The way forward in EU-Russia Relations

Eurometri Magazine, 02/2008
Hiski Haukkala

The post-Cold War EU–Russia relationship has been based on erroneous
premises. The lack of a genuinely shared understanding concerning the
relationship has resulted in growing political problems between the
parties. Instead of toning down its relations with Russia, the EU
should seek to re-invigorate its approach to the country. The EU
should, through its own actions, make it clear to Russia that it
deserves respect. By pursuing a unified internal energy market and
subsequent common external energy policy, the EU might be able to make
Russia take the Union level more seriously again, says researcher Hiski
Haukkala from the Finnish Institute of International Affairs.

False premises

It has become something of a truism to contend that EU–Russia relations
are in a state of semi-permanent crisis. Substantial and constantly
deepening economic and political interdependence notwithstanding, the
actual interaction between the two seems to produce little more than
deep-seated misunderstandings, mutual suspicion and growing
disillusionment with the very idea of partnership. In hindsight, this
is rather surprising, even disappointing, and the current mood seems
far removed from that at the beginning of the 1990s when the two were
busily engaged in developing a mutually beneficial “strategic
partnership”.

The fact that the relationship between the EU and Russia has failed to
live up to expectations stems from the fact that it has been based on
erroneous premises on both sides. To understand why this is the case,
we must appreciate the exceptional circumstances during which the
foundations of the relationship were initially laid. The end of the
Cold War and the dissolution of the Soviet Union heralded an age of
optimism. The beginning of the 1990s witnessed a period of Fukuyaman
“End of History”, during which time there was a strong expectation of a
swift transition towards liberal forms of economy and politics in all
of Europe, Russia included.
The political foundation of the EU–Russia relationship, the Partnership
and Cooperation Agreement (PCA) adopted in 1994, should be seen as a
reflection of the Zeitgeist of its era, departing from an assumption of
the essential compatibility of the EU and Russian value systems and
aiming at ever-closer economic integration and political cooperation
between Brussels and Moscow. As a consequence, Russia was subjected to
the same objectives and principles as the rest of the emerging Central
and Eastern Europe, with the important proviso that full membership of
the EU would not be on the cards.

The course of events has proved otherwise. Russia has not been willing
to live up to its original aims of pursuing a western democratic and
liberal path, a path which the country itself declared it wanted to
follow in the immediate aftermath of the demise of the Soviet Union.
Instead, Russia witnessed a period of internal weakness and ideological
disorientation, followed by the current phase of internal consolidation
and growing assertiveness. Currently it is traditional Russian virtues,
such as patrimonialism and authoritarianism, as well as a modern
variant of protectionist state capitalism that seem to be the order of
the day in Moscow.

Neither has the European Union nor its member states been able to
develop a coherent policy line that would have consistently nudged
Russia in the direction originally envisaged. Instead we have witnessed
an incoherent policy line with several divergences in key member state
positions. Furthermore, the fact that there has been no efficient
carrot to whet the Russian appetite has curbed Brussels’ influence on
Russia. In the last instance, the rising prices of several key
commodities in the world markets, notably oil and natural gas, have
insulated Russia from any external economic influence, leaving the EU
with very little effective leverage over the country.

The lack of a genuinely shared understanding concerning the appropriate
logic of interaction between the EU and Russia has resulted in growing
political problems between the parties. The increasingly fraught nature
of the EU–Russia relationship has mainly played to Russia’s strengths.
It has enabled Russia to re-assert its sovereignty and walk away from
the commonly agreed principles and objectives already codified in the
PCA. But the erosion of the original central aims of the partnership
has not resulted in an atmosphere of working relations between the two.
Instead it seems that Russia has been pressing hard for concessions
while the EU seems to have mainly engaged itself in rearguard
activities, hoping to preserve what it can of the original agenda in
the hope that Russia will eventually reconsider its position and return
to the wider European fold. Thus far, this has not transpired.

Sound principles

Clearly, the EU–Russia relationship is caught up in a vicious circle of
mutually decreasing expectations. On the Russian side, growing contempt
towards the EU and its institutions can be detected. For its part, the
EU, too, has witnessed increasing calls for a serious rethink of its
approach to Russia. The advice seems to be that instead of an ambitious
partnership based on shared values and principles, the EU should seek
to cultivate a more pragmatic policy based on a commonality of certain
key interests.

At first sight this might seem like sound advice, but it does not bear
serious scrutiny. The EU is not like the United States, which can
afford to concentrate on a narrow set of strategic issues in its
relationship with Moscow. Geographical proximity and growing
interdependence are too great for the Union to remain indifferent about
the future trajectory of Russia.

Despite the fact that the expectation of Russia’s essential willingness
to follow a liberal path has proved to be largely a chimera, not all
the principles underlying the Union’s policy on Russia have necessarily
been flawed. In fact, the reverse case can be made. Although the
original expectation of a rapid convergence towards the western ideals
was overly ambitious, democracy, rule of law, good governance, respect
for human and minority rights, and liberal market principles are all
factors that are badly needed in order to ensure a stable and
prosperous future for Russia.

In addition, it may well be that Russia’s current questioning of a
closer relationship with Europe based on liberal principles is, in
fact, based on an erroneous reading of certain conjectural factors that
are unlikely to persist over the longer term. First, it would seem to
be that the current boom in oil and gas prices has made Russia look
economically stronger than it actually is. Instead of engaging in
serious economic reforms and modernization, the talk in Moscow seems to
be that maybe such reforms are not even needed, and even if they are,
the stagnant model of European “social democracy” is hardly one to
emulate.

