Archive for category Eastern partnership
For the best part of the last two decades, EU-Russia summits have alternated between being upbeat events where new grand integration initiatives were launched – the creation of four common spaces in 2005, the partnership for modernisation in 2010 – and rather unfriendly encounters where success was seemingly measured on how impolite the partners could be to one another.
In recent years, summits turned less mercurial and became mainly box-ticking affairs. This is arguably a sign of the emergence of a more mature relationship based on ever higher levels of interaction in the fields of energy, tourism, business, and education. But it is also a sign of mutual disenchantment and reduced expectations, to the extent that the relationship is now practically stagnating. As a result, no grand projet is likely to help re-launch the partnership. The latest such initiative – the partnership for modernisation – is now being undermined by a conservative backlash in Russian domestic politics. Despite this relative gloom, however, the relationship can still move forward and there is progress to be made on specific initiatives.
Still trading a lot – but less
Although the EU-Russia economic partnership rests on solid foundations, it has lost its momentum. The EU is Russia’s single biggest trading partner, with 41% of Russia’s total external trade (and 45% of its exports) going to the EU in 2012, far ahead of China (9.8%) and Ukraine (3.7%), in second and third place respectively. In contrast, Russia is the EU’s third biggest trading partner – after the US and China – accounting for 9.7% of the EU’s external trade. Read the rest of this entry »
The run-up to the Eastern Partnership (EaP) Summit in Vilnius has been one of the most dramatic episodes in the recent diplomatic history of the EU. The events that followed have been even more extraordinary, with hundreds of thousands of Ukrainians taking to the streets in protest against the non-signature of the Association Agreement with the EU.
The three key EaP countries – Ukraine, Moldova and Georgia – are all suffering to differing degrees from a form of pre-electoral fever. The EU is faced with the challenge of how to proceed with Ukraine whilst keeping Moldova and Georgia on the EaP track.
Ukraine: choosing not to choose
The halting of the Association process just a week before the Vilnius Summit has largely been presented as something of a geopolitical catastrophe, with Ukraine choosing Russia over the EU. This is, however, not the case. In fact, Kiev chose not to choose at all between Russia and the EU and tried hard to maintain the status quo in Ukraine’s foreign and domestic policies. Yet in his bid to buy time, President Viktor Yanukovich inadvertently precipitated the biggest crisis of his presidency to date. Read the rest of this entry »
A few weeks ago, Armenia stunned EU foreign policy watchers when it gave up on its association and free trade deal with the EU just a few weeks after negotiations had been finalised. The move followed Russian demands on Armenia to join the Russia-led Customs Union, thereby preventing the state from entering into a free trade with the EU. But even if Armenia’s U-turn was the direct consequence of Russian pressure, it nevertheless touched a raw nerve in the EU. It is therefore relevant to ask what Yerevan’s U-turn means for EU foreign policy in general, and for the Eastern Partnership (EaP) in particular.
The shape of things to come?
That a country of 3 million people and a nominal GDP of $10 billion would turn its back on the world’s biggest market (over half a billion people and a $16 trillion GDP) would have previously been virtually unthinkable. The EU, which has spent the last two decades managing a queue of almost two dozen countries vying to enter the club, is simply not used to being rejected by countries such as Armenia.
Armenia’s sudden change of direction seems to suggest that one of the most prized things the EU can offer (access to its market) can be countered by other powers – and offers. It was not Armenia’s decision per se that shook the EU foreign policy community, but a fear of the possible shape of things to come – and a feeling that a multipolar world is emerging not only at the expense of US power, but also of EU influence. Read the rest of this entry »
The year ahead will be a crucial one for the success of the Eastern Partnership (EaP). While Ukraine and the EU work towards the eventual signature of an Association Agreement at the Eastern Partnership summit in Vilnius in November, Moldova and Georgia will only initial the Agreement, and are not due to sign it until autumn 2014.
Since the Deep and Comprehensive Free Trade Agreement (DCFTA) will only become a legal reality for them towards the end of 2014, between now and then they will be vulnerable to external pressures – diplomatic, commercial or energy-related – aimed at disrupting the signing of the agreement.
The recent U-turn by Armenia (which chose to join a Russia-led Customs Union rather than sign up to the DCFTA), as well as rising trade pressures on Ukraine and a new wine embargo on Moldova, probably mark just the beginning of a longer escalation of trade-related hostilities. The aim of these pressures is to either divert some of the Eastern partners from their EU association agenda, or drastically increase the costs of pursuing this option and weaken the political forces behind pro-EU moves. As a consequence, they will start paying the economic and geopolitical price for association with the EU well before they start reaping the benefits of it. Read the rest of this entry »
Sir Humphrey Appleby, the suave civil servant in the British sitcom ‘Yes Minister’ known for his wise but cynical pessimism, once remarked that diplomacy is about surviving until the next century – while politics is about surviving until Friday afternoon.
Such differences in time horizons apply also to the pace of European foreign policy when dealing with post-Soviet realities, as the EU and most of its Eastern partners enter the finishing line on Association and Deep and Comprehensive FreeTrade Area agreements. For in the case of EU-Armenia relations, things have not survived intact until Friday afternoon. After having been engaged for years in the preparation and negotiation of an Association and Free-Trade agreement with the EU, Armenia has aborted the process just before its conclusion and announced its intention to join the Russian-led Customs Union. Read the rest of this entry »
In mid-August, Russia blocked virtually all imports from Ukraine. Although the cross-border flows between the two countries have since resumed following a week of heightened tension, the issue is far from over. On the contrary, the trade spat was probably just the first warning shot in what could escalate into a full blown trade war, the ultimate aim of which would be to prevent Ukraine from signing an Association Agreement with the EU at the Eastern Partnership summit in Vilnius in late November, thereby preventing further economic integration with the European Union and steering it in a Eurasian direction instead.
