Examination of Witnesses (Questions 20
- 39)
THURSDAY 19 JULY 2007
Sir Mark Lyall Grant, Mr Michael Davenport and Mr
Jasper Thornton
Q20 Lord Hannay of Chiswick:
You do not think there is any residue of the Soviet attitude towards
the European Union which was actually hostile to it and which
preferred to deal with the individual Member States of Europe
and pursued soullessly, for the whole history of the Soviet Union,
a policy of not dealing with the European Union as such, but dealing
with the individual Member States, a policy which was pursued
quite successfully by the Soviet Union throughout its existence?
You do not think there is any residue of that?
Sir Mark Lyall Grant: I think there may be some
residue of it, my Lord, in terms of their wanting to engage with
individual Member States as well as the Union as a whole. I do
not sense any hostility to the concept of the European Union,
but I think they probably feel that the recent accessions of countries
that were either in the Warsaw Pact or indeed members of the Soviet
Union at one point, the accession of those members, they may feel,
has changed a little bit the centre of gravity or the nature of
the European Union. It is true that those countries that perhaps
live closer to Russia and know Russia extremely well do bring
to bear in the European Union discussions on Russia a particular
viewpoint and that has sharpened up the debate within the European
Union about Russia. Obviously they bring a lot of expertise to
bear, but they also bring their own unique points of view to bear
and Russia may feel that that has shifted the centre of gravity
a little bit within the European Union.
Q21 Lord Lea of Crondall:
Could I just ask why it is that no one so far has mentioned ideology
in all of this? For many, many years, the whole of my life virtually,
certainly in the trade unions, the reason a lot of people were
against the EU was that the Communist Party, taking the Moscow
line, influenced a lot of people and the idea was, "This
is a market economy which is certainly something we are trying
to destroy and, come the revolution, of course we will have communism".
Now, are you saying that ideology is nowhere at all in any of
this anymore? I do not mean that particular ideology, but is there
any ideological difference from what we might call the "European
model" for which, after all, we did not specify everything
in detail, but there is the whole question of no government aides,
of public procurement rules and there is a list about a mile long,
is there not, but the opposition to that could be ideological
to some extent, could it not?
Sir Mark Lyall Grant: It could be, my Lord,
but I do not sense a very strong ideology emanating out of Russia
today. I visited Moscow a few weeks ago and I did return with
a sense that there was perhaps a missing strategy somewhere in
Russia's long-term global positioning. This is just my subjective
judgment of course and others will have different views and I
do not know if the Russian authorities would disagree with that,
but I did sense that a lot of the moves adopted by Russia recently
are tactical rather than strategic and it was difficult for me
at least to define where the longer-term Russian strategy and
ideology is. In the past, as you say, my Lord, it was very clear
where it was and it was there and it was a manichaean struggle,
but I do not sense that now. There is clearly a nostalgia in some
official circles for the past and there is clearly a frustration
amongst some officials for what they perceive as humiliations
of the 1990s, but I do not think one would say that that is an
ideology that unites all the Russian authorities. I confess, I
am at a slight loss.
Mr Davenport: I think that is absolutely right,
what Sir Mark has said. If there is an ideology, I think it is
closer to a nationalist one, a nationalist, statist one. The rejection
of communism as the way of running the economy is pretty wholesale,
and of course there is a Communist Party still operating which
secures very small-scale support. What tends to unite the mainstream
of the Russian political spectrum is a nationalist bent and a
sense of the importance of Russia's strength and position in the
world.
Q22 Lord Swinfen:
How do you think that the Russians see the relationship between
the EU, on the one hand, and NATO and the United States, on the
other?
Sir Mark Lyall Grant: Again, my Lord, it is
a difficult question really for me to answer. I think Russia finds
it easier to deal with the United States. They feel that deals
can be done, bargains can be made, there can be more cross-cutting
sort of strategic discussion at the very highest level with the
United States than there can be with Europe where their dialogue
tends to be a little bit more siloed into individual sectors,
and doing deals with a union of 27 members is obviously slightly
more difficult. I think, as I mentioned before, that they would
like to use the European Union more as a forum for discussion
of security and disarmament issues perhaps than the NATO-Russia
Council, which again they find quite a difficult environment.
They do not see it as a single body of 28 but as a body of 28
plus one and, therefore, they feel a bit sort of ganged up on
in that context. Also, they are perhaps jealous of the United
States' relationship with the European Union, which they feel
is a sort of smoother relationship and one where less disagreements
surface in the EU-US relationship than do in the EU-Russian relationship.
