Examination of Witnesses (Questions 299
- 319)
FRIDAY 23 NOVEMBER 2007
Mr Robert Cooper, Mr David Johns and Mr Björn
Fagerberg
Q299 Chairman:
Good morning, Robert. As you know, we are one of the Sub-Committees
of the European nion Committee, and we are now carrying out an
inquiry on the relations between the European Union and Russia.
We have taken evidence in London, looking at the current state
of Europe. We are very fortunate to have Sir Roderic as our specialist
adviser for this inquiry. We took evidence yesterday from the
Commission, Mr Wiegand, and we will be seeing Patrick Child later
on this morning. We had a very interesting session this morning
with four ambassador members of the PSC, from Greece, Sweden,
Finland and Germany, as well Julian, which gave us an opportunity
to realise some of the constraints, but also gave us an opportunity
for a rather wide-ranging discussion on some of the more general
issues of Russia rather than some of the specifics, which they
obviously have to focus on most of the time. I wonder whether
you would like to say something on what should be the fundamental
objectives of European Union policy with regard to Russia.
Mr Cooper: In the end, what we would like, which
is probably true of all countries, is to have a Russia which looks
and behaves more like us. At the heart of that is a Russia which
is governed by the rule of law, that would make it more predictable
and easier to do business with. On the other hand, one ought to
recognise that in spite of the various problems, we are dealing
with something today which is much easier to deal with than the
Soviet Union, so in terms of the foreign policy relationship,
it is a completely different relationship. It is not a perfect
relationship by any means. I was going to say I do not think anybody
in Europe sees Russia as a threat in the way in which the Soviet
Union was a threat, but that is probably not completely true.
There are people who had bad experiences who probably do see it
as a threat, but I do not think most people think of it in those
terms. Nevertheless, there are difficulties in dealing with Russia,
which are very much to do with the lack of rule of law and the
fact that the system, therefore, has got some very unpredictable
elements in it.
Q300 Lord Hannay of Chiswick:
Could we look at issues which do not directly relate to the relationship
between Russia and the EU. Perhaps you could say what you think
the scope for co-operation is in a whole range of fields: foreign
and security policy, non-proliferation, nuclear safety, multilateral
disarmament, crisis management, peace-keeping, this sort of area
here where it is quite interesting to know before we get into
the real bilateral relationship.
Mr Cooper: There are non-proliferation and anti-terrorism
fields where we have a good relationship with Russia. In areas
of foreign policy the relationship is often co-operative. For
example, in dealing with Iran, one would say that although there
are difficulties, the balance is broadly positive. Speaking personally,
I have got a lot of respect for the Russians' knowledge of Iran.
In the nuclear area, they have had a very intense relationship
with the Iranians, and I always find what they have to tell me
about how the Iranian system works very valuable. I think they
read the Iranians in some ways better than Western countries do
because they know them better. Terrorism is not a field I have
directly engaged with, but everybody tells me that co-operation
with Russia is very good. I have to confess also, I do not know
very much about nuclear safety.
Q301 Lord Hannay of Chiswick:
We had a briefing on that yesterday from the Commission, so we
can skip that if you do not want to deal with it because they
told us quite a bit.
Mr Cooper: Although dealing with them is not
always necessarily easy, you find there is a bureaucracy which
has a habit of obstruction and there are frequently areas where
even when you want to co-operate with them and even where it is
logical that you should both co-operate, it turns out to be more
difficult than it ought to be but, nevertheless, if you persist
in the end there is some value to get out of the relationship
there. I think the balance is broadly positive, a whole lot more
positive than it was before, but there is still a lot of room
for improvement.
Q302 Lord Hannay of Chiswick:
Can I follow up on the Iranian one, which is obviously extremely
topical at the moment. The picture you have painted is not possibly
what one thinks of in public as being the picture because the
Russians, along with the Chinese, but more prominently the Chinese,
tend to give the public the impression that they are not on the
same wavelength as the EU3. Is your positive analysis because
you do not have to deal with the issue of sanctions, that is dealt
with more in New York than here, and you deal with how do we achieve
the shared objective of preventing Iran becoming a nuclear weapon
state? It does seem as if the co-operation is a bit less good
than you state it is, but perhaps you will persuade us otherwise.
