Russia's influence in the Western Balkans has declined significantly since its invasion of Ukraine, but Moscow retains leverage over unresolved disputes in Bosnia and Kosovo as the region faces growing competition from the United States, China and other powers, the German Council on Foreign Relations (DGAP) said.

In a policy brief published on September 15, Nikola Xaviereff of the DGAP said the Western Balkans were entering a more fragmented geopolitical environment in which local governments increasingly pursue simultaneous relationships with major powers.

"Since 2022, Moscow’s role and influence have significantly diminished in the Western Balkans and, to a lesser extent, in Serbia," Xaviereff wrote.

Russia's war in Ukraine has reduced its capacity to shape events in the region, while countries including Serbia, Bosnia and Herzegovina and North Macedonia have begun diversifying energy supplies that previously gave Moscow leverage, the paper said.

All Western Balkan countries except Serbia have joined EU sanctions against Russia, while US sanctions on Serbia's Russian-owned oil company NIS have pushed Belgrade into negotiations over a possible sale of the Russian-held stake to Hungary's MOL, according to the analysis.

Moscow nevertheless retains important tools. Its seat on the UN Security Council allows it to support Serbia's opposition to Kosovo's international recognition and to influence the future of the EU-led peacekeeping mission in Bosnia, while Russian media outlets continue to operate in Serbia and Bosnia's Serb entity, the paper said.

The decline in Russian influence has coincided with a renewed push by the European Union to use enlargement as a geopolitical instrument following Russia's full-scale invasion of Ukraine.

The EU's more differentiated approach has accelerated the accession prospects of Montenegro and Albania, widening the gap with Serbia, Bosnia and Herzegovina, Kosovo and North Macedonia. Montenegro is aiming to conclude membership negotiations by early 2027, while Albania has received a positive interim rule-of-law assessment that could allow it to close its first negotiating chapters, the paper said.

But the faster progress of some countries is also creating new tensions, according to Xaviereff, including disputes involving Croatia and Serbia. He said the EU's enlargement process had failed to develop an effective mechanism for resolving bilateral disputes that can block accession.

The region's security environment remains unsettled despite a decline in the risk of interstate conflict over the past decade. Unresolved disputes and the use of ethnic issues continue to shape relations, while new defence cooperation between Croatia, Kosovo and Albania and Serbia's increased military spending could add to tensions.

"Rather than being treated as an autonomous regional actor, Serbia will have to accommodate external bargaining," Xaviereff wrote, particularly when its actions are seen as conflicting with European interests or regional stability.

The analysis also identifies a changing role for Washington. The United States, which played a central role in ending the Yugoslav wars and traditionally supported Euro-Atlantic integration, is pursuing a more commercially focused approach, linking geopolitical relationships to investment in areas such as energy, transport and artificial intelligence infrastructure.

"Washington’s rejection of liberalism in favor of commercial deals ... will challenge the EU’s liberal institutional transformation efforts," Xaviereff wrote.

He argued that the shift could make it harder for the EU to promote institutional reforms and could increase the scope for political leaders in the region to pursue transactional relationships with external powers.

Bosnia has already provided an example of the changing dynamics, the paper said. Republika Srpska leader Milorad Dodik sought to exploit changes in Washington's approach to press for the lifting of US sanctions and weaken the position of the international High Representative, while offering US companies potential access to infrastructure projects.

China, meanwhile, has expanded its economic presence, particularly through Serbia. Beijing has invested in transport, energy and telecommunications infrastructure and is seeking greater access to European markets through the region.

China and Serbia signed a partnership agreement in 2024 that included a free trade agreement, with bilateral trade now exceeding $11bn, making China Serbia's largest non-EU trading partner, according to the analysis. Serbia has also expanded military and security cooperation with China.

More than €1bn in new Chinese investment was agreed during Serbian President Aleksandar Vucic's visit to China in May 2026, the paper said.

The DGAP analysis said the EU remained the region's principal political and economic centre of gravity, but warned that Balkan governments were likely to become increasingly transactional in their dealings with outside powers.

"The Western Balkans may need to accept a novel form of peace that is coercive and deinstitutionalized," Xaviereff wrote.

The paper divides the six Western Balkan countries into two groups according to their progress towards EU membership: Montenegro and Albania as frontrunners, and Bosnia and Herzegovina, Kosovo, North Macedonia and Serbia as the remaining four.

It recommends that Germany and other EU states develop tailored accession arrangements for Bosnia and Kosovo, strengthen responses to hybrid threats and increase investment designed to make EU integration more attractive.

For Bosnia and Kosovo in particular, the paper calls for a "sui generis EU accession roadmap" that would allow them to open negotiating chapters and benefit from pre-accession funding despite their slower progress.

Xaviereff also calls for Germany to work with other EU countries to reduce the ability of third powers to influence decisions on Bosnia, Kosovo and Montenegro, and for the bloc to develop large-scale investment programmes in areas including artificial intelligence and connectivity.

"In this context, novel forms of hybrid destabilization of the future of peace and security in the WB require the continued attention of EU leaders," he wrote.

The DGAP paper said the region's future would increasingly be shaped by competition between liberal, rules-based integration and more transactional relationships with external powers.

"As local actors pursue ad hoc alliances and engage in transactional foreign policy," it said, "Germany and the EU will need to pay strategic attention to the Western Balkans."