The EU has recently approved the Eastern Partnership initiative, just at the moment when the global economic crisis is changing the rules of the game in the Eastern neighbourhood, and elsewhere. Both Russia and the EU will have fewer resources – money and political attention – to be too preoccupied with the neighbours. I previously wrote about the Russian neighbourhood policy in times of crisis. The Eastern Partnership is not in crisis, but will have to be implemented in times of crisis. But what is the likely impact of the crisis on the Eastern Partnership?
The Eastern Partnership is an attempt to resuscitate the European neighbourhood policy and focus EU’s political attention on the East. But now the economic crisis is stealing the show. Concentrated on itself, with the growing danger of protectionism inside the EU, and growing negative attitudes to “foreign” workers, many aspects of the European integration process, let alone the EU neighbourhood policy will come under strain.
Free trade and visa facilitation with the neighbours might be the first to suffer. Visa-free talks will be delayed, and the temptation to accelerate the building of “fortress Europe” even higher. Many EU member states and neighbours are increasingly protectionist. A near-collapsing Ukraine has recently raised import tarriffs by an average of 13%, which puts under huge strain EU-Ukraine talks on a Deep Free Trade Area. When EU member states themselves are entering dire straits, it will also be increasingly difficult to commit more EU funding for the neighbours. The Eastern Partnership was marketed inside the EU as being “budget-neutral”, implying that it would not require additional money. Many bilateral assistance programs of (especially new) EU member states directed at the Eastern neighbours will be cut. Many of the Eastern Partnership’s champions among the new EU member states are hardest hit by the crisis. They are likely to become more introvert and might lose bargaining power inside the EU.
But the EU neighbourhood policy and the Eastern Partnership are not likely to collapse. The perspective of deep free trade between the EU and its neighbours was a mid-term one. For most EU’s neighbours, it was not likely to materialise in the next 3-4 years anyway (negotiations last for years, and the EU has only started them with Ukraine). Such talks might be delayed by the crisis, but would not killed.
The economic crisis might also change the neighbourhood in ways that can actually strengthen EU’s influence. For the last years, EU assistance to its neighbours was considered “candies” as Moldova’s president Voronin recently put it. And more often than not EU’s neighbours did not need the support of institutions such as the International Monetary Fund. They had huge economic growth (often into 10%), huge inflows of remittances and a cash-rich Russia was providing them with investments and assistance when necessary. Not anymore. Growth might turn into recession, while Russia is learning again how to count money.
As the neighbours are heading for rough times, EU funding suddenly becomes more important in the neighbourhood than it was in times of economic growth. EU funding to the neighbourhood (under ENPI) remains stable, and even marginally increases with the Eastern Partnership. Suddenly, EU’s voting rights in the IMF also become significant. The EU supported IMF bailouts for Ukraine and Belarus. Thus the EU can channel its influence through other channels as well. Bad times will increase the scope for EU conditionality in the neighbourhood, and give the EU an opportunity to actually accelerate its neighbourhood project. In other words, in times of crisis the EU might be able to buy more influence for the same money.
