Columbia International Affairs Online: Working Papers

CIAO DATE: 06/2008

Two Reluctant Regionalizers? The European Union and Russia in Europe's North

January 2001

Finnish Institute for International Affairs


It has become something of a cliché to argue that the break-up of the Soviet Union in 1991 resulted in dramatic changes in the unfolding of political space in the 1990s. Yet this was especially true in the case of the then European Community (EC) and its relations with the Soviet Union/Russian Federation. During the Cold War, the relations between the EC and the USSR were practically non-existent. The ascension of Mikhail Gorbachev and the period of perestroika and glasnost resulted, however, in a gradual rapprochement between the two parties. The creation of these new ties was formalized in the signing of a Trade and Cooperation Agreement (TCA) between the EC and the USSR, which was, however, in effect signed with an already crumbling Soviet Union as it took place as late as 21 December 1989.

After the dissolution of the Soviet Union in December 1991, the 1990s witnessed a rapid development in EU-Russian relations. Indeed, the first part of the decade in particular can be seen as a time of searching in order to find a proper framework for the relationship. Consequently, the two parties have been busily engaged in the creation of a host of new institutional and contractual structures ranging from the mutual Partnership and Cooperation Agreement (1994) to their own approaches to the relationship (the EU’s Common Strategy on Russia and Russia’s Mid-Term EU Strategy, 1999). These endeavours have resulted in a structured dialogue between the parties, including the annual Cooperation Council, the EU-Russia Summits organized twice a year between the EU Troika and the Russian President, and continuous discussions between ministers and civil servants and the members of the Commission. There are also regular exchanges between the European Parliament (EP) and the Russian State Duma.

In addition to institutional ties, Russia and the European Union have been bound together by a significant rise in trade and tourism. The financial and political crisis of August 1998 in Russia does, however, still affect the level and development of EU-Russian trade and foreign direct investments (FDI). EU exports to Russia have particularly suffered while Russia has been able to continue exporting its goods to the EU internal market. This is largely due to the fact that the main bulk of Russian exports are gas, oil and other raw materials of which there is a dire need in the European Union. As a consequence, the EU is Russia’s most significant trading partner, accounting for 36.7 per cent of Russia’s imports and 33.2 per cent of its export trade. In comparison, Russia’s share of the EU’s external trade is considerably more modest, consisting of only 3.3 per cent of total imports and 1.9 per cent of exports. The European Union is also Russia’s most significant source of FDI although it, too, has suffered from the economic uncertainties in Russia. The level of FDI peaked in 1997 at 1,723 million euro, but soon plummeted after August 1998 and stood at only 343 million euro in 1999.

There is, however, another side to the post-Cold War developments in EU-Russian relations, as the changes have not only transformed the nature of ‘high politics’ between Brussels and Moscow but have also had profound effects on the level of interregional cooperation over the former East-West divide. Indeed, the first thing that has to be taken into consideration when examining the European Union’s transboundary interregional cooperation with Russia is the relative novelty of the phenomenon: during Soviet times, transboundary links across the Iron Curtain were not only non-existent, they were also strictly illegal. Viewed from this perspective, the development of interregional cooperation between the European Union and Russia during the 1990s must be seen, firstly, as still being in its early stages and thus largely experimental but also, secondly, as a kind of significant new opening in post-Soviet Russia. Indeed, taken together with the overall development of EU-Russian relations and keeping in mind the rise in tourism and transboundary interregional cooperation, there has been a significant qualitative change in the fabric of Russian society. Sergei Medvedev has argued that all levels of Russian society (elites, regions, social groups and individuals) have already experienced a degree of new openness that is practically impossible to reverse. But the as yet unanswered question still persists: Is there already a sufficient ‘critical mass’ to ensure that a reversal to the old autocratic ways is truly impossible in Russia?