European Affairs

Summer 2002

 

In The News
Like the U.S., the EU Wants Russia as a Partner
Philippe Lemaître
Brussels Correspondent

 

Just like the United States, Europe is betting on Vladimir Putin without any reservations. European leaders are deliberately forgetting Russian repression in Chechnya - which only yesterday they were harshly condemning - and other breaches of democratic principles, especially with regard to freedom of the press.

The 15 countries of the European Union no longer regard Russia as an adversary, nor even as a great unpredictable power of which it would be wise to be wary, but as a partner, almost an ally.

The new European attitude was confirmed at the EU-Russia summit meeting that was held May 29 in Moscow, hard on the heels of the meeting between President Putin and President George Bush in St. Petersburg and the NATO-Russia meeting in Rome. While it may not exactly be a spectacular development, Europe's change of tack is profoundly changing the organization of the Old Continent.

We should applaud this ambitious approach. In a sense what the European Union is doing is completing its current expansion into Central Europe by extending it further to the East. There is no question of Moscow becoming a full EU member. With the exception of Silvio Berlusconi, the Italian Prime Minister, EU member governments have ruled out such an idea, which they believe would throw the process of European unification off balance.

But the European Union wants to associate the Russian world, including Ukraine and Belarus, with the vast zone of peace and prosperity that is under construction in Europe. EU governments have noted with satisfaction Moscow's support for the European Union's forthcoming enlargement, including EU membership for the three Baltic States, which only just over ten years ago were integral parts of the former Soviet Union.

More than that, however, the Europeans now intend to invite their new partners to model themselves on the European Union, to adopt EU judicial, technical and commercial standards, and, tomorrow perhaps, political standards. In return the Europeans are promising financial aid, investments and access to the EU market.

Europe's strategy reinforces that of the United States. It is the entire western world that wants to bury the Cold War once and for all and draw this great Eastern power, led astray for a time by the aberrant accident of Bolshevism, back into the fold.

Of course, as all the Western powers perform the same seductive dances for Russia and its leader, some very concrete rivalries are emerging, particularly over control of oil and gas reserves and the transportation infrastructure (especially pipelines) that permits their delivery to markets.

At political level, when war and peace or terrorist threats are at stake, the Russians indubitably prefer to talk directly to the Americans. On these issues, Europe remains a lightweight. But if they are fascinated by American power, the Russians seem to be fully aware that the Europeans are closer partners with more interesting markets.

Since the entry into force in 1997 of the EU-Russian Partnership and Cooperation Agreement, a privileged relationship between the two parties has gradually become apparent. While the member states unanimously favor supporting Mr. Putin's Russia, the development of this closer partnership owes a great deal to the European Commission, and particularly to its President, Romano Prodi.

At an EU-Russia summit meeting in Paris in October 2000, Mr. Prodi launched an energy dialogue with Russia in the face of general skepticism. Despite undeniable difficulties, the dialogue is proceeding satisfactorily.

It was also Mr. Prodi who thought up the idea of the Common European Economic Space (CEES), in order to create a goal and a framework for the multi-faceted cooperation developing between the European Union and Russia. The European Union will very soon have a long common border with Russia, Belarus and Ukraine.

The most difficult immediate problem concerns a small new neighbor that the enlarged European Union will acquire: the Russian district of Kaliningrad, formerly Königsberg, the capital of East Prussia. Kaliningrad, which was annexed by the Soviet Union in 1945, is an enclave on the Baltic Sea surrounded by Poland and Lithuania.

The question is what formalities the inhabitants of Kaliningrad will have to fulfill in order to pass through Poland and Lithuania and get to the rest of Russia, once these two countries become members of the European Union.

The EU intends to protect its external borders against illegal immigration, as well as trafficking of all sorts, and in that spirit, Poland and Lithuania are planning to require visas for Russian travelers in transit.

The Russians, on the other hand, would like to create "corridors" allowing their citizens to travel without administrative obstacles between Kaliningrad and the rest of Russia.

The idea of "corridors" brings back bad memories for Poles and Lithuanians, who completely oppose the plan. Moscow, however, will not hear of visas. At the May 29 summit meeting, Mr. Putin raised the Kaliningrad issue in very strong political terms.

The European Union is suggesting pragmatic solutions such as "transit permits" (to avoid the word "visa") which would be issued under simplified procedures. It would also offer financial aid to smooth the operation of frontier controls.