#1 by Dimitrios Triantaphyllou on March 25, 2009 - 12:11 pm
Nicu Popescu is right to consider the sobering effects of the economic crisis on the EU’s Eastern Neighbourhood and its newly launched Eastern Partnership (EaP) and the negative short- and mid-term outlook for the the ENP and the EaP. Nevertheless, the problems for the EaP will not go away with an eventual economic change of fortunes or EU support for bailouts in Ukraine, Moldova, and Belarus as the policy continues to be a product of a leaderless EU struggling to ratify the Lisbon Treaty in order to begin to put its house in order. As a result of the long institutional standstill starting as far back as the failed attempts to ratify the Constitutional Treaty, the Union has fallen prey to the prerogatives of its member states each positioning itself with other liked-minded states to promote policies that cater primarily to their national interests rather than the Union’s collective interests. As a result, the Union has within a span of two years launched two contradictory policies towards its Eastern Neighbourhood — the Black Sea Synergy (BSS) in 2008 and the Eastern Partnership in 2009 — both as part of its Neighbourhood Policy. While the Black Sea Synergy encompasses all the Eastern neighbourhood states (it even includes the possibility of Belarus’ involvement) including Russia and aims to promote or enhance regional cooperation, the EaP seek primarily to bring the 5+1 Eastern neighbours closer to the Union (and conceivably away from Russia’s influence). At a time of crisis, the aim should be to work together to cooperate on regional projects of common interest to all (including the Union) — projects that focus on cooperation in the fields of transport (both land and sea based), environmental concerns, energy, combatting transnational security risks, etc. The Black Sea Synergy actually aspires to this nevermind Moscow’s current unwillingness to be a full partner within the BSS. The EaP could only draw up new dividing lines along the its eastern frontiers both between its EaP partners and Russia and within these countries as the commitment both among political elite and their publics for more EU, more west is unclear in some of these countries. The reality between the aspirations from both the Orange and Rose revolutions in Ukraine and Georgia respectively and the inability of their leaders to actually bring about (or at least begin to bring about) the requisite institutional and social transformation is that these countries are very different from their counterparts in Central and Eastern neighbours (which though part of the Warsaw Pact were independent sovereign nations while the 5+1 countries only became independent less than 20 years ago; the three Baltic states being an exception). Also the aforementioned revolutions barely have a five year lifespan and apply to only two countries, while the road to membership for their western neighbours took at least 15 years to become a reality. The Eastern neighbourhood is nothing like the eastern neighbourhood of the EU15 primarily because of the Russian Federation’s overweaning presence and the historical evolution of the newly-independent states. Any policy that stems from an anti-Russian perspective (as undeniably the EaP at least as first conceived by Warsaw is) might not stand the test of time in the current EU institutional muddle and the global economic crisis. The emphasis should be on cooperation — after all difficult neighbours are not bound to go anywhere — rather that unwritten promises of eventual future accession to countries that are not even close to making the mark. The Eastern Partnership is in crisis and will continue to be in crisis because it might not necessarily be the correct policy for the region at this stage — it creates more dividing lines rather than abet the transformation of the ENP East countries. On the other hand, the reality is that it is here to stay, therefore the emphasis at this stage should be on ensuring the requisite tangible complementarity between the EaP and the BSS and enhancing dialogue and synergies with Russia (not in the sense of giving Moscow a droit de regard over EU policies but of working toward minimising misperceptions).
#2 by Jeff Mowatt on March 25, 2009 - 12:50 pm
P-CED has been operating in Ukraine for 7 years now, engaged in efforts to leverage localised microeconomic development initiatives. Although a UK based social enterprise we’ve been unable to establish any dialogue with either EU or UK government.
Instead, we’ve directed our efforts to leveraging investment from the US. The microeconomic ‘Marshall Plan’ strategy paper having been delivered to the Senate Foreign Relations Committee 2 years ago.
http://www.european-citizens-consultations.eu/uk/proposal/2012
To date, in line with the recommendations therein, USAID has launched the East Europe Foundation to support sustainable community enterprise and Ukraine’s government have announced 3 childcare policy changes.
#3 by Alex on March 26, 2009 - 2:34 pm
At least Nicu Popescu is not in crisis promoting Russian position and working as Russia’s PR agent. I can not recall Russia providing any assistance to its neighbours. May be when Russia was unexpectedly closing its markets or by cutting off gas supply. Unfortunately there is a long list only of such kind of assistance.
