland, because Poland is 40 million market itself plus proximity to Ukraine and Baltics. I think that we really need to come together because otherwise it’s subscale again for American investors.

Luke Coffey:

Yeah, no, absolutely. If you have a question, raise your hand, catch my eye. We do have a microphone. Have a think now. But before we do, I want to go back to you Minister. We know one of President Trump’s big initiatives is getting Europeans to spend more on defense. And we had very successful NATO summit with the new five percent commitment, five percent GDP by I think 2034. This is a great start, builds on the existing two percent of GDP benchmark. But one thing I’ve been advocating for years is that finance ministers should have a seat at the table at NATO summits. I think in parliamentary democracies, hear me out, in parliamentary democracies, you’ll be too modest to admit this, but it’s the finance ministers along with the prime minister that control the purse strings. It’s not the defense minister, it’s not even the foreign minister.

And if you want to have a serious debate, and I learned this from my time working for five years in the House of Commons, how important the Chancellor of the Exchequer is in the funding of the government. If you want to have a serious debate about spending more on defense in Europe, you have to get the finance ministers involved. They have to have a stake. So what is your just general view on what role finance ministers could have in this discussion about defense spending inside the alliance and how are you viewing this from a national level in Romania?

Alexandru Nazare:

I start with a story about SAFE.

Luke Coffey:

Okay.

Alexandru Nazare:

The European program. It’s been negotiated, talks about SAFE. We’ve been requesting the total allocation, but when the decision was taken, we had 48 hours of negotiations with ECFIN in Brussels on SAFE. And we had to get the interior minister people with the defense people together with transport and infrastructure and ministry of finance in one room together. And we had two days of talks about mixing the nature of projects with the trajectory that we have until 2030. In order to convince ECFIN that we’re on the right track and we’re going to be fine with our fiscal trajectory, we will use this very good loan, but this loan, we will not affect the fiscal sustainability of Romania. So yes, it’s very important to have, let’s say on the same line, the defense minister, finance minister, and prime minister on this. To answer, it’s not going to be easy, but we are aware of the fact that we need to increase the defense spending.

What I would like to see, I would like to see more investment into the industry. So I would like to see more industry in Romania, more joint ventures of local and foreign defense industry working together to produce things that are needed now because this would also boost our economy. It will also boost jobs. So my focus on this is especially on strengthening or supporting new defense industry in Romania. And I think we have the specialties, we have a history, we have a tradition. So we have enough ingredients to use these opportunities that we have now to build a strong defense industry in Romania. And just to conclude, of course, we will keep our commitments and of course we’re going to increase the allocation, but it’s not only the allocation itself as a percentage, it’s also the quality of the allocation and the way and the types of things for which we spend money on defense.

Luke Coffey:

And Romania has been a leader in this. I should state up front so everyone is aware of this. So will I see you at the next NATO summit in Ankara? Okay. Do we have any questions from the audience? Yes, the lady here in the second row in the middle, please state your name and any relevant affiliation and a short question please. Thank you.

Anna Harvey:

Sure. Hi, my name is Anna Harvey and I am a research fellow at the American Foreign Policy Council and a former Fulbrighter to Moldova. Spent quite a bit of time in Romania as well, so I’m very excited to be here. And I think that I have a bit of a unique perspective on the region having lived there and spent quite a bit of time there. But I know that generally people don’t know a lot about the region. I got questions about being in the Maldives, for example, when I came back. So I’m just wondering what do US companies and then also the public in general get wrong about Moldova and Romania and what do they need to know in order to increase collaboration between our country and your countries?

Luke Coffey:

Are you sure you didn’t misread your Fulbrighter and you were supposed to go to the Maldives, but you ended up in Moldova?

Anna Harvey:

I wish that were true because I was there in 2022 when we were having a lot of power outages, so it was very cold. I would’ve preferred to be a little warmer, but.

Luke Coffey:

Very historic and interesting time for you to have spent time there. Governor, I think that might be a question for you.

Anca Dragu:

Okay. Yeah. I’ve never been to Maldives, but I will. Well, I think we have, as I said before, as we offer all this very friendly environment for investors, digitalized economy and very low administrative burden. But we have to show this to the world. We do have an agency for promoting investments where we have, it’s run by a great lady and yeah, you were colleagues.

Jan Ruzicka:

My former colleague.

Anca Dragu:

And she succeeded too. She travels around the world and she’s talking about the country. She’s successful in getting people in the country. We have recent, okay, I will not say names of companies, but okay, we have different recent important investors as a result of the activity of this agency. But in general, I think we are very active. If you watch me on my social media accounts, I’m traveling a lot. And why? Because we have to be present. We have to tell the people about us. Look, this is who we are, Moldova. We are a very ambitious country and we want to implement reforms. We want to grow, we want to become EU member on a fast track.

Luke Coffey:

Right. I think that does it for time. I’ll open it up if anyone wants to make any last remarks before we wrap up or we’ll continue on with the second panel. So please join me in thanking our panelists. And if you’re here, please stay seated. We’re going to turn this over quickly and if you’re watching online at home or in your office, just hang tight and we’ll get the second panel going right away. Thank you for joining us.

