Select Committee on European Union Minutes of Evidence


Examination of Witnesses (Questions 100 - 119)

THURSDAY 18 OCTOBER 2007

Miss Katinka Barysch

  Q100  Chairman: Good morning Miss Barysch, you are very welcome again. We have seen you on a number of occasions before. You are now batting single-handedly because Charles cannot be with us this morning. You know the rules; we are taking a transcript of the evidence and we will send you a copy of the transcript as speedily as we can. We look forward to you annotating it if you do not think it accurately reflects what you said, or intended to say, and letting us have it back. If I can start off on a fairly general range of things, which will give you the opportunity to make what in effect is an opening statement: what do you think are and should be the fundamental objectives of EU policy with regards to Russia? What does the EU have to offer Russia in the context of a negotiation, and how can it best influence Russian thinking and policy? Linked with it, trying to do it for the other side, how do you think that the EU is perceived from a Russian perspective and what are the underlying principles of Russian foreign policy towards the EU, so a fairly general introductory range of points?

  Miss Barysch: I believe that the EU is currently in the process of re-thinking its relationship with Russia. For many years we thought, and we should be forgiven for thinking, that Russia, just like most of the other Central and East European countries, was on a fairly linear path towards democracy and an open capitalist economy. A more difficult path perhaps with more setbacks, but we did believe that that was the way Russia was going, and at one point in time Russia itself believed that that was where it was going. What the EU thought it should do was it should offer help and advice and its own best practice, if you want, to help Russia along that path towards democracy and open markets. For most of that time that we tried to help, Russia has gone in the other direction, but it took us an awful long time to realise that what we were trying to do was not actually working. It was very difficult for the EU, partly because it is attached to its own values, of course, and partly because it is a very complex organisation, to re-think that position. We are now in that process of re-thinking and you see a mixture of attachment to the old strategy and the need to come up with something which is perhaps more realistic. You see that mixture in all the documents and statements that currently come out of the European Union where we still talk a lot about values, and we still push what we perceive are our interests and needs, particularly with regard to energy and security and stability in our common neighbourhood, to the forefront.

  Q101  Chairman: Can I just follow on that briefly because you said that it took us a long time to recognise that that linear path towards democracy was not going quite as directly as it should be and might even be going in a different direction in part; was that because we were looking through rose-tinted spectacles at Russia and only seeing what we wanted to see? Do you think there were signs there that should have been recognised earlier?

  Miss Barysch: Perhaps. I do believe we saw what was happening in Russia but perhaps we did not believe it, and again Russia itself did not say, "We have discarded democracy, we are now practising a different model." Russia insisted on calling itself a democracy and to the present day Russia insists on calling itself a democracy. There is always a prefix nowadays calling it a "managed" democracy, a "sovereign" democracy, a "Russian-style" democracy. The striking thing about Putinism for me is that he always insists on leaving the full institutions of democracy in place. He hollows them out but he has not touched Parliament and the formal system of checks and balances. Just consider his clinging to the Constitution, he says, "I cannot continue ruling this country as the President because the Constitution does not allow me." Everybody knows that he is looking for a way to do that anyway, but because Russia never said that it did not care about democratic rules and standards but formally insisted that it was a democratic country, and that it did respect human rights and the principles of democracy, it would have been very difficult for us to make a grand statement about saying, "You now no longer are a member of the club; we have to change our strategy."

  Q102  Chairman: Just before bringing in Lord Anderson and Lord Hannay, can I ask you on the other part of the question: how is the EU perceived by the Russians? From a Russian perspective what do they perceive the EU to be and what are the underlying principles of Russian policy towards the EU?