Now, we within the European Union know that the EU-US relationship
is by no means straightforward, particularly when it comes to
trade issues, but, nonetheless, I think the perception in Moscow
would be a bit different.
Q23 Lord Swinfen:
Do you think that they would see the EU and NATO as one bloc?
Sir Mark Lyall Grant: No, I think, my Lord,
they do distinguish very clearly between the two because of the
membership of the United States in one but not the other.
Q24 Lord Anderson of Swansea:
Perhaps five years ago they were trying to boost the OSCE, seeing
that as an organisation which did not include the US and in which
they could have decoupled Europe from the US. Clearly, because
of their dislike of the election-monitoring and so on of the OSCE,
that has lost favour. Which of the various organisations, NATO,
the EU and the OSCE, is currently in favour, if there be such?
Sir Mark Lyall Grant: I think you are right
that their enthusiasm for the OSCE has declined rather in recent
years and perhaps the Council of Europe too because of the election-monitoring
activities and focus, particularly of the OSCE. I would suggest
perhaps that the G8 and the UN Security Council are organisations
where Russia feels less outnumbered and more empowered with more
levers than the other ones that you have mentioned.
Q25 Lord Hannay of Chiswick:
You have begun to answer, I think, the question which I was going
to put about the current institutional framework of the EU-Russian
relations and I take it that the present agreement just goes on
and is maintained until a new one is negotiated and it does not
lapse just because we have reached the end of the 10-year period,
but I wonder if you could also comment a bit on these rather strange
animals called the "four common spaces". I thought that
Lord Howe some years ago had driven a stake through the attempts
to translate "espace" as "space" and
it should be translated as "area" and I take it that
that is actually what is meant by the "four areas of policy"
which are dealt with and it is a pity that "space" has
crept back in again, and it is now more a hobby horse of mine
than Lord Howe's. Do they work? Are they really an effective means
of discussion and common effort and co-operation or are they just
kind of bureaucratic wheels that spin round?
Sir Mark Lyall Grant: My Lord, perhaps a mixture
of the two, but, just to confirm your first point, the existing
Partnership and Co-operation Agreement, although initially running
for 10 years and the 10 years is obviously up this year, does
continue until it is replaced by something else. If we were to
overcome the Polish meat blockage immediately, it would still
take probably six, nine or 12 months to negotiate the new agreement
and then another year or so to ratify it, so the existing arrangement
will run for at least a couple of years even in the best overall
context. In terms of the four common spaces, they were added in
in 2003 and do cover four distinct areas: economy; freedom, security
and justice; external security; and research, education and culture.
I think they have had some benefit and they were reinforced in
2005 by the additions of the roadmaps of how you should implement
these different common spaces, but it has become quite a bureaucratic
exercise, there is no question. It does have some advantages,
and the main one I would characterise is that you can make progress
in one area, even if there is blockage in another area, so I think
that is a good aspect of it. However, the inverse is also true,
that it can operate a little bit in silos and, therefore, it is
less easy to take a strategic overview of the relationship as
a whole when different parts of the bureaucracy are operating
in these different silos and going their own merry way. It is
very resource-intensive, it is bureaucratic and we would hope
that the new agreement, if it is ever finalised, would enable
a slightly more strategic approach and allow for the linkages
between the different areas, whilst at the same time allowing
some flexibility to make progress in areas where it appears to
be easier than in others.
Q26 Lord Crickhowell:
So far, we have really been looking at Russian perceptions, attitudes
and policies towards Europe and its Member States and you have
spoken about some Russian frustration and a feeling that they
are held to ransom by individual bilateral disputes. You were
also beginning to touch on British policy and the need to sharpen
up some areas, such as the legal framework. I really want to reverse
the whole process now and look at what the British Government's
priorities are for the development of the EU-Russian relationship
and how far they are accepted by the other members of the European
Union and what are the main areas of agreement and disagreement
between the Member States, so let us really start the process
of looking at Europe's approach to Russia rather than the Russian
attitude to Europe, please.