Peter Rough:

Great. Well good afternoon. Welcome back to Hudson Institute. My name is Peter Rough and I work on European issues here at Hudson. I was joking earlier to one of our panelists that the format today is a little bit like a congressional hearing where you start off with the ministers and now you have the experts coming in behind them. And I’m delighted to be joined by three great experts on what is loosely titled, The Geopolitics of Southeastern Europe. But as we’ll quickly discover economics is never far away, and I’m delighted to welcome I think for the first time onto the stage under the klieg lights, our former man in Bahrain, the Kingdom of Bahrain Ambassador, Justin Siberell from Bechtel. He oversees Bechtel’s regions, government relations, and corporate security organizations. From 2020 to 2024, he was running point on Europe, Middle East, and Africa operations for Bechtel. And as I mentioned, he is a long-time hand of diplomacy of foreign service officer by training. It’s a real delight to have you here. Thank you, Mr. Ambassador.

Justin Siberell:

Thank you.

Peter Rough:

It’s great to see you.

Justin Siberell:

My pleasure. Thank you.

Peter Rough:

We’re joined virtually from I think the suburbs of Atlanta by Phil Kosnett, who is also an ambassador. He represented the United States for many years in many different capacities, including as ambassador. Most relevant for this discussion to Kosovo and is a fellow at one of our friendly fellow think tanks here in town, the Center for European Policy Analysis. He’s also done work for NDU amongst others, and you can find his biography online as well, including at the link to this page on our site at Hudson.org. And last, but surely not least, my partner in crime here at Hudson and the Europe Center, Luke Coffey, who’s a senior fellow and joined us from the Heritage Foundation where he previously directed the Margaret Thatcher Center.

Luke Coffey:

Allison Center.

Peter Rough:

I have that wrong. The Allison Center.

Luke Coffey:

I was Margaret Thatcher fellow.

Peter Rough:

As it spilled out of my mouth, I knew I’d gotten that wrong, but that’s in part because he also worked in the British system, which is probably what spawned the thought about Thatcher. Luke, thanks for being up here. And I thought I would start with the view from industry on southeastern Europe and the geopolitics, geoeconomics of the industry as seen through the eyes of Bechtel. So Mr. Ambassador, perhaps I’ll just give you a few opening minutes to take this wherever you like it, and then we’ll have a follow-on discussion thereafter.

Justin Siberell:

Sure, my pleasure and very happy to be here with you today. I’ll just as a matter of introduction, say that with my colleague Phil Kosnett and a former ambassador, both of us speaking on a business panel, I think we’re stretching the definition of expert, but we’ll do our, at least certainly in my case, I’ll do my best. Maybe just a very brief introduction to Bechtel so people know kind of the perspective I’m reflecting. Bechtel is an engineering and construction company based here in United States. 127 years in operation. We operate globally across five major business lines. That’s infrastructure, energy, mining, security and defense, and then advanced manufacturing, things like AI, data centers and chip fabs, we’re a mega project delivery company. And so we take on very, very large projects. And when we find ourselves in regions like Southeast Europe, it’s typically because the local contractor base may not have the capacity to carry out large, large projects. There’s plenty of capacity to take on smaller construction projects, and indeed we work in close partnership with local construction companies wherever we operate. But typically when Bechtel comes in, it’s because there’s a large task that needs to be addressed either by industry or governments, and that’s why we are brought in. With regard to this part of the world, I mean, I would say it’s been a very, very good market for Bechtel. We’ve enjoyed about three decades of work in particular in the Western Balkans. And the countries are motivated by a desire for closer economic integration subregionally, and that’s both in trade and transport linkages.

So we build roads, that’s one of our major projects in the region, but also in energy infrastructure. And there’s a greater importance being attached to energy security, energy availability, and diversification. So that’s creating opportunities for pipeline networks for obviously for LNG terminals, for electricity distribution, those kinds of projects that we also have capability. And so over the past few decades, of course the imperative has largely been driven by these countries desire, at least in the Balkans, in case of the Balkans, non-EU Europe desire to become qualified to participate in the EU accession process. And that’s driven a lot of the spending, a lot of the determination to build out their infrastructure.

But even as the accession process has been frustrated or slowed in a number of the countries, I think there’s a general acceptance that the projects have a benefit in and of themselves. So countries are moving forward almost irrespective of the status they may have at one time or another in the EU accession discussions. And I think you see initiatives like the Open Balkans initiative that reflects that, maybe even the Three Seas initiative, which is, of course, different and it’s really part of the EU, but it reflects a determination of countries at a sub-regional level to take development into their own hands and pursue a vision for development that creates opportunities for a company like ours.