It is in Ukraine’s political interest to sign the Association Agreement, containing a free trade component, with the EU, while maintaining the existing free trade agreements it has with other post-soviet states, including Russia. Although a country can have multiple free trade agreements and such an arrangement would be a win-win situation for Ukraine, Russia is adopting a more zero-sum stance towards the matter. This is primarily due to the fact that, once Ukraine signs the Association Agreement with the EU, it will no longer the able to join the Russia-led Customs Union – or the proposed Eurasian Economic Union – due to the differing standards and tariffs in place. An EU-Ukraine free trade deal will mean greater access for Ukraine to the EU market through lower customs and non-tariff barriers, higher export quotas for certain sensitive goods, and the adoption of EU standards in a wide range of domains.
Until recently, Russia was relatively at ease, feeling secure in its belief that the EU would not sign the already finalised and initialled Association Agreement with Ukraine as long as former Prime Minister Yulia Tymoshenko remained in jail, and that President Yanukovich was unlikely to release his main political rival a year and a half before the next presidential elections, due in early 2015. However, in the last few months there has been some progress made, with the European Commission putting forward a proposal for a Council decision on the signing of the Agreement, and the EU and its member states working more actively to seal the deal with Ukraine in Vilnius. Read the rest of this entry »
For many years, most countries in central and eastern Europe – from Bulgaria to Latvia, from Ukraine to Hungary – have complained of their dependence on Russian gas. All have tried to reduce this dependence through a combination of the development of new infrastructure (interconnectors, compressor stations for reverse gas flow), frantic searches for alternative gas suppliers (Nabucco, Norway), anti-trust procedures against Gazprom (as launched by the European Commission), and regulatory changes affecting the sale of gas in Europe (the ‘third package’).
An interesting sideshow of this struggle is now occurring in Ukraine. While most analysts assumed that a decreased dependence on Russia would come from access to non-Russian resources – in the form of shale gas, liquefied natural gas (LNG) or Norwegian gas – Ukraine and the German energy giant RWE seem to have found a way to limit Gazprom’s sway over Kiev, while continuing to consume Russian gas. Read the rest of this entry »
Foreigners normally tiptoe around Azerbaijan. They all want something from the country, be it in the field of energy or security. The EU wants Azerbaijani oil, gas and cooperation over building gas pipelines to Central Asia. The US and Israel value cooperation over Iran. Turkey has a strategic partnership with the country. Russia wants Azerbaijan not too align too closely with the US and to prolong the lease for the Russian radar station in Gabala. In its turn Azerbaijan is rarely a foreign policy demandeur. It has lots of oil money and a consolidated authoritarian regime which does not want to take lessons over foreign policy or lack of democracy at home.
Appearances can be deceptive
Money and a careful foreign policy between various great power interests made Azerbaijan the ultimate balancer and a fairly arrogant regional player. But the Azerbaijani system is more fragile than the country’s foreign partners think. The foundations of that system are increasingly shaky for several reasons.
One key factor is decreasing oil production. Oil production peaked in 2010; it will go down by half by 2017 and two-thirds by 2019. The hope is that new gas reserves will make up for the difference in incomes. This might compensate the fall in revenues, but only partly and insufficiently. Read the rest of this entry »
Ukraine’s favourite foreign policy game is called ‘multi-vectorness’ – a constant process of ‘eschewing choice’ as this recent study explained. For years Ukraine sought to extract concessions and be treated nicely by both Russia and the EU or US not because it was sticking to its promises, but because it played sometimes skilfully and sometimes brazenly on contradictions between external actors. A simplified version of the rule of rules of the game, in its Ukrainian version, looks the following way:
- Promise both Russia and the EU everything they might want to hear (usually integration into some Russian- or EU-led initiative);
- Ask for something in exchange (market access, lower gas prices, financial assistance, opportunities for lucrative but opaque deals etc).
- Get what you asked and drag your feet on delivering on your promises.
- If either the EU or Russia is upset for not getting what they were promised – threaten that you will intensify cooperation with the other external partner.
The truth is that this has mostly worked. (Not just for Ukraine, but also for Moldova under Voronin and at times Belarus’ Lukashenko or a whole series of Central Asian states, not to mention a plethora of historical case from Italian city-states in the Middle Ages, to Nasser’s Egypt and Tito’s Yugoslavia.) Read the rest of this entry »
This will probably make boring reading, but for those with some stamina to go through typically unreadable, but important, EU-speak here is a comparison of how Ukraine and Moldova perform on their way towards a visa-free regime with the EU. The assessment is based on the recent progress reports by the European Commission on the implementation of the Action Plans on visa liberalisation by Ukraien and Moldova. (The relevant documents are here: Action Plans for Ukraine and Moldova outlining the conditions; and the progress reports for Ukraine and Moldova evaluating progress September 2011).
The progress reports are mainly concerned with legislative adjustments, which correspond to Phase 1 of the Action Plan. Evaluating realities will come next years. In order to somehow quantify the conclusions I also decided to give a ‘plus’ to the country that is ahead with some reforms, and a ‘minus’ to the country that lags behind the other (a simplified version of what ESI did with the Schengen White List project). Giving just plusses and minuses is of course quite simplistic, but nonetheless a useful exercise for a ‘quick and dirty’ look at where Moldova and Ukraine stand in relation to each other. I also decided to give additional bonuses in the form of half or full plusses to some areas which are much more important than the others (like introduction of biometric passports – a full plus, or half-pluses to having a half-functioning migration service or having implementing protocols for readmission agreements with EU member states). Read the rest of this entry »