  Miss Barysch: I think there is a slight difference between the Russian political elite and the Russian people. The Russian people traditionally had a rather positive view of the European Union. That has now changed. There was a rather worrying opinion poll that was conducted not too long ago at the behest of EU Russian Centre in Brussels, where they found that the Russian people now have a much less positive view of the European Union. They perceive it not as something they want to join but as a threat to their economic independence. I think now that only a third of all Russians think that Russia should build a long-term friendship with Europe. At the level of the political elite, my impression for the limited period that I have been working on this issue—which is about five years now—the Russian political elite has always been somewhat disdainful of the European project, simply because I think they have a slightly different attitude towards what power is and how it should be exercised. I am under the impression that a lot of the officials in the foreign ministry and in the Kremlin have a somewhat old-fashioned attitude towards power: it is about the unity of the state; high politics is about security, it is about territorial integrity, it is about sovereignty. If you look at the EU, which is policy-making by committee, it is post-modern, it is mainly about economics, and the two sets do not fit very well together. The Russian politicians always like to say, "Europe is too complicated for us to deal with and we need to deal with the Member States." To my mind, that view has changed little over recent years. What has changed is that Russian politicians now deem it perfectly acceptable to be very outspoken about their views on Europe.

  Q103  Lord Anderson of Swansea: Our focus as a Committee is of course on the European Union, but do you see any parallels with that of NATO and the NATO-Russia Council in that one began with rather expansionist views which are now seen to be illusory, and both are now scaled down, and that just as in NATO where there has been progress, it has been in specific, often specialist areas—air-sea rescue, which Lord Boyce will know about—and perhaps, equally, within the EU we should abandon the rather grandiose concepts and look for areas equivalent to air-sea rescue where we and the Russians have a clear common interest in working together?

  Miss Barysch: I think it is very interesting to explore those parallels. The starting positions were probably a little different because Russia saw NATO as an adversary, so you started from the idea of a rapprochement, whereas the EU and Russia started from the idea that we are already living in a common European house, and then we started drifting apart, so the whole thing is somewhat more emotional, at least on the European side at the moment. It is entirely true that in the EU/Russian relationship we are moving away from that grand rhetoric. It is partly because the key ingredients of the EU/Russian relationship are so uncertain. Firstly, we do not know where Russia is going and Russia itself does not know that. Secondly, we do not know where our common foreign and security policy is going. We obviously have internal divisions in the European Union, and now even more so after the enlargement of 27 countries, which does not make it any easier for us to deal with a country that is changing fast and might be going in a direction that we neither like nor understand.

  Q104  Lord Anderson of Swansea: Have you accepted the principle of seeking to isolate specific areas rather than grand plans where we can work together?

  Miss Barysch: Yes, that is very much the basis of the common relationship, because if you look at what is happening on the institutional side, the basic legal framework for EU/Russia relations is still the Partnership and Co-operation Agreement, which is out-of-date. But we have moved away from the plan of replacing that with another ambitious and grand bilateral agreement and what we are working on now is the so-called "four common spaces," which is basically a list of projects and areas where if we can work together we will work together. This is a very flexible framework, a "whatever works" framework that allows us to make progress wherever progress is possible.

  Q105  Lord Hannay of Chiswick: I wonder whether if in this rather general part of the discussion you could situate the issue of Russia as a conceivable member of the European Union in these perceptions from the two sides? To what extent was the earlier European perception, which you rightly characterise as now being out-of-date, conditioned by the view that perhaps one day Russia might aspire to membership and that therefore the path which it was on was not totally dissimilar to that of other countries who were aspiring to membership? On the Russian side, perhaps there were similar desires to give reality to the rhetoric of the common European home and so on. Could you also comment on the view expressed, I thought very cogently, by that booklet written by Strobe Talbott and Rod Lyne and a Japanese whose name I cannot now recall, called Engaging with Russia, which argued that however unrealistic it is, and indeed how undesirable it is to think of Russia as a member of the European Union, it would be a great mistake for the European Union to say flatly Russia cannot ever be a member of the European Union?