Another driver has been the accession of a number of countries in the region to NATO and the importance of developing new NATO corridors. One in particular worth mentioning is Corridor Eight, which begins at the Albanian port of Durres and then ends up in Burgas in Bulgaria. And if you think of what’s happened in the last couple of years with the Russian invasion of Ukraine and the need to have mobility for NATO to reach eastern frontier, that becomes a very, very important corridor. So that’s also beginning to drive development plans and decisions. And I think on the last panel we had a finance minister, and the question was about whether finance ministers should be involved in NATO planning. And it’s a very relevant question. I agree with what was reflected in that, because putting assets to these sorts of strategic development is very important.

It’s a driver, again, of some of our work in the region. I’d say that currently, Bechtel, just for context, we’re involved in a couple projects in the region. We have a major motorway underway in Serbia called the Morava Corridor. It’s an east-west highway, about 4,000 workers on that project. Currently, it’s one of the largest infrastructure projects in Serbia. We also have another large motorway project underway in North Macedonia, and part of that is along Corridor Eight, which is south of Gostivar, into the mountains on the way to Lake Ohrid, which will comprise part of that essential Corridor Eight route. So very challenging topography. And this is again where governments look to a company like Bechtel to come in and assist them with a large-scale infrastructure project. The governments are committed, I would say, to strengthening their commercial ties with the United States in particular, so that helps a company like ours, an American company.

Obviously there’s challenges, and so far there’s change. I wouldn’t call it political instability so much as almost the certainty of political change in the region. These are democracies, and they do flip from one government to the next. So the projects that we undertake, these are long multi-year projects where you really need to have continuity of vision and commitment. So when we are brought in by a government to look at a particular project, we want to ensure that that project has broad support within the society so that if there is a change in government, and that does happen by the way, in a number of the countries where we work, there is a continuity to the support for the project, particularly when we’re talking about government funding. And where we don’t have that continuity of support, we can run into serious problems as a contractor.

So just to wrap up, the ingredients for success from our perspective, again, this is the contractor perspective on building large-scale infrastructure things, obviously it starts with unmet infrastructure needs and a local contractor base that’s present to assist, but maybe lacks the capability to take on those big projects where they require our specialized skills, a desire to work with the United States and to strengthen the commercial links to the United States, and then as I say that continuity of priorities.

The challenges, now there are a number of challenges, and we can talk maybe more about those as well, is there’s often a flawed development model in my personal view where projects are often sliced up into tiny lots, maybe as a way to involve the local contractor base. But what that means is very uneven inefficient development. Sometimes these are unfortunately at the advice of consultants and international development agencies. And the way that they structure, particularly the development agencies, their funding at the front end of a project on a feasibility study, let’s say, they define the project by the way they parcel out money to governments, and then that influences the thinking that governments bring to the implementation of a project, and then it becomes a little bit too late for a company like ours to get involved in a helpful way.

I mentioned political stability. Again, if you have governments that change and then disagree on the priorities, that’s a bad place to be for a contracting company. Workforce availability is a serious issue in the region. You have a lot of outward migration, and so the working age population is often difficult to find. And the projects we undertake, construction projects, require relatively young population to take on these jobs. And so that’s sometimes a challenge. And then to attract workers back is very much possible, but governments also have to take the right steps to make the work environment attractive.

So if someone has left Macedonia to go to Germany to take a job, to attract them back to Macedonia, where they want to be working by the way, they want to be near their families, the government needs to look at things like the labor laws that might restrict you to a 40-hour work week as an example. And why would someone return from Germany to North Macedonia if they can only work 40 hours and they can’t make the money that they would equal or come close to perhaps what they’re making outside of the region? Of course there’s corruption risk, that’s a major one. And I think that’s one of the reasons that countries like to bring in a company like Bechtel because we operate with integrity and ethics, and we have very strong values in that regard.

And of course, we’re also subject to things like the FCPA and other laws that ensure that we carry out our projects in a completely above board way with integrity and honesty. And I think governments like that. They want that kind of partner, of course, in their major projects. And then the final thing I’ll say is there’s also, I would say, unfair competition from some state-backed parties. Projects that come under the attention of the China Belt and Road is a good example where basically you’re not competing against individual contracts, you’re competing against a machine that involves a whole range of tools that are brought to bear that a private company like ours simply has a hard time competing against, although we have a better value proposition in the end. So that’s the early view from the contractor perspective.

Peter Rough:

Thank you. And that’s already with your description of Corridor Eight shows how expansive southeastern Europe really is from the Balkans all the way over to the Black Sea Coast, potentially all the way up even to Odessa, as Luke mentioned earlier before the panel began, given how connected that part of Ukraine is with southeastern European economy. But if we began with the diplomat turned businessman, let’s go to the diplomat turned think tanker at CEPA, Ambassador Kosnett, perhaps we could get some opening thoughts from you I believe piped in from Atlanta.

