Are The Balkans About To Blow Up Again?

Are The Balkans About To Blow Up Again?
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After a few years of setbacks, European separatists are re-organized, re-energized, and marching across Europe’s fabric of nations. The far-right Sweden Democrats posted the biggest gains in Sweden’s September 9 election. Support for Germany’s far-right AfD party is at an all-time high. And separatists have steadily bumped up their election numbers in France, Denmark and Hungary as the social mood changes amid a growing migration backlash.

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The Balkans are another simmering hotspot of separatism that everyone should put on their radar.

According to a recent Bloomberg article, Playing With Fire in Europe’s Powder Keg as Balkan Tensions Rise, “Europe is sleepwalking toward another rupture in the Balkans,” with world leaders from Russia, Turkey and the U.S. jostling for power, and Balkan leaders “seeking to unpick ethnic and territorial agreements that have underpinned an anxious peace for two decades.”

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Unofficially backed by Moscow, Milorad Dodik, the leader of Republika Srpska, a Serb region of 1.2 million, has long-called for the secession of his region from Bosnia.

Dodik has toned down that demand ahead of the upcoming Bosnian elections on October 7, 2018, but his movement should be getting a big boost from an increasingly negative social mood, which impels impulses to secede and separate. The dour mood is reflected in the region’s declining stock markets.

Notice in our chart how the East Capital Balkan Fund, an actively managed fund which mainly invests in Romania, Croatia, Serbia, Turkey, Slovenia and Bulgaria, has struggled to retrace less than half of the decline from its 2007 peak.

From an Elliott wave perspective, the impending and likely already-ongoing decline should see the winds of social mood squarely at the separatists’ backs.



About Brian Whitmer
Brian Whitmer is chief analyst for Elliott Wave International’s European Financial Forecast.  His areas of interest include European equities, bonds and political developments, with an emphasis on the future of the European Union. He also authors the European stocks section of the firm’s Global Market Perspective. Whitmer completed his undergraduate degree in civil engineering from the University of Maryland and earned an MBA from Georgia Southern University. In a previous career, he served as a designer, planner and project manager for $100-million-plus civil and residential developments.

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Jacob Wolinsky is the founder of, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at) - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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