The market seems to want to ignore all the risks likely to thwart its current optimism. Yet they are numerous, often blatant and systemic. One of them is growing in the shadow of the Ukrainian conflict.

After the fall of the Ottoman Empire, the Balkans have long been synonymous with political and ethnic volatility. Since last summer, tensions have escalated after the government in Pristina imposed on Serbs living in the country that they must adopt the same identity cards and local license plates as the ethnic Albanian majority. Is it a serious issue? Yet a diplomat in Belgrade, who requested anonymity, said it was shocking to see Europe flirting with a second conflict on its doorstep. Another diplomat based in Kosovo’s capital Pristina said the barricades that followed the announcement had echoes of Croatia and Serbia descending into war in 1990. Serbian President Aleksandar Vucic, a supporter of President Putin, accused in the past of fanning the flames in Kosovo, had to intervene at the end of December to calm the spirits as the inhabitants of northern Kosovo blocked the roads and clashed with the Kosovo police.

Bosnia Herzegovina remains paralyzed, given the tripartite government born of the 1995 peace agreement, and Putin’s ally, who leads the Serbian entity, continues to threaten to secede. Montenegro, which joined NATO in 2017, is now considered a hybrid regime by Freedom House, a Washington-based democracy watchdog. Albanians are again leaving their country en masse because they are persecuted. Serbia sees Kosovo as the cradle of its nation, much like Putin sees Ukraine. Friction between Kosovo’s ethnic Albanian majority and some 100,000 Serbs (1.8 million inhabitants of Kosovo) who live in the north of the country is a daily occurrence. Around 3,800 NATO troops stationed in Kosovo are still needed to maintain an increasingly tenuous peace. Reconciliation reached an impasse in 2008 when the Pristina government unilaterally declared independence. The creation of the nation-state had not been supported by five EU members, Serbia, Russia, and China.

Leaders also run countries with very contradictory political backgrounds. Aleksandar Vucic, 52, Milosevic’s former information minister, cemented his position in Serbia with a landslide election victory last year. He skillfully balanced Serbia’s competing interests, keeping one foot in the EU path while keeping the door open to Russia. Vucic denounced Putin’s invasion but refused to join the EU sanctions effort, and his government in Belgrade maintained ties with Russia. 
Albin Kurti, 47, a left-wing radical once a political prisoner in Serbia, opposed the existing agreement between the EU, Kosovo, and Serbia since 2013. He has given priority to asserting the sovereignty of Kosovo.

The unhealed wounds of a conflict that Europeans never managed to end are about to resurface, opening a new front in Europe and the door to further divisions.