Sir Mark Lyall Grant: The British Government
position is that we believe it would be useful to have an updated
Partnership and Co-operation Agreement. But we support the Polish
Government, because we believe that the Russian ban on the import
of Polish meat and livestock is unjustified. It meets the EU phytosanitary
criteria and we do not see any justification for Russia continuing
with that ban any more than we see justification in Russia continuing
some aspects of the ban on British beef, which is still going
on, so we hope that Russia will lift that ban on Polish meat which
would enable then the mandate to be concluded and the negotiations
to begin on the new agreement. The reason that we want the new
agreement is that we do believe that some of the developments
over the last 10 years do need to be factored into the new agreement,
and I mentioned one or two of them earlier, including the fact
that it would give it sharper dispute-resolution mechanisms, it
would give it a more secure legal framework than the existing
arrangement and have a greater emphasis on migration, on counter-terrorism
and on energy than the original agreement had, which are all areas
which have grown in importance over the last 10 years. But, equally,
we have our own difficulties. The current dispute that we have
with Russia over Alexander Litvinenko is well-known and we have
been grateful for the EU solidarity that has been shown. They
issued a very good statement on 1 June and another very good statement
yesterday of support for our position. We have not sought to hold
up the mandate of the new PCA for that, but we have secured agreement
within the European Union that there would be an annex to that
mandate which would flag up the Litvinenko issue and say that,
in the context of the discussions of the new agreement, there
needs to be some discussion of the issues around the justice system,
the human rights aspects and the legislation of Russia which does
allow for direct action taken against Russian exiles overseas,
so those are issues we will want to discuss in the negotiations
and we will flag that up in the mandate, but we are not seeking
to hold up an agreement to the mandate on that basis.
Q27 Lord Crickhowell:
That is the British Government's approach and the other part of
the question I asked you was about whether there any great differences
between the European countries. Are they taking a general line
or are other of our partners going in a different, significant
way?
Sir Mark Lyall Grant: Well, that is an agreed
position of all the EU Member States and, as I mentioned, EU solidarity
is an important aspect of membership of the European Union to
which all the members very strongly subscribe, but it will not
come as any surprise to this Committee that there is a spectrum
of views among the different EU Member States. I mentioned some
of the newer Member States from Eastern Europe and from the ex-Soviet
Union, who have a particular viewpoint of Russia and of the trends
in Russia over recent years which may be rather different from
the views of those on the Iberian Peninsula, for instance, and
that is natural in a union of 27 members, but we seek to resolve,
and I think we are reasonably successful in resolving, those sorts
of differences internally and we are very resistant to any suggestion
or attempt by outsiders, whether it be Russia, the United States
or any other third country, to try and drive divisions between
the members of the European Union and to try to exploit any differences
of view that there might be.
Q28 Lord Lea of Crondall:
It is well-known that in the Treaty negotiations we had a red
line about how far common foreign policy should go. The Russians
are aware of the role of Mr Solana, not least in the quartet which
we will come to later, but in all the myriad things which are
happening. My question would be: could it be that it is much easier
for the EU to have a common policy on China or Africa or some
other part of the world, Latin America, precisely because former
communist states do not have the same perception? Of course Germany
in particular, and I could mention half a dozen, is 60 per cent
reliant on Russian gas already, so are there short-term differences
of interest as well as, what you might call, more strategic problems
about putting all your eggs in the Solana basket?
Sir Mark Lyall Grant: My Lord, I am not sure
the two aspects of your question are linked quite as closely as
you are suggesting. Clearly, Solana is an important figure within
the European Union and that role will continue—
Q29 Lord Lea of Crondall:
It can be strengthened?
Sir Mark Lyall Grant: Well, it will be strengthened.
Q30 Lord Lea of Crondall:
How do you think it will be strengthened in reality?
Sir Mark Lyall Grant: Well, I think we are getting
on to slightly different territory now.
Q31 Chairman:
We are really not discussing the Treaty today, we are discussing
relations with Russia.
Sir Mark Lyall Grant: Solana is an interesting
figure who does go wider than just the European Union. As an example
of that, in the Iran context, Solana is operating on a mandate
from the E3+3 which includes not only Russia, but also China and
the United States as well as the UK, France and Germany, and Solana
is the designated spokesman in direct negotiations and discussions
with the Iranian authorities on the nuclear question, so in a
sense Solana is operating on behalf of Russia in that particular
context. Now, that is a one-off, ad hoc arrangement now, but I
can see that sort of formula being used in the future, maybe in
the near future if it comes to Kosovo, for instance, so that,
I think, is one aspect of the question. But Solana, when he is
operating on behalf of all the EU Member States, takes his instructions
from the Council and the Council comes to a view. Solana cannot
operate independently from the Council and nor will he be able
to even after the Treaty amendments are agreed, if they are agreed,
so he will still be a representative, as it were, of the wishes
of the Member States as a whole. If there are such radical differences
between the EU Member States on a particular issue, such as Russia,
that Solana is not empowered to put forward any particular policy,
then that is the reality of the situation. But I would underline
myself that, from our point of view, an EU common policy and common
positions are even more important in respect of the near neighbourhood
than they are of those areas further away. It may be easier to
have a common position on Burma or even China than it is on Russia
or North Africa, but I would argue that it is actually more important
for the EU to have a united and common position on North Africa
and Russia than it is on those other ones.