Ambassador Philip Kosnett (Ret.):

Thank you very much. And I’d like to say what a pleasure it is to be at Hudson if virtually, and to thank my old friend Justin Siberell, for giving me cover to talk about security rather than economic issues. So let me open with some thoughts on where we are and where we’re going on transatlantic security, because I think that that is highly relevant to the situation in Southeast Europe. Many of you here today will be familiar with the phrase dating back to the early days of NATO, that the organization was created to keep the Americans in, the Russians out and the Germans down to ensure European security. And that was successful all through the Cold War and beyond. Over the last decade though, I think that there has been considerable focus on the question of how to keep the Americans in with governments and analysts debating whether Europe should focus on addressing mollifying isolationist sentiment in the US or on charting a course towards an independent European defense structure.

So let me start with four points. First, in the long run, the steps that Europe needs to ensure its own defense, everything from rebuilding European militaries to ensuring energy independence are largely the same whether or not America does turn away from Europe. There’s no going back to the post 1991 period where many European countries allowed their security forces to atrophy. I think some NATO members understood that early on, they got the message in 2014 with the initial Russian invasion of Ukraine that Europe needed to do more to ensure its own defense. I mean, I’ll name check the Baltic states; Poland, Romania, Bulgaria. Some other European states have been much slower to turn promises into action. Second, I would counsel against despair that the U.S is on the verge of abandoning support for European security. Now, in theory, the Trump administration seeks to reorient American security planning and force structure towards the Western Hemisphere and towards Asia Pacific and to move away from its support for security in Europe and the Middle East.

In practice, while I would say the Trump administration’s defense and security policies have been controversial, they have not been purely isolationist. His actions in a second presidency have not reflected the discussion early on that the U.S would simply abandon Europe and the Middle East. And if you doubt that, you might ask Hamas and the Iranians how American disengagement from the Middle East is proceeding. Third, Trump has long believed, this goes back decades, and he’s encouraged his supporters to believe that America’s allies have taken advantage of American goodwill, have taken advantage of the security and economic structures and policies that the U.S did much to institute. Now whether or not you believe that that is a fair criticism of our allies, I think it’s fair to say that the more that European countries do to contribute to their own defense, the more likely that the United States, even under the current administration, will remain heavily engaged in European security.

And finally, in that regard, I think we need a more nuanced debate in European capitals in Washington and in Ottawa, because I don’t want to talk about NATO without talking about our Canadian friends. We need a more nuanced debate about how to structure burden sharing and contributions to European security. Here, I think the frequently used metric that NATO has used for decades of measuring a country’s contribution to security by measuring its defense budget as a percentage of GDP does as much harm as it does good. It has some value in indicating what direction a country is going, but I think there are many ways to measure a country’s contribution to national security, to the common defense that cannot be captured very well by that metric. I have a lot more to say on all of these issues, but I will stop there. Thank you.

Peter Rough:

Thank you, Mr. Ambassador, and to back clean up, Luke Coffey, bring us home with your remarks.

Luke Coffey:

Thank you. You’re probably tired of hearing from me already since I was the moderator earlier, but I couldn’t pass up an opportunity to hear the sound of my own voice even more, so I assigned myself to be a speaker on the second panel. I want to break this down in two ways. I want to first talk about why this region of Southeastern Europe matters to the United States. Then I want to break it down even further to talk about what the challenges are in both of these regions, geopolitical challenges, not so much the economic side of things, which we’ve heard a lot of today. There are three reasons why Southeastern Europe matters. The first one is very straightforward, and it’s because Europe matters to the United States. Maybe Asia is the future. I don’t doubt it. I don’t know. But what I do know is that right now about half of the world’s GDP is between North America and Europe.

What I do know is that right now, 46 out of 50 states export more to Europe than they do to China. And when an American is building a product to be exported, that is a job. What I do know right now is that Europe is responsible for two-thirds of all foreign investment into the United States to a sum of about four trillion, with a T, dollars each year. So Europe matters. And history tells us, as I mentioned in the first panel, what happens in Southeastern Europe in the Balkans around the Black Sea, this region, often doesn’t stay in the region. It has second and third order effects across Europe, and in this case across the transatlantic community. So Southeastern Europe matters to the United States because Europe matters to the United States. The second reason is that the American family and the American taxpayer and thousands of American veterans have given a lot in the 1990s to make the Balkans specifically stable and secure.

We have invested billions of dollars since then. Thousands of US troops have rotated in and out. Some have paid the ultimate price. We still have troops today in Kosovo, and now is not the time to turn our back on a region that has so much potential and that we’ve already invested so much into. And then the third reason that Southeastern Europe is important is because adjacent to Southeastern Europe, or perhaps by some definitions including Southeastern Europe, lies the largest war that the region has seen since World War II. When I was putting together this panel and thinking about topics and speakers and whatnot, I was thinking, well, how would I define Southeastern Europe? And for me, my working definition is the Balkans, Bulgaria, Romania, Moldova, and at least Southwestern Ukraine, specifically Odessa. Economically, historically, in some cases, culturally, this region is intertwined and linked between the Odessa and the Adriatic.