  Miss Barysch: As far as I am aware, there has never been a serious discussion on either the European side or the Russian side that Russia should join the European Union. I think to have such a discussion at the present point in time or in the foreseeable future would be unrealistic first of all because the European Union itself is still struggling to digest the last enlargement. We see that in the discussions we are having about taking in the Western Balkan countries or Turkey, which is a country which is not as large as Russia but it is a sizable country, and the mere idea of admitting Turkey strikes panic in the hearts of those who still believe in Europe as a political project, and it is also controversial economically, so from the European side the idea that we could take in a country with 11 time zones and a country which at the moment is so far away from fulfilling the Copenhagen accession criteria simply does not warrant the discussion. Even with a country such as the Ukraine, which has a much better prospect of one day joining the European Union, we are not making any promises, for the simple reason that these promises would not be realistic. If you look at the EU's internal debate further enlargement beyond those countries that are candidates is a distant prospect or a possibility, but to talk about it does not serve any particular purpose because it is just not on the cards. From the Russian side also, joining the European Union is not a very attractive prospect. Russia, as I tried to point out, is attached to old-fashioned notions of foreign policy-making. It likes to be a member of clubs where the "big guys" meet. It likes to be a member of the G8 because that is where the world leaders meet, that is where great powers talk to each other. It likes to deal with the European Union as a whole because it has woken up to the fact that the European Union is an entity that at least has to be taken seriously at some level. If Russia were to join the European Union it would be one member of the club. The EU, at least in principle, tries to uphold the idea that all Member States are equal. For Russia the idea of sitting somewhere between Portugal and Latvia and having the same say as these countries is completely inconceivable. It would be a very different Russia that would perhaps one day want to join the European Union. Another area where the EU and Russia are very different arises because the EU is the epitome of a legal community and everything we do is based on the rule of law. Russia has a very different attitude towards the rule of law and the implementation and enforcement of law in Russia are a huge problem. So long as that is the case, I think even the idea of integrating Russia and the EU more closely is very difficult. Then, as I explained previously, in order to just gain candidate status a country has to comply with the political part of the Copenhagen criteria which say that you have to have a well-functioning democracy, respect for the rule of law and minority rights; and none of these things apply in Russia at the moment.

  Q106  Lord Hannay of Chiswick: I am awfully sorry to continue but you have not actually replied to the question as to whether it would be a mistake for the European Union to say flatly now—and this is the concept that President Sarkozy sometimes pursues of drawing a line—that Russia is on the other side of the line, not because it does not fulfil the Copenhagen criteria but because we do not believe that it is conceivable that it could become a member of the European Union, perhaps with some specious arguments about some of Russia being in Asia. I am sorry to press you on this but it is quite useful to know this because the Strobe Talbott "red line" argument was very powerfully that that would be a mistake, even though you have explained (and I think I agree with you) that it is quite unrealistic?

  Miss Barysch: That is a very good point. I think absolutely no purpose is served by drawing red lines around Europe. I have made that argument in another context with regard to Turkey because I am in favour of Turkey joining the European Union, and also for those countries that we are not giving so-called membership perspective to at the moment, such as the Ukraine and perhaps Moldova. I think absolutely no purpose is served because on the one hand if you invited Russia to join the European Union it would be horrified, but if we made it clear to Russia that it would never join, it would be equally horrified. I do not think any purpose is served by drawing borders around the European Union and you probably do not need to answer the question of the potential membership of Russia.

  Q107  Lord Lea of Crondall: I suppose you could draw up a list—and maybe you could do it or somebody in Brussels might do it—of what are the matters where there is specifically right now an EU/Russia relationship and illustrate it to show a multiplicity of things that we could be talking about. We have just done a report on the Middle East peace process and looked at this strange animal called the Quartet, and for a long time Russia was a silent party, but now of course it is developing a slightly independent policy not only on Hamas but also, not a million miles away, on Iran. Do you think that if we draw a blank on Lord Hannay's direction of probing, we could use a long-standing term (not in this context) "special relationship" and see what would be the content of that special relationship? Clearly there is the Kyoto emissions trading where because of the pipelines there will be a huge amount of specifically EU relations, certainly not bilateral. Would you comment on would there be such a list that somebody could draw up at the moment? What is the content and the number of things where the EU actually has a joint role with Russia and could you categorise the sorts of things?

  Miss Barysch: Could I just ask for clarification purposes, are we looking for areas where the EU has dealings with Russia as opposed to the EU Member States' dealings with Russia, or are we looking at the international scene where the European Union's and Russia's interests coincide as opposed to, let us say, the United States and China?

  Q108  Lord Lea of Crondall: The first.

