Russia's cancellation of the South Stream gas pipeline project is forcing Serbia to count the cost of money already spent on infrastructure and jobs and Hungary and Bulgaria to look for other energy options. Joel Flynn reports.
This is Sajkas in Serbia. It might look bleak, but just over a year ago this area was set to become one of the most important parts of the European energy market. Five pieces of piping all the evidence now of what was supposed to be the South Stream gas pipeline. Serbia is just one country counting the cost of its cancellation - announced by Vladimir Putin earlier in December. The casualties of the political battle between Russia and the EU not just governments, but small businesses as well. Like Branko Tasevski's welding company. SOUNDBITE: Welding Company Owner, Branko Tasevski, saying (Serbian): "You can't lose what you never had, but we'd all hoped South Stream would happen, and we would all take part in its creation. It was supposed to start at the end of last year. We'd have all earnt substantially from it - sums which could have kept us going for the next five, six, even 10 years." The 2,400 kilometer South Stream pipeline was supposed to offer energy security for Europe - transporting Russian gas across the Black Sea to EU member Bulgaria, and then onto central and southern states. It would have been enough for 15 percent of Europe's annual demand. But the crisis in Ukraine has stretched relations between the two. Blame has fallen on both sides - Hungarian prime minister Viktor Orban laying it squarely at the door of the EU. But European Commission President Jean-Claude Juncker says the next move is Russia's to make. SOUNDBITE: European Commission President, Jean-Claude Juncker, saying (English): "South Stream can be built. The conditions have been clear since a long time. There is nothing new. The ball is in the court of Russia. We are ready and preparatory works are on the way." It's not just Eastern Europe that's licking its wounds at the loss of a huge payday. Even for Russia, forfeiting the return on a 40 billion dollar investment is more than merely pocket money. Talk now is of rerouting the pipeline through Turkey, according to Serbian energy journalist Jelica Putnikovic. SOUNDBITE: NIN Energy Correspondent, Jelica Putnikovic, saying (Serbian): "If Russia really wants to build a pipeline to Turkey, which I think they will because they need European customers, then they will find a way to help countries like Greece, Macedonia, Serbia and even Hungary to build more pipelines, which would be one way to compensate for the loss of South Stream." Russia has yet to do more than propose the new route. For businesses and governments in eastern and southern Europe though, they'll hope its more than just a pipe dream.