Archive for category EU

EU-Russia: facing stagnation

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 »

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Eurasian Union’s problem with Russian nationalism

The Eurasian Union, Russian nationalism and the Moscow riots

It is a sad but quintessentially European story. A rich capital attracts migrants, which in turn creates tensions between the local population and the newly arrived immigrants. At some point, a trigger – in this case, the killing of a local man – causes those social and ethnic tensions to escalate into violence, with looted shops and burned cars. Such a scenario has unfolded in Paris, London and Stockholm before. But a few weeks ago Moscow joined the ranks when, in the district of Biryulyovo, hundreds of people rampaged through shops and the city’s biggest fruit and vegetable wholesale market.

The recent Moscow riots highlight several parallels between Russia and the rest of Europe in terms of societal politics, starting with social tensions in large urban centres and growing anti-immigrant sentiment. The riots are just one manifestation of a significant mutation in Russian nationalism – which has evolved from an expansionist, imperial and ethnically inclusive type towards an ethnically exclusive one. Thus the Biryulyovo riots – alas, neither the first nor the last of their kind – constitute a serious challenge for a Kremlin in search of a new modus operandi in domestic politics as well as foreign policy.

A more demanding public

The Biryulyovo riots and the anti-Putin protests of last year are part of the same trend whereby Russians are demanding a greater say in how society is run – a trend with both positive and negative consequences. The demonstrations by tens of thousands of people in Moscow against electoral fraud and Putin’s  style of governance, back in 2012, were a sign of a rising middle class tired of authoritarian rule. This year, the anti-corruption blogger Alexei Navalny took a significant share of the vote (27%) in the Moscow mayoral race and mobilised an unprecedented army of volunteers to campaign on his behalf. The mayoralty of Ekaterinburg, Russia’s fourth biggest city and the capital of the industrialised and relatively prosperous Ural region, went to another opposition campaigner, Evgenny Roizman, an anti-drug vigilante turned politician. This may not (yet) be considered as a democratic awakening – but a societal pushback against the status quo is clearly discernible.

The public’s demands for a greater say in political decision-making are far from confined to the desire for fair elections or traditional middle-class aspirations. Much more widespread is concern over immigration. Russia is one of the world’s major poles of immigration – second only to the US in absolute terms, though ranks well below the 30th place in per capita terms. The post-Soviet states of Central Asia and the South Caucasus are the main sources of such flows. A recent poll showed that over half of Muscovites identify immigration is the single most important issue today, and over 80% support the idea of introducing visas for Central Asian countries. A telling factor is that negative attitudes apply not just to migrants from other countries, but also to Russians from the North Caucasus (who are mostly Muslim and a highly visible minority), even though – as full Russian citizens – they are not officially migrants. Another significant factor is that tolerance vis-à-vis non-Russian but Slavic-speaking and Christian Orthodox Ukrainians or Belarusians is much higher than vis-à-vis Muslims – regardless whether they come from inside or outside Russia.
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Armenia’s choice and the Eastern Partnership

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 »

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A solidarity package for the eastern partners

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 »

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Keeping the Eastern Partnership on track

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 »

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The Russian-Ukrainian Trade Spat

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 »

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Ukraine’s gas loop

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 »

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EU is showing its teeth

It is standard practice to bash Catherine Ashton and how the External Action Service turned out. The story is of an inward looking institution, without having a grand narrative or strategic vision, and little credibility in either EU member states or EU’s external partners. It is hard to argue that EU foreign policy is doing well. But that is first and foremost because of structural factors – the economic crisis that drastically reduces EU’s foreign policy appetite and resources, as well as soft power appeal (see EU Foreign Policy scorecard 2012 for a similar assessment).

It is perhaps time to reconsider at least some of the standard, off the cuff, assessments of the EEAS (and Catherine Ashton). If one looks at some specific foreign policy dossiers, the reality is that of EEAS gradually emerging as a political animal that can show its teeth if and when necessary (were the Soviet Union alive, its propaganda department would have have used the consecrated term of  ‘zverinnyi oskal imperializma’ – the evil grin of imperialism), rather than a fat cat throwing money around as its recently dominant image used to be. Read the rest of this entry »

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Dealing with a post-BRIC Russia

I just co-authored a new ECFR report on Dealing with a post-BRIC Russia, some kind of a follow-up to the 2007 Power Audit of EU-Russia Relations. This new report deals with the impact of the economic crisis on Russian foreign policy and Moscow’s relations with China, US, the post-Soviet space and the EU. Among many other things the report argues that the EU is more united on Russia than it was a few years ago, less vulnerable to potential energy pressures, but that the EU is still underachieving in relations with Russia. The EU should stop treating Russia like a ‘small China’ and aim at more than trade-related objectives. The EU member states should better coordinate their bilateral Partnerships for Modernisation, and should also move as quickly as possible towards a visa-free regime with Russia (and EaP states), but even before, the EU that can drastically improve travel conditions through the adoption of an electronic visa system that would allow travellers who have already had a Schengen visa to get print-at-home visas.

The report has been endorsed by several foreign policy personalities in Europe. Here are some of the endorsements:

“This report is an important analysis of where Russia stands today and what opportunities this brings for the EU. It will open a much-needed and interesting debate.”

Javier Solana, former EU High Representative for the Common Foreign and Security Policy; former Secretary General of NATO

“This report is extremely insightful both for its great analysis as well as policy recommendations proposed which touch upon both foreign, economic and energy policies. The report is indeed a real working agenda for the European Union.”
Massimo D’Alema, President, Italianieuropei Foundation; President, Foundation for European Progressive Studies; former Prime Minister and Foreign Minister

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How the eurozone crisis undermines EU power

It is clear that the Euro-crisis has and will have huge implications for EU foreign policy. A lot depends on what happens in the next months – the solution to the Greek or Italian problems, the contours of a multi-speed Europe and how messy a solution or non-solution to the euro-crisis will be. Things can get worse, or they can get better. But it is already possible to take a snapshot of the foreign policy implications of the Eurozone crisis. The picture contains a push to the background of all foreign policy issues, followed by fewer foreign policy resources and a coma for EU soft power, made worse by the fact that the EU understanding of power is so unhedged.   Read the rest of this entry »

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