  Miss Barysch: Then you would have to probably start by looking at what are specific EU competences and take it from there. Russia started taking the EU seriously through trade negotiations because before that, as I said, Russia found it very difficult to understand the EU as a political animal. When Russia got a bit more serious about joining the WTO, it suddenly found out that Brussels matters because Brussels conducts the negotiations, not the Member States, and Moscow had always tried to lobby in the individual capitals for special deals in its trade negotiations and it found that it had to deal with the Trade Commissioner in Brussels. That is when Russia first woke up and saw that the EU actually matters. Then the Europeans were starting to construct a common foreign and security policy. Russia in the beginning did not know what to make of that. It then started taking it terribly seriously and now has moved a little bit in the other direction. What are the specific ingredients? Trade certainly, but we have now struck a deal for Russia's accession to the WTO and we are thinking beyond that already, whether we could have a free trade area with Russia perhaps. That is an area where Russia will have to deal with the European Union as opposed to the Member States. We are trying to refocus Russia's attention in the energy sector where at the moment it engages in tried and tested divide and rule tactics where it tries to forge special energy relationships with the individual Member States. At the same time, the European Union is trying to build a more coherent and integrated energy policy as such, so there are two forces that do not quite work in the same direction but, hopefully, if we get our act together in Europe then we would have an EU/Russia energy dialogue and not a German/Russian energy dialogue, a British/Russian energy dialogue and so forth. Another area that springs to mind is the common neighbourhood. The European Union is still in the process of constructing what is called a European Neighbourhood Policy at the moment. It is still at the initial stages, it is not very well resourced, and the incentives are probably not strong enough to make a great difference in the neighbourhood, but again that is an issue where the EU as a whole should act and interact also with Russia and its neighbours. Lastly, as you pointed out in the international area, the Europeans are trying to do things together such as for example in Iran, but obviously Russia deals with the big three Member States.

  Q109  Lord Lea of Crondall: The Quartet?

  Miss Barysch: And the Quartet. You also mentioned climate change where the EU as a whole takes a position, but on climate change Russia is not at this present point in time a big player because although it has signed the Kyoto Protocol it is not one of the countries that is at the forefront of the climate change debate. It might one day be—

  Q110  Lord Lea of Crondall: Is not the lengthening and deepening of such a list going to look quite formidable as the years go by?

  Miss Barysch: We have been pointing out to Russia and Russia has never disputed that we have multiple common interests that force us to work together. When it comes to a special relationship I think we do have a special relationship. Russia is our biggest neighbour and we share this potentially unstable neighbourhood. Both Europe and Russia have a strong interest in having stable and prosperous countries along their borders, so that is where we should work together. Energy obviously. Russia sometimes says that we do not agree on what energy partnerships should look like and they say they will sell their energy to the Chinese or the Americans. At the present point in time they simply cannot do that because all their major pipelines go westwards to the European Union, so that special relationship is very much there. What I was always struck by is, despite these various common interests, how difficult our day-to-day relationship often is.

  Q111  Lord Hamilton of Epsom: To follow on Lord Hannay's point about membership of the EU, one of the unhealthy things about Putinism is that he seems to have developed a paranoid nationalism in Russia, an "everybody is against us" attitude, which goes down quite well with the Russians but is extremely unhealthy from the point of view of the EU and its relationships with Russia. Should we not be putting on the table that we do see them as members of the EU ultimately? I do not think there should be any sort of timescale, we are looking way into the future, but you have talked about the Ukraine and Moldova, if they start the process of EU membership it is going to increases the paranoia in Russia that they are the only people who are not part of this. I just think that makes the thing worse. Surely we should be pointing out that we would like one day to see Russia in the EU? Maybe it will never ever come to anything. It is gesture politics but I think it is terribly important for the EU to say, "We do not think you are an alien country who is just so much on our borders that ultimately you cannot be a member of the club".

  Miss Barysch: That is an interesting idea but I am not sure I would agree with it. I have been a strong advocate of shifting the EU/Russia relationship away from grand rhetoric and towards more realism. We have spent many years pretending that EU/Russia relations are something they are most obviously not. We are now talking about a strategic partnership. I am not sure that we share many strategic objectives and the way we deal with each other on a day-to-day basis does not always look like a partnership to me. Whilst the relationship is tricky and whilst Russia is in a transition period, I just do not see how we could credibly claim that we want Russia in the EU, even in the long term. Russia has no interest in that prospect at the moment. Even if the EU said that at the political level, it simply would not be credible, so although I agree with Lord Hannay that we should not rule it out, if we now made a statement saying "but one day we want Russia in the EU", I do not see what purpose would be served by that.