And considering we’d be naive in the extreme to think that Russia’s invasion of Ukraine is not going to have any impact in the Balkans, for example. So these are the three reasons why this region matters to the United States. In terms of breaking this region down into two chunks that are more digestible. And then looking at the challenges that are out there, I view it as the Balkans and then the Black Sea littoral states. For the Balkans, this remains a region of unfinished business when it comes to Euro-Atlantic integration. It has a lot of overlapping memberships, some countries in the EU, some countries not in the EU, some in NATO, some not in NATO, some in both, some in neither. It seems like we’ve run out of steam in the Euro-Atlantic community or the transatlantic community to get some of these countries across the finish line.

And doing so would not only bring benefits in terms of security, but tying it back to the economics, it brings confidence to investors, for example. It brings confidence to companies that want to perhaps open a factory. If you are in NATO and you have that security guarantee, and you are a country in NATO, and you’re an investor looking at that country, you’ll feel more comfortable dumping in hundreds of millions or billions of dollars into that country if you think that region is secure. Same with the political stability. If you make the reforms that are required to eventually join the European Union and you’re a member of the EU, perhaps that’ll give investors more confidence to invest in your country, in your region. Some of the challenges in addition to this inability to see it through to get these remaining countries into NATO, into the EU, some of these additional challenges include outside meddling in the region.

In the case of the Balkans, the most obvious example is with Russia, where Russia uses the region generally, and I would say in many cases, Serbia specifically, to turn up the temperature against the West and the United States. And we shouldn’t give Russia more credit than it deserves here. I view, for example, Russia’s engagement with Serbia, and then Serbia’s engagement with Republica Srpska, which is the ethnically Serbian entity inside Bosnia and Herzegovina, I describe Russia’s ability to influence this region like a gas stove top. You can’t get the temperature precisely what you want it to be, but you know you can turn it up and you can turn it down. And when you turn it up, it takes a while to cool off after you turn it down. So this is what Russia’s able to do, and this causes a serious problem for us who want to engage with the region and see the region brought into the Euro-Atlantic community.

And then the other region, the sub-region inside Southeast Europe, I mentioned the Black Sea, so much potential, but right now, so much instability with the war going on. We heard from the Romanian finance minister the importance of the Port of Constanta and the importance of the Danube. He’s absolutely right. But just a few weeks ago, a Russian naval drone transited undetected 24 kilometers up the Danube River before destroying a Ukrainian naval ship. That’s not exactly conducive to commercial trade on the Danube. Yes, the Port of Constanta will be a key transport node in the middle corridor and has unlimited potential. But, again, when there’s a major war going on and drones are flying into NATO airspace and the main economic and logistics hub, Odessa is constantly under air bombardment and attack, this doesn’t help the broader region.

So if we want to get Southeastern Europe secure and stable, then we need to get Ukraine secure and stable, and that is how those issues are linked. So there’s no shortage of issues in the entree for government officials when it comes to this region. And I feel like it’s an area that we’ve overlooked over the years because there’s so many other bigger issues going on around the world, but it’s something we need to turn our attention back to.

Peter Rough:

Thanks, Luke. Let me go to some round of moderator’s questions, and I’ll start In the order that we began with you, Ambassador Siberell. You mentioned some of these projects that Bechtel’s very involved in in North Macedonia, Albania, Serbia, notably all non-EU member states, meaning presumably helping them on the pathway to EU member status, but I suppose that raised in my mind a question of, can you almost as a company achieve catastrophic success? Meaning once they cross that threshold, what are the barriers to entry for Bechtel, for EU member states if you’re trying to work business in these areas? How do you think about that? What are the distinguishing differences for Bechtel and business when you’re operating in the EU market versus non-EU market in Europe?

Justin Siberell:

Yeah. Well, we do operate in the EU. Currently, we’re constructing Poland’s first nuclear power plant on the Baltic Sea. That’s the Westinghouse AP 1000 technology, and then Bechtel is the constructor in that major, major project. So we do have operations, and we’ve worked elsewhere in the EU historically. I wouldn’t say we have significant presence across the continent. And part of that is because what I mentioned before, when you have a local contractor base that’s capable of carrying out large scale infrastructure, now nuclear construction in Poland is new in the country, and so it’s one that does require an outside party to help build up the local supply chain.

So things could change over time, but for the time being, we’re very happy to be working in the Balkans and helping with these development priorities. One thing I think that’s interesting to see now is the attention on energy integration with the construction of the gas vertical pipeline out of Alexandroupoli that will go into Bulgaria and Romania, but also has offshoot into North Macedonia. And then there’s a trans-Adriatic pipeline. There’s also an effort to connect into the Krk Terminal in Croatia to bring gas into the Balkans region as an alternative to Russian gas in some cases, but also to provide a general level of energy security, which has been lacking. And there again, there are opportunities for us. I guess to kind of get back to your question, I suppose there is a possibility, but I think it’s a little bit of a long way off for now. We’re helping, I think the partners that we work with kind of develop those capabilities. And in some economies it’s more likely than others, perhaps that you’ll have that development. There are very capable local contractors, and then some economies are of relative size. I mean, Serbia is a good sized economy. They’ve had good economic growth in the last several years. There’s an ambition there to development. That is, I think, creating the atmosphere in which investors will come in, companies will expand, and there’s real capability being developed. What they ultimately need is that kind of political stability. And long-term sort of certainty of orientation and development. Perhaps that will be very important. But yeah, I’m not sure that we’re ever going to be out of the market entirely, given that the thing that happens is once you’ve established credibility and understanding. They do keep coming back to us for advice, and we try to provide that in the various sectors where we work-