#4 by nicu on March 26, 2009 - 3:47 pm
Dimitrios, thanks. On the link between the Constitutional and Lisbon crises and EU’s Eastern policy… I do not think the link between institutional coherence and the Eastern policy is so clear-cut. Without Lisbon the EU can STILL do some meaningful stuff in the East. With Lisbon – it would be better, but the lack of “Lisbon” is not a credible excuse. Think of the following: the most effective things the EU did – the launch of the EU Border Assistance Mission to Moldova took place in Oct 2005 (a few months after the French and Dutch no), new trade regime on Transnistria – march 2006 etc. The EU became the biggest donor to Abkhazia and South Ossetia since January 2006, launched EU Border Assistance Team to Georgia in 2005. In fact the EU was most interventionist in these conflicts in 2005-2006. it could act, since there was some political will. Of course it could have done more, but since 2006 – it actually is doing less. Partly because EU member states are more divided on Russia. Solana has travelled only once to Moldova, Armenia and Azerbaijan (in 2001) – these kind of things can be fixed without Lisbon, and will not be fixed by automatically by Lisbon. It is much more an issue of political will and divisions between member states, rather than Brussels-related institutional fixes.
Alex: paranoia blurs minds. i suggest you read more posts from this blog, as well as some of the comments posted on this blog that claim the contrary: that I am “anti-Russian”. So different people have different conspiracy theories. I respect this right. I do have an intellectual repulsion, though, to the narrow-minded way of framing things as always being either anti-something and pro-something. the world is much more difficult and nuanced than that. if some people want to understand, fine, if not – bad for them. For the record now, I only write my analysis, and I do not promote any kind of view: be it russian, ukrainian, israeli, chinese or any other.
Now on the substance. Russia uses sanctions, but also incentives to promote its goals. On the sanctions you are right. But Russia also offered bailouts to Belarus, Kyrgyzstan, offered some (a lot actually) diesel fuel to Moldova, offers cheap weapons to Armenia, Belarus and CSTO partners. discusses a 5 billion potential bail-out for Ukraine, promisses one to Moldova, if needed; is about to contribute 7.5 bn USD to a Eurasec anti-crisis fund, offers assistance to Transnistria, Abkhazia, South Ossetia. All these carrots complement Russian sanctions.
#5 by Kazimierz on March 26, 2009 - 5:39 pm
@ Alex,
You are entitled to your opinions, but not to your facts.
Russia was selling gas to Estonia, Lotwa, Lithuania, Belarus and Ukraine in years 2000 – 05 for less than half market price. Only in 2006 Russia decided to switch to market prices, and to do it in stages. Hence problems with Ukraine every January when they try to negotiate a new price every year.
#6 by Alex on March 26, 2009 - 5:45 pm
Nicu, all you mentioned as assistance, bailouts and contribution to a Eurasec anti-crisis fund is just promises as you know very well (except of cheap weapons of course). As about promise of 50,000 ton of fuel to Moldova it was made last week in exchange for Voronin’s signature under the joint declaration with Medvedev, which gives the carte blanche for Russian troops to remain in Moldova (Trandniester) forever. Generous promise of 50,000 tons of fuel for Moldovan farmers is made to strengthen Communist party position in coming parliamentary elections in Moldova, which will take place on the 5th of April. It hardly can be considered assistance. As about your suggestions to read more posts of your blog, I prefer to read analysts than advertising of ‘Medvedev skiing’.
#7 by Nicu Popescu on March 26, 2009 - 5:56 pm
Alex, of course, what Russia does is conditional assistance. This does not make it “non-assistance”. I argue that Russia uses both pressures and incentives. I guess the only country that had to only face pressures in the last years is Georgia: all the others had to face both pressures and incentives.
There have been a number of loans to Belarus over the years (some of them in exchange for 50% of beltransgaz), there has been humanitarian assistance to moldova after the 2007 draughts, conditional opening of the wine market (in exchange for a GSM licence-Eventis, and electricity exports from Kuchurgan to Romania) Russia offered to buy all Azeri gaz for a high price + the examples above. Of course, Russia had an interest in doing these offers. Of course it applied a huge array of pressures (embargoes of wine, dairy products, meat, vegetables, oil and gas cuts, postal and air blockades etc). But if you claim that Russia only has pressures on offer (as you claim above) – you are wrong.
on Medvedev: claiming that medvedev was irrelevant during the gas crisis – is hardly advertising.