Brussels officials point out that the current arrangement is far from ideal. Although it is theoretically meant to provide for free transit, cars and trucks have to wait in interminable lines at the Kaliningrad border.

It is clear that no agreement will be reached as long as the Russians persist in dramatizing the issue and refuse to consider practical solutions. The European Union would like to reach a compromise at the latest during its Copenhagen summit meeting in December.

There are many reasons why Mr. Putin has chosen to politicize the issue - one of them doubtless being to mark his annoyance at what he sees as the excessively technocratic manner in which the European Union, and particularly the Commission, is conducting the negotiations.

Russia, as a great power, hardly appreciates having EU rules and regulations unceremoniously foisted upon it, as if it were one of the Central and Eastern Euro-pean countries applying for EU membership.

The relationship that is being built between the European Union and Russia is all-encompassing, and includes political and diplomatic elements. It is clear, however, that economic factors are the most important, and that, in Brussels's view, Russia will have to adopt the rules of the European Union if it is to be progressively integrated into the CEES.

Sectoral working groups, composed of public and private sector representatives, have been set up to identify the potential for EU investments in Russia and the conditions that will be required.

The CEES thus looks like a mechanism for bringing Russian legislation closer to that of the European Union, which should, together with EU technical assistance, facilitate Russia's entry into the World Trade Organization (WTO). This could happen as early as the end of 2003.

Pascal Lamy, the EU Trade Commissioner, never misses a chance to stress that the European Union favors Russian WTO membership, while adding, however, that it will require serious efforts on the Russian side, and in particular a genuine opening of the Russian market to EU exports.

The harsh negotiations between the European Union and Beijing before China was allowed to join the WTO should be enough to remind Moscow of the seriousness of such demands.

Moscow obviously does not like being called to order in this way each time the European Union seeks to offer encouragement, as the energy dialogue launched in October 2000 also shows. In that case, however, things are fairly simple. With trouble constantly mounting in the Middle East, the European Union is trying hard to limit its energy dependence on the region, and, in order to do so, to diversify its sources of supply.

From this perspective, the European Union is ready to invest in Russia, which is on the way to becoming the world's largest producer of hydrocarbons, ahead of Saudi Arabia, and to grant financial and technical assistance, provided it gets satisfactory guarantees in return.

First of all, Brussels will want legal guarantees. It is risky for Western companies to venture into Russia, and they are particularly hesitant to invest in Russian enterprises as minority stockholders. The European Union is clamoring for clear, comprehensive and effective production sharing agreements. But in a working paper drawn up before the May 29 summit meeting, Brussels was still deploring the fact that "contrary to developments in other areas of the energy dialogue, no progress has been made in this regard."

Another point of contention is the regime under which Russia sells its oil, and especially its gas, to Europe. At issue are the famous "destination clauses" required by Moscow in all its long-term contracts with EU countries. To maximize its revenue, Gazprom sets different prices for different countries, and in order to maintain this advantageous arrangement, forbids its clients to re-export its products outside their borders.

The European Union asserts that Gazprom must henceforth take account of the progressive introduction of the single market in this sector and put an end to these territorial restrictions. The word from the office of Loyola de Palacio, the Energy Commissioner, is that solutions are being found to settle this delicate issue.

Improving security of energy supplies also means ensuring that transportation infrastructures are in good working order. The EU is proposing that Moscow participate in a joint study of the repair and maintenance needs of the gas and oil pipelines.

Brussels also wants to cooperate with Moscow to establish a Europe-wide satellite surveillance system designed to prevent accidents and detect oil and gas leaks. These initiatives, which would give the European Union a rather intrusive oversight capability, have been greeted warily by a country nostalgic for its former super power status and thus all the more jealous of its sovereignty.

The European Union, however, has convincing arguments to put such anxieties to rest, if it can demonstrate a minimum of tact. It is ready to open wide its purse strings to contribute to projects designated as being of "common interest." Some such projects, such as a proposed pipeline linking the gas deposits of Yamal in Northern Siberia to EU markets via Belarus and Poland, have already been clearly identified.

It is not always an easy game that the Europeans are playing. They are dealing with a power that does not always have the same frames of reference or the same values. Nevertheless, the will to make progress seems fully established on both sides. It is based on well-understood mutual interests, as well as on evolving geopolitical power relationships. The ability of the two sides to resolve the relatively modest but sensitive Kaliningrad issue will be the next test of their common determination to move ahead.