  Q112  Lord Hamilton of Epsom: Let us turn to the Ukraine. The Ukraine is not a suitable candidate to be a member of the EU today, but nobody would rule out the Ukraine ultimately being a member of the EU.

  Miss Barysch: The Ukraine has for many years expressed a strong interest in one day becoming a member.

  Q113  Lord Hamilton of Epsom: Hold on, we are not talking about the interests of the country; we are talking about whether they are suitable to be members. The Ukraine is no more suitable today than Russia is.

  Miss Barysch: I do believe that the Ukraine is a lot closer to one day becoming an EU member than Russia is. Russia sees itself as a great power. Ukrainian politics is messy but it is a democracy, of sorts. It is a reasonably diversified economy, although heavily skewed towards heavy industry at the moment. It does engage with the neighbourhood policy, which means that, at least in principle, it accepts the idea that it should take over EU rules and laws and norms. Russia does not accept that in principle. On the contrary, it is completely allergic to any idea of taking over EU rules, so I think the two countries are in a very different position.

  Chairman: I am afraid we must move on from the general discussion. I have been very liberal in allowing a very wide-ranging discussion, but I am going to be slightly more rigorous on the more specific questions. We move on to one that you have already touched on en passant but the question that Lord Hannay is going to expand on concerns the institutional framework.

  Q114  Lord Hannay of Chiswick: I wonder if you could just say how you think the institutional framework actually works. Does it produce results or is it just a lot of wheels spinning around meetings and not much in the way of results? Secondly, could you comment on whether the delay in negotiating a successor agreement stands in the way of the necessary institutional co-operation or whether the roll-over, which is explicit I think in the PCA, and which will take place now next month as I understand it, and presumably thereafter every November so long as there is not another one, whether in fact that is a perfectly satisfactory short-term state to be in, just from the institutional point of view, not from the political point of view?

  Miss Barysch: The institutional framework that we have currently in place is a sort of makeshift arrangement. Some of what was initially envisaged in the Partnership and Co-operation Agreement as a structure of expert committees and then moving up the hierarchy until you reached a six-monthly EU/Russia summit is now defunct and some of that has become an area of contention. When it comes to ministerial meetings, for example, Russia has always been in favour of having some kind of EU/Russia Council there to meet all the Member States at the same time, whereas of course the European side insists on Russia meeting the Troika. What we have done is we have been very flexible about this and under the four commons spaces we have set up a new structure of expert groups. The common spaces idea leaves us ultimate flexibility with regards to the institutions. We can have business round tables, we can have expert groups, we can have ministerial meetings, we can have standing committees, we can have ad hoc meetings, and I think in order to take the institutional question out as a contentious issue and just say "we will work with you, let us just talk, what are the objectives, which kind of institutions do we need to achieve that objective" that works fairly well. With regard to the post-PCA agreement, I personally do not think it is too dramatic that these negotiations are being held up at the moment because we have only just got going on the four spaces idea. It took us two years after having agreed on the four spaces idea to work out the so-called road maps, which list all the possible projects that could fill these spaces. We then started talking about the implementation mechanisms for these road maps. We are still in the process of doing that. I think we should give that idea of pragmatic co-operation a little more time to work. As I said, we are in a period of uncertainty in EU/Russia relations. We are in a period where, yes, Russia does exhibit a certain amount of nationalist paranoia, so at the present point in time to sit down and start yet another grand debate about common values and where this relationship should ultimately end up might be bad timing. I think we should let things settle down a bit. We should build mutual trust and everyday co-operation wherever we can achieve it and then maybe at a later point in time come back to negotiating a big comprehensive agreement with joint objectives and more fixed institution mechanisms. I think at the present point in time it is not a big disaster to roll over the PCA. The PCA is out-of-date, there is no doubt about it, but it has not held us back. When the PCA was concluded there was no common foreign and security policy, for example, yet we do have a political dialogue with Russia. We have co-operation in justice and home affairs. We have moved into all sorts of areas that were not foreseen by the PCA, so it has not held us back, we can roll it over, and we can continue that more pragmatic co-operation in the meantime.