Peter Rough:

I guess my thought was more about EU regulatory tape than anything else, but perhaps- 

Justin Siberell:

Yeah, that’s a fair point. It’s a fair point, and that’s maybe one of the reasons that companies like ours don’t always find opportunity in EU proper. So it’s a fair point and yeah. We’ll know it when we see it kind of thing. And of course there have been predictions of the EU accession process, have not really been met. So when that happens, I will confront that.

Peter Rough:

Ambassador Kosnett. When we hone in on the political dynamics of the Balkans in particular, to take that subregion as Luke defined it within Southeastern Europe. We’ll have a splash of new stories when say the KFOR force turns over, or when there’s an anniversary of something like Dayton. But can you give us a lay of the land of where you see, this is an awful cliche, the sort of the Balkan tinderbox. But where you see some of the big political markers right now and challenges that we face, in the Balkans, and in the Western Balkans in particular?

Ambassador Philip Kosnett (Ret.):

Well, I do think that the tension between Serbia and Kosovo remains ever present. And kind of, as you say, we only hear about this in an episodic fashion. Usually when there’s been an outbreak of violence. I mean, for example, when Serbrioters attacked NATO KFOR troops a couple of years ago and put dozens of them in the hospital. Or when there was a fight between Belgrade-backed gunmen in Northern Kosovo, and the Kosovo Police that left a Kosovo policeman dead. The troubles are always simmering. When I was ambassador to Kosovo from 2018 to 2021. I often said that Kosovo’s biggest problem, and I think it’s Serbia’s biggest enemy also, is complacency. Most people in Kosovo, regardless of where they are on the political spectrum, felt and continue to feel. I think that because they are so pro-American. And the United States has long provided considerable economic assistance. As well as a security shield, that Kosovo really doesn’t have to take tough steps to try to improve its relations with Serbia.

I don’t consider myself an expert on Serbia. But I’ll tell you my impression is that, there is a tradition in Washington as well as in European capitals. That Serbia is an important regional power, and we need to indulge the Serbian government, lest we drive it into the arms of the Russians and the Chinese. Well, I think that Serbia is already nestled in the arms of Moscow and Beijing. So there isn’t a lot to be lost, by calling out the Serbs when they cause trouble in Bosnia, in Kosovo elsewhere. And this relates to the point Luke made earlier, about how it’s useful for Russia to stir the pot in the Balkans. I think to cause a distraction and a challenge to the rest of Europe. Okay. What is to be done about this? One thing that I think would be specific concrete, useful and difficult would be for the five EU member states that do not recognize Kosovo’s independence, to take a deep breath and do so.

That is Spain, Slovakia, Greece, Cyprus, Romania. For the most part, these countries have declined to recognize Kosovo as an independent country. Because there is some separatist settlement in their own countries’, separatist sentiment, and they don’t want to encourage that. I get that. I still think that it would be an enormous step towards peace, and stability in the Balkans for all EU member states to recognize Kosovo. For a long time the conventional wisdom with regard to the NATO KFOR, was that if the Americans pulled out of KFOR, that would spark a rush to the exit by European contributing nations.

I don’t think that’s true anymore. I think that since 2022, there has been an increasingly strong attitude throughout Europe that Europe needs to do more for its own security. And in the same way that the EU runs peacekeeping in Bosnia through EUFOR, I think that it would be possible, for Europe to handle KFOR security without the United States. Now, let me just underscore, I’m not calling for the US to pull out of KFOR. I think it is very valuable to Americans own security and economic interests in Europe. For the United States to remain an active participant in KFOR. But if the Trump administration were to pull out, I don’t think it would be the end of the world. And I think that it would be an opportunity, for our European allies to show even greater leadership, in security in the Balkans.

Peter Rough:

All right, thank you, Mr. Ambassador. We needed a headline for the event. So Ambassador Kosnett calls for the US pulling out of KFOR. This is the perfect tagline.

Ambassador Philip Kosnett (Ret.):

Yeah, that is what the newspapers in Kosovo will take away from it. How many outside offer.

Peter Rough:

Luke? It’s been a bit of a Romania week at Hudson. We had the Romanian foreign minister here on stage, just the other day. Today, mere an hour ago you had the Romanian finance minister. In between, we had some private meetings with senior Romanian defense officials. Talk to us a little bit about, what you alluded to at the end of your opening remarks. And that is the war in Ukraine’s implications for that part of Europe, Bulgaria, Romania, et cetera. What are the spillover costs? What are the effects which we’ll be looking at?

