Russia and the EU: competition in a time of crisis?

Vadim Kononenko
Helsinki Times

Russia continues its policy of acting as a strong
player on the international stage, whereas the European Union has opted for
saving its energies in order to solve domestic problems. In economic terms this
makes for an interesting strategic clash, writes Vadim Kononenko.

Investment has become a
particularly risky line of business during the global financial crisis,
but not
for Russia.
In the past few months, Russia
has been pouring billions of dollars into the economies of countries
including Iceland, and the Baltic countries, Ukraine and Kyrgyzstan.
Most of Russia’s investment projects are targeted at the
Central Asia and the western part of the former Soviet Union, the
region where Russia has
strong political and security interests.

investment spree has elicited a wary response from the West. The Western
attitude is a mixture of serious concern and some sort of acknowledgement of Russia’s
activism. On one hand, the EU, the US
and others are worried about Russian resurgence, a trend that started before
the economic crisis and culminated in the war with Georgia in August 2008. On the
other hand, anyone who knows a bit about Russia’s
history would not be surprised by Russia’s
preoccupation with the region as it is regarded by the leadership and the
general public as Russia’s
legitimate sphere of interest.

The question that is ultimately crucial for Europe’s
policy-makers is whether Russia’s
attempts to project its political and economic influence in the former Soviet Union are compatible with the EU’s integration
projects. The EU projects, such as the European Neighbourhood Policy and the
nascent Eastern Partnership, are directed at the same countries. Are the EU and
competing for influence and resources of the region and are bound to collide?
Is it possible for them to avoid collision while remaining competitors?

In reality, Russia’s
behavior is shaped by both domestic and external factors. It is being
influenced by the strong belief widespread in the Russian society that the
country should be a dominant player in the region. The crisis has not changed
this view, on the contrary, the present situation is seen as an opportunity to
enhance Russia’s
influence by taking advantage of the economically impoverished neighbours. Also
the other big players – the EU, US are preoccupied with pressing economic
problems at home.

Yet Russia’s
capacity to conduct a resurgent foreign policy has become limited by the impact
of the crisis on the country’s economy, both in terms of plummeting oil prices
and increased public expenses. Like any other state, Russia has to balance its foreign
policy and domestic agendas. If in the short run the Kremlin places priorities
outside Russia’s
borders, this could prove to be a strategic mistake in the long run, given that
it will take years to recover from the financial crash of 2008.

More importantly, compared to the EU’s Eastern partnership Russia does not
have a coherent regional outreach project of its own. Interestingly, the EU,
which is often criticised for its cumbersome way to attain at common
strategies, has managed to come up with some strategy, whereas Russia has only
very general declarations and many different projects and moves towards the region.
Lacking a comprehensive strategy, the Kremlin will find it hard to garner
regional support. Russia
will have to continue dealing with its neighbors on a case-by-case basis, which
requires a lot of political and economic horse trading.

Finally, China
has emerged as another regional competitor, which unlike the West has not been
affected to the same extent by the economic recession. Unlike Russia, China does not have the image of an
anti-Western, non-cooperative, zero-sum player. Finding ways to accommodate China’s increasing interests in the region, and
not sinking into another geopolitical rivalry with a better equipped
counterpart will be a difficult task for Russia.

seems to have made its choice in favour of continuing its existing strategy of projecting an image
as a strong player, albeit one that still lacks a coherent strategy. The EU for
its part has launched a new strategy for the region, but has opted for saving
its energies in order to solve domestic problems. Let’s see who turns out to be
more competitive as the game continues to unfold.