Medvedev visits Serbia bearing $1 billion loan

Russian President Dmitry Medvedev carried a $1 billion loan to recession-hit Serbia on Tuesday, as Moscow seeks to expand its political and economic influence in the Balkans.

The loan deal is to be signed during Medvedev's one-day visit, - the first-ever by a Russian president to Serbia. It adds to Russia's growing clout in Serbia, which relies on Moscow's diplomatic support in the U.N. Security Council to oppose the secession of Kosovo, Serbia's former province.

Thousands of policemen were deployed on Belgrade streets and much of the Serbian capital was blocked to traffic amid tightened security for the visit.

"Medvedev's visit will confirm the political unity and mutual support between Serbia and Russia," said Serbia's Foreign Minister Vuk Jeremic.

Last year, Russia's state-controlled gas monopoly OAO Gazprom bought Serbia's major oil and gas assets and agreed to a route through Serbia for its South Stream pipeline bringing Russian gas from the Black Sea to Europe.

The route across the Balkans, including Serbia, would avoid Ukraine, with which Russia has pricing and political disputes, and competes with a U.S. and EU-backed pipeline called Nabucco.

Gazprom has also purchased a 51-percent stake in Serbia's oil company NIS, a deal that allows the Russians to have the monopoly over the sale of gasoline and natural gas in the Balkan country until 2011.

Serbia and Russia are traditional allies, sharing a common Slavic background and Christian Orthodox religion. But their political relations have not matched the ethnic ties and Belgrade has been seeking to integrate with the West, including joining the EU.

Although reluctantly supporting Serbia's EU bid, Moscow officials have firmly spoken against its possible NATO membership.

The United States would like to see Serbia in the Western military alliance because that would add to the security in the Balkans region, which is still reeling from the bloody ethnic conflicts in the 1990s.

Medvedev will also attend celebrations marking the liberation of Belgrade from Nazi occupation in World War II by Soviet and local communist fighters. He will address Parliament and visit the seat of the Serbian Orthodox Church.

On the eve of the visit, Russian diplomats demanded that Belgrade authorities restore the names of streets that used to be called after the Red Army generals who took part in the liberation of the capital in 1945.

The names were changed after the fall of President Slobodan Milosevic in 2000. Milosevic had maintained close ties with Moscow.

----

Associate Press writer Jovana Gec contributed to this report.