Luke Coffey:

Yeah, I think in the region, in the Black Sea chunk of south Southeastern Europe. I think the countries are in a state of anxiety to a certain extent. There are a lot of question marks. “What will happen in Ukraine? What will be the US role in bringing this fighting to an end? What will the security and stability of the Black Sea look like after this war ends? What role will Turkey play in all of this? What will the US force posture be in the region? Specifically Romania?” We know that there’s a review that, I mean it’s either done and it is being approved, or it’s still in the process of being finalized at the Department of War. I guess it’s now called, where they are examining America’s military footprint around the world. “What does this mean for Eastern Europe?” There are a lot of questions. And when you meet with not just Romanians, but any officials from the region. They are genuinely concerned which path are we all going?

And there’s more questions than there is clarity right now. And I don’t know if that’s necessarily . . .  In fact, I know it’s not by design. I don’t think that the Trump administration, is purposely keeping things ambiguous with our allies and partners in the region. I think this is just a consequence of a number of things. One, we have a new administration that’s defining itself, finding its feet, going through the process of new strategy documents. A new take on the old problems. We have a president who wants to be personally involved, with these high-level diplomatic initiatives like Russia’s invasion of Ukraine and bringing that to a peaceful conclusion.

So it is just difficult to know right now, where the US might stand on some of these issues. But I think the fundamentals remain solid. I think the US will continue to be in NATO, will continue to have some forces in Europe, will continue to be engaged. Despite what some critics claim about Europe being yesterday’s business, or is a problem for the Europeans. At the end of the day, for the reasons I outlined in the beginning of this session, the economic reasons Europe is simply too important, for the United States to not be involved. So these conversations, I understand where our partners and allies are coming from. And hopefully in the coming months there will be some clarity one way or the other.

Peter Rough:

And I like that statistic you mentioned earlier, of I think it was 46 out of 50 states.

Luke Coffey:

That’s right. Yeah.

Peter Rough:

Trade more with Europe than they do with China.

Luke Coffey:

And if you’re from the Heartland, I look at these figures. If you’re from the Midwest, I’m from Missouri, you’re from Iowa, Oklahoma, Kentucky, Arkansas, these states often times export four or five times more to Europe than they do to China, for example. So this isn’t some like a Silk Road corridor, beltway view of the world. This matters to Americans across the country.

Peter Rough:

Ambassador Siberell you’ve presumably sent people scurrying on their computers, to look up some of these names that you mentioned. And where these corridors are because it is a complex geography, and Bechtel’s doing extraordinary work. You mentioned the East-West corridor in Serbia, et cetera, et cetera. But I’d like to get back to some of these challenges you mentioned because you laid them out very neatly. And I thought clinically from workforce development, to the parceling out of contracts to political stability, could you weigh those a little bit? I mean, what is it that you think, God, this is essentially not a non-issue. But were basically there or other areas that you think, well, this is really what occupies my time in taking that next step, in our own business there?

Justin Siberell:

Yeah, it’s a little hard to weight them individually. It’s a collective challenge. Maybe I’ll put it this way. The kind of projects we undertake are, like I said, of a level of complexity, and scale that you need to make a major investment. Even as the contractor to bring in the people, the equipment, the processes to carry this project out. And it only makes sense if you can forgive the language, but if you can attack the problem in a very aggressive way and move quickly to conclusion. So we’re not interested in being kind of mired down in a long-term, slow-moving project. We want to take on a project and move as fast as we can. And the challenge to things like this gets a little bit, I hope it’s not boring, it’s certainly exciting to us. But linear infrastructure, when you’re talking about states in the Balkans region.

Land title and expropriation becomes very challenging. You have in some societies, you’ve had initiatives to decentralize decision-making down to the village level. Perhaps for ethnic representation purposes. So that when the national government decides to take on, a major infrastructure project that crosses through these areas. And applies expropriation rules, you have to rely on the local cadaster or the local officials to pull up the land titles and who owns this and what’s a government parcel, what’s a private parcel? And it’s a very cumbersome, challenging process.

So what we typically will do is if a government, let’s say, comes to us and says, we’d like to develop this rail corridor road corridor. We will tell them. “Okay, well here’s what you’ll need to do. This is the kind of thing you’ll need to think about. You might need to think about amendments to your forestry law, to ensure that you can actually come in and cut down the trees in that area. You might need a change in your mining law, to ensure that you can open up this area for quarries to bring material for the project. You might need to change your labor law, to ensure that your workforce will come back to work on this project from somewhere in the EU.”

And there may be a list of six or seven or eight different requirements for us even to be interested. And then the counterpart government either says, “Okay, this is important enough and we’re going to amend our laws or amend our procedures to meet those requirements. Or no, thanks. That’s too difficult, too difficult for us politically.” And we’ve seen both, by the way. Interesting. Yeah. So that’s the kind of thing, and this is where I think the involvement of international companies. And I would say it’s particularly international, know American companies in the region is really important in this way. Because these are still developing economies.

