Posts Tagged Russia oil

EU or EU

Twenty years ago the Soviet empire broke into independent pieces. It’s a very good moment for Putin – who considered the break-up “a geopolitical catastrophe” – to launch his Eurasian Union to relieve its phantom pains of the new post-Soviet states.

The Eurasian Union is presented as a purely economic integration project to unite the markets of Belarus, Kazakhstan and Russia, to begin with.

But there is nothing as political as an economic integration project with Russia. As Putin once put it: wars for land are pointless today, as you can just buy it.

The Union can look to its predecessors. The pilot version – the Union State of Belarus and Russia – got stuck somewhere between oblivion and non-existence. There is also the Commonwealth of Independent States, the Collective Security Treaty Organisation, the Eurasian Economic Community, Eurasian Economic Community of Belarus, Kazakhstan and Russia and – last but not least – the Customs Union of Belarus, Kazakhstan and Russia.

The Kremlin’s neo-imperial ambitions start and end with the immediate neighbourhood and have a strongly nostalgic flavour. The Eurasian Union looks like a set of crutches for three authoritarian regimes with different (and to some extent incompatible) economies to cling together for survival.

Russia’s main export is gas and oil. Its import is everything else. The most significant part of the Belarusian budget is exports of processed Russian oil. Russia is an important market for Belarusian products, but no Russian oil means no state budget. But considering popular protests around Belarus and Russia, economic stability is more than ever a necessity in these countries.

Twenty years have gone by and Belarus’ choice between the EU and the EU (the Eurasian Union) is not political but purely geographical as it still borders on three EU member states and Russia.

Brussels expects Belarus to embrace democracy before any integration can go ahead. The regime in Minsk has ignored Brussels’ unilateral offer to liberalise visas. Politically, the offer from Moscow looks unbeatable as it contains no uncomfortable conditions on structural reforms, liberalisation and respect of democratic values.

But the latest-model union means for Belarus an even tighter hug by the Russian bear. The common market excludes access to Russian gas and oil. And the formula for gas prices is always open to re-calculation and re-negotiation, depending heavily on the good political will of Moscow.

So the Eurasian Union, another integration project with Russia: It’s like a bad dream, not even a nightmare, because it’s all too familiar.

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