Q32 Lord Anderson of Swansea:
Education—in the 1960s, there was a perception that we in
the UK did not understand Russia enough and a lot of money was
put into our universities and, alas, much of the effort then evaporated,
but is there a view in the European Union, not just in the UK,
that there should be a similar process to boost the education
exchanges, the study of the Russian language and civilisation
within European universities? Is there likely to be more money
available for the same purposes as we put money in in the 1960s?
Sir Mark Lyall Grant: My Lord, I might ask my
colleague whether he can answer that question.
Mr Davenport: My Lord, one part of the framework
for the EU-Russian relationship, precisely one of the four common
spaces, is devoted to research, education and culture and within
that umbrella this enables, in particular, the European Union
and European Commission funding to be directed towards commonly
identified areas, and that includes certainly mutually agreed
academic links precisely with a view to boosting cultural and
educational ties between Russia and individual Member States of
the European Union, including through programmes like Tempus.
In terms of the education systems of the Member States actually
fostering the teaching of Russian culture and the Russian language
and so on, I think that is an extremely important point to make.
I think it is not specifically an area where EU funding is being
directed to any great extent.
Q33 Lord Anderson of Swansea:
Could it be?
Mr Davenport: What I was going to say was that
the British Council independently has been working with the Yeltsin
Foundation and only very recently launched a programme over the
next three years for boosting the teaching of Russian in the UK.
I think that this is very important because you are right in identifying
this as a lack, and the teaching of Russian language, literature
and culture has declined.
Q34 Lord Anderson of Swansea:
It has collapsed.
Mr Davenport: Here it has collapsed; in other
countries it has been maintained at a higher level in some cases.
But that is something which should be corrected.
Q35 Lord Boyce:
I think you have largely answered much of what I was going to
ask in my question but just to knock the nail out of sight, you
have implied certainly there is solidarity with the EU towards
individual nations in national disputes, you mentioned Poland
and our own present one. Could you say whether or not you are
happy that solidarity is shown when individual nations do have
disputes? Do you think, particularly in the case of the new Central
and Eastern European States, sometimes that solidarity can lead
to a distortion to the rather purist view which one might take
of what the EU policy should be towards Russia and does get shifted
to other ground in our policy because we are actually trying to
provide solidarity with these indigenous people?
Sir Mark Lyall Grant: No, my Lord, I do not
think "distorted" is right. Solidarity is an important
principle, you mentioned Poland and the United Kingdom; there
are others I could mention, Lithuania and Estonia and the recent
difficulties over the moving of the statue of the Soviet war dead
and the reprisals which Russia took on that. Clearly there needs
to be a balance, but I think that balance can be achieved within
the European Union. European Union members might have different
views on the wisdom or tact with which Estonia took the action
that it did in the capital, but the Russian response in terms
of the harassment of the Estonian ambassador in Moscow was so
disproportionate that obviously that brought together greater
unity and solidarity on the part of Member States. To some extent
solidarity has to be earned and reasonable. It would not be fair
to expect solidarity if there had been no consultation, for instance,
on the issues as they arise but, nonetheless, it is an important
principle of the European Union, we attach a lot of importance
to it and I think most others do as well. We are grateful for
the support we have received in the most recent instance.
Q36 Lord Crickhowell:
Could we go back to energy. Right at the start we talked about
European dependence on Russian oil and gas and their need for
markets. You did briefly refer, I think, to progress on energy
issues. Could you develop a little on that? What success has the
dialogue had so far and are there any other major problems in
the energy field that you would like to draw our attention to?
Sir Mark Lyall Grant: I do not think I could
point to hugely significant progress in terms of the EU-Russia
discussions on energy; they are ongoing. Probably the most important
step forward in recent years on this was done through the G8 under
the Russian Presidency in St Petersburg in July 2006, which did
agree some energy security principles that referred to the importance
of diversity and security of supply and also market principles
and mechanisms applying in the energy sector. I think that was
probably a more significant stake in the ground, a benchmark that
was established than anything that has been done in the EU context.