Mr Cooper: No, I do deal with sanctions as well,
and the Russians are not very enthusiastic about the sanctions.
I must say, sometimes I share that feeling. For example in the
recent visit of President Putin. Everything that I know about
it suggests that they delivered a very tough message in quite
a sophisticated way. They deliberately made some rather soothing
noises in public, but in private—and this is the impression
I get from the Iranians as well as what the Russians have told
us in private—they told the Iranians very clearly what they
thought the Iranians needed to do and were able to do that at
the level of the supreme leader, which not many people get access
to. I saw all of that as being positive. On sanctions, the Russians
have never been very enthusiastic. Once somebody asked one of
our Russian colleagues why the Russians had agreed to sanctions
in the first place and they said, "Well, out of despair",
because nothing else seemed to be working. The Russians believe,
as we believe, that in the end you will have to have a negotiated
solution. They do not think the Iranians can be coerced into a
solution. They regard sanctions as probably a necessary evil and,
therefore, they do not rush into sanctions. My expectation is
that we will get another resolution, and the Russians are not
necessarily the most difficult people in negotiating it.
Q303 Lord Hamilton of Epsom:
I do not know whether you are aware, but the Cross-Party Group
of the House of Lords has produced a report on sanctions saying,
one, they do not work and, two, the degree to which they impact
on a country is always on the poorest people living in that country,
so I have great sympathy with the Russian position on that.
Mr Cooper: Although one can sometimes add that
they also add to the benefit of those in government who then make
a lot of money out of the black market and illegal deals as well.
Q304 Lord Hamilton of Epsom:
We know that, but it is another issue.
Mr Cooper: To the detriment of the poor and
the benefit of the rich!
Q305 Lord Hamilton of Epsom:
Exactly, but the problem with all dictatorships is everybody benefits
from what is going on in the country, all the people at the top.
They have not done much about Castro over many years.
Mr Cooper: He has aged a lot though!
Q306 Lord Hamilton of Epsom:
I am very interested that you think they have a much better understanding
of Iran than others do. From the Russian point of view, how do
you see that being constructively taken forward? Are they separately
negotiating with them?
Mr Cooper: Yes, because the single civil nuclear
programme in Iran is a Russian programme, the reactor at Bushehr,
which the Russians have been building for years. Therefore, they
are in very, very close contact with the nuclear community in
Iran. Although they attempt to keep these two things separate,
the fact is they know everybody in the nuclear world much better
than anybody else does because they are doing a multi-billion
dollar piece of business with them.
Q307 Lord Hamilton of Epsom:
Is it right that they are not supplying them with a lot of the
radioactive material?
Mr Cooper: So far they have not supplied the
fuel for the reactor at all, but I understand they may be about
to do that. I think part of Putin's visit was to do with finally
reaching an agreement which would mean they would put the fuel
in, but the fuel is owned and controlled by the Russians and they
have quite strict provisions about proliferation. For example,
If Iran was formally in breach of its Safeguard Agreement with
the IAEA, then the Russians would be obliged to stop the co-operation
at Bushehr.
Q308 Lord Hamilton of Epsom:
In terms of weapons grade material, it will not come from that
reactor?
Mr Cooper: No, it has nothing to do with that.
Q309 Lord Hamilton of Epsom:
Having said that, do you feel there is a black market which they
are buying it on elsewhere?
Mr Cooper: The weapons grade material?
Q310 Lord Hamilton of Epsom:
Yes.
Mr Cooper: No, I do not think so because otherwise
they would not be trying to make the PI centrifuges work.
Q311 Lord Hamilton of Epsom:
That is very significant, is it not, because if that all adds
up, they are not about to produce a nuclear weapon?
Mr Cooper: That is a whole different question.
(There followed a short discussion off the record)
Q312 Chairman:
Again, this is a question where you may feel you would like to
go off the record. I wonder whether you would like to characterise
the differences in approach among the Member States in terms of
policy and approaches and how far those differences in approach
make it difficult for the European Union to develop a common policy
towards Russia.
