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Russia roiled by NATO’s newest member

NATO announced its first new member in six years, welcoming Montenegro into the fold — and subsequently sparking threats from Moscow.

In a joint press conference Wednesday, the organization's Secretary-General Jens Stoltenberg explained Montenegro would become the 29th member of the military alliance, saying that the country has proven that hard work towards reform "pays off."


Montenegro's Deputy Prime minister and Minister of Foreign Affairs Igor Luksic (L) and NATO Secretary General Jens Stoltenberg give a joint press conference at the NATO headquarters in Brussels on December 02, 2015.
JOHN THYS | AFP |Getty Images
Montenegro's Deputy Prime minister and Minister of Foreign Affairs Igor Luksic (L) and NATO Secretary General Jens Stoltenberg give a joint press conference at the NATO headquarters in Brussels on December 02, 2015.

It comes 16 years after NATO dropped bombs on Montenegro, which was still a part of the former Yugoslavia during the 1998 to 1999 Kosovo war.

Russia, which has opposed NATO expansion into the territory, is now threatening to cut ties with the Balkan state.

The former Yugoslavia historically had ties with the former Soviet Union, but was considered an independent socialist republic for much of the twentieth century.

The chairman of Russia's security and defense committee, Viktor Ozerov, told Russian news agency RIA Novosti that joint programs, including military cooperation, would likely be suspended and that Montenegro now poses a potential security threat.

The Russian parliament's vice-speaker, Nikolai Levichev, also warned that Russia might consider pulling investment from the country, RIA also reported.

Montenegro, though, may not be the last in the region to be embraced by NATO in the coming months, with Bosnia and Herzegovina, Georgia, and Macedonia all flagged for future membership.

About 32 percent of all registered companies in Montenegro have been set up by Russians, according to IHS Country Risk, most of which are tied up in real estate or luxury tourism.

"These statements are more serious than the actual actions can be," IHS Country Risk analyst Alex Kokcharov told CNBC in a phone interview.

"It's not a significant trading partner for Russia...and even the threat of divestment might be unfounded, given that much of the investment is done by Russian SMEs or private investors," he said.

And Russia is unlikely to place an outright ban on private capital flows, given that could expose a number of corrupt officials who often own property in Europe and elsewhere, Kokcharov explained.

Chris Weafer, a senior partner at Macro-Advisory, agreed that there's likely more bark than bite in Russia's threats.

"The move to admit Montenegro will, however, reinforce the Kremlin's suspicions about NATO and its paranoia about the west looking to squeeze and isolate Russia. It will harden Russia's stance against NATO even more," Weafer said.