It is important that we judge the attitude and actions of the
Russian authorities against the benchmarks that they agreed under
their own Presidency of the G8. Obviously we do have some concerns
about that but, likewise, the Russians have concerns about the
security of demand. They need to be clear that there are going
to be outlets for their supply just as we want to be sure that
the supply is not interrupted arbitrarily as, we believe, has
happened in a couple of cases recently.
Q37 Lord Hannay of Chiswick:
Could you tell us what the status, if any, of the Energy Charter
is which was negotiated and signed by Russia and the 27 Member
States of the European Union but never ratified by the Russians?
I have heard suggestions by representatives of the major oil companies
that they regard the Energy Charter as pretty well dead because
of the Russian objections to it. If that is effectively the case,
what is there that enables us to ensure there is a level playing
field in this area? That is, of course, what the Energy Charter
would have done, it would have meant the Russians had access to
various parts of our energy industries and we would also have
access to theirs. It appears that it is their intention we should
not have access to theirs in any ownership sense but only in the
sense of being subcontractors to Gazprom, or whatever it is. What
is the situation now, in fact, with the Energy Charter? What is
the attitude of the Government towards what needs to be done in
that area?
Sir Mark Lyall Grant: Michael, do you know about
the Energy Charter?
Mr Davenport: My Lord is absolutely right in
identifying this as a serious problem, a serious challenge. Russia
has not ratified the Energy Charter Treaty. HMG continues to regard
the Energy Charter Treaty and the principles enshrined therein
which, as Sir Mark said, in parallel with the St Petersburg summit,
highlighted the very same issues, as fundamental to developing
the sort of relationship internationally on energy that we need.
We have certainly not given up on Russia taking this forward,
we continue to press for that. It is, however, true that there
is great reluctance. Another way of pressing our UK and EU interests
in this, of course, coming back to a previous question, is the
negotiation of a successor agreement to the Partnership and Co-operation
Agreement because, as was previously highlighted, energy security
would be a key area to address there.
Q38 Lord Hannay of Chiswick:
If I could finish up on that point, presumably you would recognise
the difference between the Energy Charter and the G8 Communiqué
in St Petersburg is that one is a legal and binding set of agreements
which is to some extent justiciable and the other is just some
nice words written on a piece of paper?
Mr Davenport: Yes. You are right and we would
not give up. Of course, we would hope that the Partnership and
Co-operation Agreement's successor would be more than just nice
words.
Q39 Lord Crickhowell:
It strikes me, talking about these splendid Europe-wide charters
and other agreements, what it really comes down to in developing
and exploiting Russian oil and gas is very often the negotiations
conducted by the individual oil companies and the relationships
that they establish. Clearly they have not always been very easy,
they think they have got somewhere and then suddenly find they
have not quite got it. Presumably, at the end of the day there
are these general approaches that a lot will depend, will it not,
on the success that individual oil and gas companies have in reaching
deals? Presumably both the European authorities and, indeed, the
British Government keep in very close touch with all these negotiations.
Would you comment at all about the distinction I am trying to
make between the general agreements, general approach and general
policy, and the way it is developing as far as the individual
transactions are concerned?
Sir Mark Lyall Grant: You are right, my Lord,
there is a certain asymmetry here because within Russia Gazprom
has accumulated more and more control over the hydrocarbon sector
as a whole and Gazprom is controlled increasingly closely by those
in the Kremlin. That, of course, is not the situation for the
oil and gas sector internationally and certainly not in this country.
Therefore, in these individual negotiations they are between large
private sector companies and, in essence, the Russian authorities,
sometimes at one remove, sometimes not at one remove. Of course,
the British Government—and no doubt other European governments—keep
in very close touch with their major companies both here and in
Moscow about developments and the progress of those negotiations
and, indeed, the changes there are in those negotiations, but
we do leave it to the companies to judge whether they feel they
are operating on a level playing field or they are being treated
fairly. If they want support from the British ambassador or the
British Government, then of course we offer them that support
at the highest political level, and have done so on numerous occasions
in recent years, but at the end of the day the Russians recognise
that they do need Western investment and technology. No doubt
if they did not, maybe they would not be offering the deals that
are available to Western oil and gas companies that they do. They
need that investment and their technology transfer, so it should
be a win-win situation for both sides.
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