Second, the temporary post-enlargement malaise in the EU has created an
impression that the Union is in serious political trouble and facing
growing irrelevance. Taken together, these two factors have created a
false impression that Russia is somehow economically more vibrant and
successful than the EU. In its rush to become the largest European
economy by 2020, which would require surpassing Germany in the process,
Russia has forgotten that it has very little actual chance of matching
the combined economic strength of the EU and its member states. In
addition, in the political arena, the Grand Narrative of European
integration is one of intermittent bouts of political sclerosis
followed by periods of rapidly deepening integration and growing unity,
something that is likely to persist also in the future. In this
respect, it seems certain that Russia has overestimated the extent of
the Union’s current problems and written it off much too hastily.

For these reasons, Russia’s current celebration of victory may well
prove to be premature. For Russia the EU should be a force to be
reckoned with and not trifled with. This is especially true when one
bears in mind that Russia’s sustainable economic, political and social
success will require reforms that will essentially take the country
back towards the original path of convergence with certain key liberal
principles.

In this process the EU is the only partner and agent of modernization
that is both capable of, and interested in helping Russia to succeed.
As already mentioned, the United States is too far removed from, and
not sufficiently interested in Russia to be that kind of partner. The
other currently available option, China, has not yet fully presented
itself as a credible partner in the process, while it also poses Russia
with the issue of strategic competition in Central Asia.

Finally, the case can be made that it is perhaps only now, after having
overcome at least some of the most centrifugal forces unleashed by the
dissolution of the Soviet Union, that Russia can re-embark on a course
of rapprochement with the European Union. Therefore, and if one wishes
to put a positive spin on some of the most negative aspects of Putin’s
presidency – namely the growing trend towards authoritarianism – it is
only now after stabilizing the domestic situation that the Kremlin, and
especially its new master Dmitri Medvedev, might be ready for a change
towards a more liberal direction yet again.

A change in Russia would, in fact, be required as the growing
authoritarianism and lack of effective checks and balances make the
current regime susceptible to serious economic and political
miscalculations. In this respect, the recent comments by the President
have been encouraging: the powers that be in Russia do indeed need to
engage the whole of the country in an open debate about its future.
This means, naturally, also lending an ear to voices that are highly
critical of the current comings and goings in the country. More
importantly, this would entail a clear reversal of the current trends
within Russia; away from growing control towards an increase in
liberties, the rule of law and good governance.

The way forward for the Union

What might the role of the Union be in this process? The starting point
must be the sober realization that the EU has very high stakes in its
relationship with Russia. Russia is simply too big, too near and too
important to be ignored. Therefore, and despite the current serious
political problems, the EU should extend the hand of partnership to
Russia time and time again. Any kind of scaling down of the engagement
is hardly a feasible option.
At the same time, the EU should, through its own actions, make it clear
to Russia that it deserves respect. The EU should start from the sector
that seems to be the key to the current relationship: energy. Here a
clear change in the way the Union does its business is required. The
current situation only plays to Russia’s strengths, enabling it to pick
and choose the most convenient EU partners and economically juicy
projects, making the EU look empty and hollow in the process.

By pursuing a unified internal energy market and subsequent common
external energy policy, the EU could make Russia take the Union level
more seriously yet again. There is an important historical precedent:
In the 1960s the EC started to develop its Common Commercial Policy.
Particularly from the 1970s onwards, its development essentially forced
the Soviet Union to start taking the EC more seriously as it could no
longer solely engage the individual member states in preferential
business deals as had been the case. This resulted in the gradual
establishment of ties between the Soviet Union and the EC, as well as
the process of wider rapprochement between the Council of Mutual
Economic Assistance and the European Communities in the 1980s, paving
the way for the dissolution of the Soviet empire and the eventual
association and accession of Central and Eastern European countries
into the Union.

It is not far-fetched to imagine that the same could happen again with
Russia in the case of energy. A unified market and common energy policy
would force Russia to deal more at the Union level instead of going to
individual member states. And even if it failed to bring about a
miraculous change in the Russian attitude towards the Union and its
agenda, it would at least deprive some of the main culprits – Russia
and the member states alike – of the chance of exploiting the economic
and political deals cut at the bilateral level to the detriment of the
common EU approach to Russia. Perhaps even more importantly, by making
Russia play the market in the energy field to the full, the EU would
also be able to diminish the potential scope for the Kremlin to use
energy as a political weapon. This would do away with the single
biggest concern relating to the Union’s large and growing dependence on
Russian resources, paving the way for a reciprocal and mutually
beneficial relationship in the field of energy.

However, a successful EU–Russia relationship should obviously extend
far beyond the energy question. The EU must not let Russia shirk its
commitments concerning certain liberal values and principles, no matter
how difficult the issue might currently be. The EU should also keep in
mind that more is at stake than ‘just’ its relations with Russia. In
essence, the EU is in danger of losing its legitimacy in the eyes of
its other partners. One may ask, and with good reason, on what grounds
the Union expects its other neighbours to heed its normative agenda and
conform to the intense political conditionality and scrutiny implied
by, for example, the European Neighbourhood Policy, if it has allowed
its biggest and perhaps most important neighbour to walk away from that
table?

None of this should be taken to imply that the Union should go on the
offensive towards Russia. Instead, a more moderate and essentially
conservative stance is required. The EU should seek to consolidate its
own energy policy, while insisting that any relationship beyond that
sector must conform to a certain liberal baseline. At the same time,
the Union should shy away from taking steps that would result in a
drastically reduced scope for interaction with Russia in the future. In
this regard, the EU should refrain from rushing into a new post-PCA
agreement if it only meant codifying the current mood of pessimism and
resulted in a less ambitious agreement than the one the parties have at
present. The question of a new agreement is far from pressing: the
current agreements and documents adopted by the parties provide them
with ample scope to take the relationship forward in a mutually
beneficial way.