  Q115  Lord Crickhowell: Can we move on to the question of EU solidarity or lack of it. You have painted a clear picture of rather changing Russian attitudes, starting out as disdainful and finding it complicated to deal with, then for example on trade negotiations recognising they had to take it seriously. You have said that they now rather like to deal with the EU as a whole. The truth is they also like to take advantage of the lack of solidarity and deal with the individual states when it suits them. Is there a need for greater unity and coherence of approach amongst the Member States towards Russia? You have painted the Russian change of attitude; what would your comments be about how Europe sets out to deal with it?

  Miss Barysch: There is clearly a need for greater solidarity for our own sake because the EU is obviously based on the idea that we have common objectives and common interests in foreign policy and in energy policy and in the other areas that affect our relationship with Russia. Disagreements over Russia have in recent years sometimes poisoned the atmosphere. That is not very healthy for the European Union because it could spill over into other areas of co-operation. It is also very important that we stand more united in Russian eyes because the way we are divided at the moment, the Russians can almost claim, "We cannot deal with the European Union; there is no EU position, you are divided, you are complicated; we have to deal with the Member States." When Russia says "Member States" of course it means the big Member States, not the small Member States. That then reinforces the EU internal divisions because the smaller, newer Member States think that their interests are not being taken into account when the EU deals with Russia, so there is an urgent need for more of an internal debate about what the individual Member States want and need from Russia. We have done surprisingly little in this respect. We have various forums where the Member States can meet and talk about their attitudes towards Russia and what should be done, but somehow this has not worked so we probably need more of that.

  Q116  Lord Crickhowell: Can I pick up one point that arises from that. You spoke about the desirability of it and you referred to some of the smaller and newer states, but of course the very fact that they have strong views and are near neighbours very often makes it even more difficult for Europe to take up a common position because they resist what the marginal and further away states think should be their position.

  Miss Barysch: Yes, and they had a point initially because there was a group of leaders in the big existing Member States that was not really inclined to take the smaller, newer Member States terribly seriously. Instead they took every opportunity to build special relationships with Putin and get photo opportunities and they never liked to criticise him in public. Now all of these leaders—Schroeder, Chirac and Berlusconi—are gone so there is a better chance for EU unity just because at the level of leadership we have had a change-over. Angela Merkel has been both more outspoken about Russia's democratic shortfalls and she has made efforts to consult the new Member States and take their views into account. When Europe formulates its Russia policy you see Nicholas Sarkozy also being more willing to criticise Vladimir Putin than Chirac was. You see obviously the UK/Russia relationship being somewhat frosty at the moment. I think if there was a common relationship the distinctly pro-European Italians would not throw a spanner in the works so from that perspective you can see a greater chance for EU unity. When the new Member States came in, some of them probably thought that the European Union was a good way of amplifying their own individual criticisms and grievances that they might have had with Russia. That was not a good idea because it allowed the Russians to claim that EU foreign policy is now run from Latvia. That is so obviously not the case, but the Russians particularly like to emphasise that: "Now we cannot deal with Europe any more because it has all become completely ridiculous." I think we have overcome that phase. You do not see the new Member States taking one position that is distinct from the old Member States. On the contrary, you see some countries having big problems with Russia at the moment—Estonia, Lithuania and Poland—and you see Latvia, for example, having a remarkably good relationship with Moscow at the moment. You see some countries such as Slovakia and Hungary mimicking a bit what the old Member States have been doing in building special relationships and doing bilateral energy deals. It is not that you have old Europe versus new Europe in dealing with Russia, and I think now at the level of political leadership the constellation is better than it was before. We are also having Polish elections which might help, and from that perspective I think we will see a convergence of views, and I am quite optimistic that we are moving towards a more coherent policy on Russia.