Mr Cooper: I think everybody understands that
throughout the European Union there are a vast number of different
histories with Russia. Starting at one end of the spectrum, you
have a country like Greece whose existence as an independent country
in the 19th century was partly a result of Russian support to
other countries which lost their existence as independent countries
because of Russia, so it is not a surprise that there are a range
of very different relationships indeed. It is also true generally
that super powers exercise a very large gravitational pull—and
this is true of the USA as well as Russia—on individual
Member States to the extent that they can pull the European Union
apart. There is a prisoners' dilemma situation. In the long run,
everybody would be better off by acting together but, in the short
run, that does not always appear so to individual Member States
at any particular moment. Precisely the function of the three
of us here is to try and find ways of demonstrating to the Member
States that they are better off if they work together. The extent
to which we work together depends very much on what is happening
within the European Union. In the area of trade and economic co-operation
where there are well established rules, then the European Union
does operate as a unit because that is the law. In the area of
energy, for example, there is not a strong EU energy policy and,
indeed, even physical infrastructure in energy does not mean there
is a single energy market in the European Union. I think probably
there will be more co-operation in energy in the future. As internal
co-operation becomes stronger, then external co-operation on energy
matters will become stronger as well.
Q313 Chairman:
In our discussions with the ambassadors from the PSC this morning
we were interested to discover that at that level there are discussions
on a number of particular issues and the Russian dimension of
that, but there is very rarely an opportunity to develop an overall
view of attitudes towards Russia and to develop a common analysis
of these programmes. How far do you feel the CFSP, and its structures
of the Union ought to be an instrument which will help Member
States develop common analyses of partners like Russia?
Mr Cooper: Russia is very big and very complicated
and it is quite difficult to have a single policy on Russia, I
do not know how people see this in the UK. You have commercial
relations with Russia, you have relations with Russia in the case
of Britain connected with Mr Litvinenko's death for example, you
have relations with Russia concerned with their neighbours and
we have stories like the Iran story we were talking about. Whether
you can aggregate that and say we have a policy on Russia, I am
not sure; inevitably things tend to be discussed piece by piece.
I am not even sure how much it helps to say you have a policy
on Russia generally, except when you come to the point, as it
was with the Soviet Union, where there was a single overwhelming
factor, which was one of a threat.
Q314 Lord Truscott:
My Lord Chairman, if I can go back to energy, which you referred
to, Mr Cooper. In your view, what are the obstacles to having
a common approach to energy as far as the EU is concerned? You
said it is difficult to have a policy in separate areas towards
Russia, but at least we should be moving towards a common approach,
particularly in the energy sphere. With regard to that, what do
you think is the proper balance between ensuring we have a liberalised,
open energy market on the one hand and, on the other, ensuring
security of supply and security for our energy infrastructure,
because there is obviously a debate going on at the moment about
the level of protectionism which Europe might be moving towards?
Mr Cooper: I am not necessarily the best qualified
person to answer that question because it is a much bigger question
but, nevertheless, I think it is right to regard energy as being
different from other commodities because of the central role it
plays in all of our lives and economies. Therefore, without exaggerating,
I think the best security of supply is a well-functioning market,
but in some areas where, for example, you are heavily dependent
on gas through pipelines, then there is a certain risk. Of course,
the fact that Russia has on a couple of occasions switched off
the gas—in fact, on more than a couple of occasions if you
take individual cases—has made Member States very conscious
of that risk. That is one of the reasons why you see a number
of people creating LNG terminals as an alternative. It seems reasonable
under the circumstances to pay some insurance premium to have
some alternative sources of energy. On the other hand, one ought
to understand that Russia is probably more dependent on selling
energy to us than we are on buying energy from Russia. They have
a very strong interest in being a predictable supplier, so I would
say that one should pay an insurance premium, but probably not
an absolutely excessive one. There are other ways in which one
can improve one's security, notably by having a better internal
market in energy by having connectivity, so that if one country
has an energy problem with Russia or somebody else, they have
got alternative ways of getting electricity or gas. I think there
is every reason—partly for bargaining leverage reasons but
also there would be environmental considerations as well—for
having a much stronger energy policy in the European Union than
we do at the moment. I would predict we will have one in a few
years' time.