Of course, you can read any blogs you like. But your claim that this is Russian PR – is not only false, but also unsubstantiated and empty.
#8 by Asa Gunven (JEF) on March 27, 2009 - 5:46 pm
on a different subject:)
In regards the Eastern Partnership it is mostly problematic that Belarus has been included. Indeed dialogue is important to influence, and as you pointed out the economic crisis might increase our scope of influence. Still, the invitation, and even more so an potential invitation to Prague of Lukashenka, will help to legitimize both him and his regime. And even if a few political prisoners have been released lately there are hardly any general movements for liberalization in Belarus.
Last week, on the anniversary of Lukas “re- elections” Young European Federalists organised for the 4th year a night time action around the world to extend a symbolic support to the democratic movements in our neighbor country. Youth in 125 cities, from Minsk to New York, put muzzels to statues of writers, kings and scientists to symbolize the troublesome situation in Belarus the very night before the summit decided about the Eastern Partnership. Read more about the action on http://www.jef.eu. The interesting thing was that an Russian activist wrote to us right after Solanas “positive spirited” visit to Belarus, where little EU critique was uttered, that we could not do the action “now” after the “positive spirit of cooperation”. This shows the danger of opening hands, of unconditional cooperation – it legitimizes the regime and puts prevent oppositions work.
EU need not only a strong neighborhood policy – it needs to fill it with real demands and strong messages as well!
#9 by IM on March 28, 2009 - 6:32 pm
@ Nicu I think it is good attempt to understand what is happening. In my opinion I think the consequences of the crisis will be seen a little bit later and i have no doubt that it will affect the eu-neighborhood relations, but also the relations between states within the EU. A lot depends on the extent of the crisis and to this point listening to many Nobelists I did not get a clear answer, nobody knows when will it end.
The conditionality of EU policy might loose its efficiency, because political elites will be concerned with their own survival and the crumbs they get from ENPI are not enough to motivate them.
Regarding the comment on Russia providing incentives to promote its policy, I would have some doubts regarding the statement that Russia bailed Kyrgyzstan out … I mean it is not quite complete. My impression is that those were simply deals and bailouts in the American sense of the word.
In fact most of the experts on Kyrgyzstan agree that Russia bailed Kyrgyzstan out in order to have the Manas base shut down and secondly the current president of Kyrgyzstan is approaching re-election in a difficult internal environment so he would do anything for money. So, Russian incentives work only under specific conditions. Moreover, the bailout is not yet in place and it will include some elements that actually help Russia establish its clout on the energy sector of Kyrgyzstan. Could EU bailout neighbour countries? Of course, not.
#10 by IM on March 28, 2009 - 6:38 pm
One more point. We should careful in analyzing the budgeting process of EU. In US for example the budget is constantly ammended. In EU, I am not sure but even if in 2006, certain sums of money were allocated for ENPI, it may happen that the member states decide to cut some spending. But again as I said I am not sure whether that’s legally possible and easy. I suspecy however that the Eur. Parl. a,d the Council could do that if the crisis worsens.
#11 by barilotti on March 30, 2009 - 5:33 pm
Nicu, thanks for the article. I totally agree that the only reason for which – for instance – Belarus would agree to be a part of Eastern Partnership program actively would be money, and much bigger money than 600M approved recently. Being a part of this structure means to be included into a range of “privileged” neighbours and also to pursue own interests in a much closer debate group where Belarus can potentially have more influence than it was envisaged by bilateral ENP. But my fear is – if there will be not enough budget to really bailout the region, the attractiveness of EaP will not be enough to keep the undemocratic regime doing at least some positive steps… Russia has all chances to win the game.