They need to learn. They need their government practices to meet their economic development objectives. And we can help them. Therefore, so once they’ve learned from us, they can take that practice and apply it to other things. So I hope that answers your question a little bit. And I wanted to come back to something you said a minute ago, about the non-EU and then EU, and is that a catastrophic success you move in? I think it is fair to Serbians . . .  It’s a rather obvious thing to say that, a company like ours benefits from the fact that these countries value a particular relationship with the United States. As symbolized in some cases through engagement, with a large American company. So there’s no secret to that. We compete like everybody else. We have to make a strong value proposition. Where these are often public infrastructure projects. They’re subject to local community views and opinions.

So this has to be right for the country. It has to bring value to the country, and we have to do things in the right way. But we probably aren’t part of the conversation, if it weren’t for the continued involvement of the United States government. So the extent that the U.S sort of steps back from the region, or doesn’t have an interest, or the countries no longer care about that close partnership with the United States. Yeah, I think that probably impacts a country like ours. And sure if they all become members of the EU, and then there’s just a less attention perhaps to maybe to that relationship. I don’t know if that changes, but that could become a-

Peter Rough:

Saw what the Finns and Swedes thought of the EU security guarantee after the full-scale elevation. They wanted to shelter behind the NATO shield very quickly. Sure, absolutely. I would hope that red, white and blue is still top.

Justin Siberell:

I hope so too. I think is quite genuine. And I mean, Serbia was brought up earlier, and not to differ with my friend and colleague, Phil. I mean, from what we see, the Serbian government’s very interested in that relationship with the United States. Very interested in having companies like ours operate there. I do think they want balance. They don’t want to rely on one or another particular partner. So that’s been certainly to our benefit.

Peter Rough:

Thanks, ambassador Kosnett. Let’s go back to, you began with sort of tour force, of the transatlantic security architecture and made four points. If I could ask you to apply your security lens, specifically to the broader southeastern European region. You’ve covered the Balkans. Maybe you could talk a little bit about the other players, the other NATO allies in particular in that region, and how you see them fitting into the grand strategy of the U.S.

Ambassador Philip Kosnett (Ret.):

So before I do that, let me comment on something Justin said. I think that the U.S has a hugely important role to play in trade and investment, throughout Southeast Europe. I think that the dismemberment of the agency for International Development was a mistake. But it probably also sent a strong message to Kosovo, and other aid recipients. That they need to get more serious, about attracting investment and boosting their trade with the United States, and also with other countries in Europe. And the U.S government has other tools, other agencies such as the International Development Finance Corporation, the Millennium Challenge Corporation, that are more focused on trade and investment, less on aid. That have played an important role in the Balkans, and I think will continue to. As will American business. One of the largest American business deals with Kosovo, was the construction of a highway connecting Kosovo to North Macedonia and opening up trade to Greece and beyond.

That was built a few years ago, in conjunction with the Turkish construction giant Enka. So I think there are a lot of opportunities for multinational economic investment throughout the region. Now to turn back to defense cooperation. I think that there’s real opportunity for NATO, for European Union countries, to continue to make clear to countries that do seek instability in the region, that they won’t permit that. And I think that KFOR and EUFOR still have a role to play moving farther east. Looking at countries like Bulgaria and Romania that have become increasingly vital. Allies of NATO in the Black Sea region and beyond. I want to turn back to my point about how to measure defense contributions to the alliance. There are countries, Romania is one of them. Iceland is another that have provided critical basing infrastructure for NATO. There are countries that probably don’t need to be focusing on building more infantry battalions. And more fighter squadrons, but have a great deal of history in defense, industrialization. Countries like Belgium, Czechia that probably could focus more on their contribution, in those sectors than in just trying to build up their own forces.

I think in the first panel today, our European colleagues talk briefly about cybersecurity, technological development. These are all areas where every country in the alliance could play a role, that cannot be measured purely by looking at what their percentage of GDP, is used to build up military forces. One other point I would make there, and I think this applies to countries in the Southeast as well to Western European allies. Is that passing a defense budget that calls for an increase in defense spending, is only the first step in building a more capable military. You need still to procure equipment, you need to either conscript or recruit a force. You need to train it. And frankly, you need to give that military experience. And I think that it is very convenient for journalists, for politicians and others, to score defense cooperation as if it is a football match. By looking at what the numbers in the budget are. And I think we need to look well beyond that.

Peter Rough:

Well, with that nice rousing ending, a nice recommendation. I think we should call it a day for our second panel. I want to echo Luke’s comment at the opening of the first panel. And thank the PPF group once again for their generous support of Hudson Institute. I’d like to thank Ambassador Kosnett , Ambassador Siberell soon to be Ambassador Coffey, I’m sure for joining me on stage here today. And for those of you watching at home, please stay with Hudson.org for all of our work, our offerings, our writing, our media appearances, and our panels here at Hudson. Thanks so much and we’ll see you next time. Thank you.