Q315 Lord Hannay of Chiswick:
What you said seems common sense entirely, that one aspect of
an external energy policy which will strengthen the European Union's
hand in its dealings with Russia will be a greater diversification
of sources of supply and, per contra, the more we depend
on the one source or supply or, at any rate, pipelines which run
through one source of supply, the weaker our position is. This
is so obvious. Why is it not obvious to all of our Member States,
and why do they not draw the appropriate conclusions from it?
Mr Cooper: I think some of them have drawn that
conclusion, but from drawing the conclusion intellectually to
spending very large sums of money on implementing that takes time.
Although some of them have drawn that conclusion, I am not sure
all of them have drawn that conclusion yet. I could give you a
list of other things where more co-operation would be mutually
beneficial but do not occur. Lord Roper would be familiar with
the case of weapons procurement as a very obvious case where real
gains are missed.
Chairman: Indeed.
Q316 Lord Hamilton of Epsom:
That is another debate. You said that an external energy policy
is inevitable in a few years' time, I am not absolutely certain
I would go along with that because I think national interests
override an awful lot here. I wonder what you would gain by a
common approach. I do not think energy is different from anything
else. I can see people being unnerved about gas being switched
off but, let us be honest, it was switched off for people who
were getting subsidised supplies of gas. There is no obvious reason
why Russia should subsidise gas supplies to the Ukraine, we can
see the historical reasons for doing it. Maybe I would have gone
about it differently if I had been the Russians, but I think I
would have been quite keen on selling them gas at the market price
as the market price has gone up.
Mr Cooper: This is the point which Mr Putin
makes to us also!
Q317 Lord Hamilton of Epsom:
I think the market is working. It may be that the EU has not got
a hold on it, but it does not mean that it is inefficient. It
is quite interesting, you switch off the gas in the Ukraine and
then people start putting LNG terminals in so start paying a price
for it absolutely at once. There is no real reason to believe
that the Russians are going to shut off gas supplies for some
political reason because it would seriously affect their cash
flow. I think the market is working, I am not absolutely certain
whether you meddling in it will make it any better.
Mr Cooper: In most cases it is not the EU meddling
in it because the gas terminals are being built on a national
basis.
Q318 Lord Hamilton of Epsom:
That is the point I am making.
Mr Cooper: What happened with Ukraine was there
was a dispute between Russia and Ukraine, and you are quite right
that the Russians had legitimate points, not least about the amount
of gas which was being siphoned off in Ukraine but, nevertheless,
we got caught in the crossfire in that because you cannot switch
off the gas to Ukraine without switching it off for European countries
as well. Although you are right that switching the gas off was
a mistake from the Russian point of view because after the long
years in which Russia had established great credibility as a reliable
supplier, it damaged its reputation very badly at that moment,
but it made everybody conscious of the risk and the risk is of
the crossfire. You are right, it would be irrational for Russia
to do this, but sometimes countries are irrational and the consequences
of that are quite serious.
Q319 Chairman:
On energy security, have there not been problems with the supply
of oil to Lithuania or one of the Baltic States by the Russians
at several stages? That is one of the few cases where there has
been direct action against a Member State of the European Union,
as I understand it. I wonder if we can be told a little bit about
that and how the Union reacted.
Mr Johns: That is a branch to the Druzhba pipeline
which leads to Lithuania and to the Mazeikiu refinery. It was
closed down because the Russians said there was a leak in the
pipeline due to cracks. They carried out a feasibility study and
apparently came to the conclusion that it was neither technically
nor commercially feasible to repair the pipeline. To my knowledge
they have not yet supplied that feasibility study to the EU or
the Lithuanians, although we did ask for it at the Mafra Summit.
The problem is—apparently this is the Russian argument—that
the pipeline is privately owned by a Russian company and you cannot,
therefore, force a private company to repair at its own cost a
pipeline which is not commercially feasible. This is the Russian
argument.
Mr Cooper: Perhaps there is another point I
might have made in answer to Lord Hamilton. There is some concern
about the reliability of Russian supplies, not just because of
political considerations but because of lack of investment. That
is a point we have made several times to the Russians and I think
they have realised this and are thinking about it. Whether they
are doing something about it is not yet clear. There are still
good long-term reasons for giving oneself alternatives. That is
one reason why is it would be very nice to have a better relationship
with Iran.
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