  Q117  Lord Chidgey: Can I just turn back now to Russia's view of the EU. You talked earlier about how Russian foreign policy still seems to be set in the old-fashioned view, particularly amongst the senior political establishment in Russia, and almost set in stone if you like in the traditional, centralised way—this is where the great powers stand; this is where Russia stands—and I am interested to know how Russia is able to adapt, or not adapt at all perhaps, to the very fluid and changing perspectives in the Western world. We are having our own issues about how we deal with the expansion of the EU and all the opportunities and challenges that provides. Is this a more, if you like, frightening perspective for the Russian political establishment in the sense that they are not part of it, whereas we are very much trying to ride the tiger, so to speak? Do they see the situation of relations with the United States, with China, and with India and so forth, as a more comforting scenario than the dynamics in the EU, which are perhaps far less predictable in Russian eyes? Do they see the EU as an irritant rather than an opportunity in comparison to the other global powers?

  Miss Barysch: If you listen to Russian rhetoric, you would sometimes think that they see the EU as an irritant, but I think they are fully aware that if they look around their borders and to the wider world, Europe is their most reliable partner, their biggest market, and probably the entity or the bloc of countries that is easiest to deal with.

  Q118  Lord Chidgey: By that do you mean the easiest to influence?

  Miss Barysch: Certainly easier to influence than, say, the United States or China. I think Russia is fully aware that the potential for partnership with Europe is bigger than with any other country or group of countries. No, they do not quite know what to make of the European Union. I am under the impression they have rethought their attitude towards the EU. Europe at one point in time for Russia was the only game in town, it was the parameter against which everything else was measured. There was a time in the early 1990s when they talked about a "common European house". Now Russia sees itself as a great power, it has a global perspective, and it no longer thinks that Europe is the only parameter against which it should measure its progress. There is something called BRIC out there and it is a club of rising, emerging powers that has an "R" in it standing for "Russia" and that is a much cooler club at the moment to belong to than the somewhat sclerotic and squabbling European Union. Russian obviously thinks that its relationship with the United States is tremendously important and is also trying to make sense of where China is going. There is not much trust perhaps in Russian/Chinese relations but they are certainly trying to strengthen their ties. I think Russia is struggling to position itself globally and the EU relationship might be the easy bit because it is a very close relationship, it is a relationship that is living day-to-day through trade and through the multiple links that we have with them. Despite the somewhat disdainful rhetoric that is sometimes coming out of Moscow, I think that most Russians are fully aware that the potential for partnership here is greater than with most other countries.

  Q119  Lord Anderson of Swansea: Surely the test for EU foreign policy is not whether we can agree on Burma and Darfur but whether we can agree on matters directly affecting our own interests in our own neighbourhood such as Kosovo and Russia. Despite what you say about the change of Chancellor Merkel as opposed to Chancellor Schroeder, President Sarkozy as opposed to President Chirac, and Prime Minister Prodi as opposed to Prime Minister Berlusconi, who stand up more to Russia, they still favour pursuing their own policies on the economic side, particularly on the energy side. Prime Minister Prodi is no different from Prime Minister Berlusconi in respect of Italian oil interests. Do you agree?

  Miss Barysch: I agree that on the energy side we run the risk of having a kind of beggar-thy-neighbour policy in energy at the moment where each country scrambles to secure its own energy needs, not really thinking about what its neighbour's needs might be. I am nevertheless hopeful that if we make some progress in building a more integrated Europe energy market, our interests and needs in the energy sector would coincide and converge and then perhaps we will have a more unified position towards Russia. At the moment I admit that is not happening because you see German companies doing deals with Gazprom, Italian companies doing deals with Gazprom, French companies doing deals with Gazprom and these contracts that they are signing will last for 30 years. How we unscramble these bilateral deals I am not entirely sure. However, I do believe if we make progress with building a more European energy policy then that would really help tremendously. Gazprom making threatening noises and Gazprom trying to buy downstream assets in Europe might focus our minds on the need for unity.

  Chairman: I am going to move on to a whole raft of questions on the Russian economy. In order to protect the interests of people who have got interests in later questions, I am going to appeal for fairly short, succinct questions, and the economic ones are capable of shorter, more succinct answers as well, so Lord Hamilton?


 
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