Examination of Witnesses (Questions 343
- 359)
FRIDAY 23 NOVEMBER 2007
Mr Patrick Child
Q343 Chairman:
Good morning, Mr Child. I wonder whether we could begin by talking
a little bit about he present basis for the arrangements and
the links between the European Union and the Commission and the
Russian Federation. I wonder if you would be able to talk about
the sorts of projects and technical assistance programmes which
we are carrying out and how far this will change with the new
European Neighbourhood and Partnership Instrument as part of the
financial perspective.
Mr Child: Thank you very much. I know you have
already had a session with some of my colleagues yesterday, including
the Director General in DG RELEX.
Q344 Chairman:
Indeed, it was very helpful.
Mr Child: I will try and add something to what
they have said. On your first question about the sorts of projects
we are supporting in our relations with Russia, I guess things
are in quite a phase of change as Russia becomes a more developed
and economically successful partner. The need for the sort of
development-related technical assistance we were doing under the
Tacis Programme is evolving quite quickly. Under the new European
Neighbourhood and Partnership Instrument we will be reducing quite
substantially the overall financial volume devoted to our Russia
programme. In the new period, we will concentrate on three or
four areas. Firstly, education, people-to-people contact and scholarship
programmes, and that sort of thing and, secondly, on the work
we have been doing in Kaliningrad, supporting the economic and
social integration of Kaliningrad into its new immediate neighbourhood.
That has been a particular focus of the work of Mrs Ferrero-Waldner
as Commissioner. We are also encouraged by the recent signs that
the Russians themselves are ready to contribute to the Cross-border
Co-operation Instrument which we have in place under the Neighbourhood
Instrument and that, therefore, again, will be an important theme.
Another area I would mention in the context of the Northern Dimension,
is our work on environment issues, particularly in the North of
Russia and the Baltic Sea, and I hope that will continue. We are
also doing a number of things through our separate Human Rights
Instrument in terms of supporting the rule of law, democracy and
civil society in Russia, which I think is an increasingly important
thing given the recent political developments. Those are the broad
lines, but if it would help the Committee, I could certainly ask
our services, if they have not already done so, to give you some
further background information.
Q345 Chairman:
Yes, we have had a copy of this report and we are going to be
in Moscow in December and we have an appointment to call upon
the Head of the Delegation, so we will have a chance then. We
saw his deputy yesterday because he was with your colleagues who
we met in RELEX.
Q346 Lord Hannay of Chiswick:
Have you had any real problems in handling your programme to work
with NGOs as a result of the Russian tendency to clamp down on
NGOs generally and, in particular, NGOs who have anything to do
with foreigners and, particularly, NGOs who have anything to do
with foreigners who would convey money to them? Have you had any
problems in that area? Secondly, have you conducted any evaluation
of what the consequences of these programmes you have described
could be, what the effect has been? It does not seem to us from
the evidence we have taken so far that Russians generally have
a very benign view of the European Union any longer. Have you
conducted an evaluation of that?
Mr Child: It is a difficult area and it is an
area which has not become easier recently. There has been a particular
project, which may be familiar to the Committee, that we have
supported, the Moscow School of Political Studies, which I know
has got a lot of sympathy. It has not only been challenging for
us to find ways through our financial procedures to ensure the
level of support which we believe to be politically justified
for that organisation, but also the climate in which it works
politically in Russia has not been straightforward. At the last
summit with the Russians a few weeks ago, President Putin raised
a particular concern about a somewhat similar project we were
doing to look at human rights' issues based in St Petersburg.
He was questioning whether this was an initiative which the EU
should be supporting and went as far as to suggest that maybe
Russia would consider, in return, setting up a similar or other
sort of organisation in the EU to look at those sorts of issues
in the EU. I think the response from President Barroso was, "Well,
we have a free society and if you wish to fund such an organisation,
that would be perfectly acceptable" we will see where that
will lead. As to the question of whether we evaluate the global
impact of these sorts of programmes, I am sure it is a drop in
the ocean and Russia is a very large and complex society. We have
not had the sort of scale of resources to make a very seismic
change to the way that these issues are pursued by the Russian
Government. Of course, we do have procedures where each individual
project is assessed against its objectives and the evaluation
of the results. I do not have details of all that, but it is a
very difficult environment and it would be foolish of me to pretend
that things have got easier in recent months, particularly as
the political climate in Russia has developed in light of the
presidential elections.
Q347 Lord Hamilton of Epsom:
I am interested in the work you are doing on Kaliningrad. Clearly
it is in need of help at the moment, but if you are successful
in what you are trying to do in linking up locally and whatever—I
hesitate to say too successful—then there may come a moment
where it is looking like a Hong Kong of Russia, and will that
cause problems for Russia?
Mr Child: In all our discussions with the Russians
on Kaliningrad, we have stressed, and will continue to stress,
the importance of Kaliningrad as part of Russia and that there
is nothing in our strategy which intends to call into question
the territorial integrity of the Russian Federation. That is a
very important message in order to begin a discussion with our
Russian friends, not only the ones in Moscow, but also the authorities
in Kaliningrad itself where there is a very strong interest. Something
Mrs Ferrero-Waldner has sensed clearly in her several visits there
is the willingness of the local leaders to take advantage of the
economic opportunities which their situation offers in relation
to the enlarged Union. There is no prospect of a more fundamental
change in the status of Kaliningrad as part of Russia and, of
course, to some extent it is for the Russian authorities to decide
what sort of economic and social regime to allow to develop there
by comparison with other parts of the Russian Federation.
Q348 Lord Hannay of Chiswick:
Can we ask you a couple of questions now about the institutional
framework of the EU-Russia relationship currently, that is to
say things like the PCA, the common spaces, and the Northern Dimension.
Are they working reasonably well? What are the strengths and weaknesses
of the framework which exists, and what scope is there for improving
it without going outside what is currently there? The second half
of the question is what priority do you, therefore, attach to
negotiating a new institutional framework for the relationship?
Is it a high priority, because what you want to do, what the EU
wants to do, cannot be done without a new framework, or is it
a lowish priority to be pursued as and when circumstances become
a little bit more propitious than they are at the moment?
Mr Child: Firstly, I would say that any institutional
framework is as successful or as unsuccessful as the political
environment in which it is expected to operate. Against that background,
I think the PCA and the common spaces are providing a good basis
for the relations that we have with Russia. It would be wrong
to conclude from the difficulties we have had recently in the
discussions on the new PCA that somehow the relationship with
Russia had ground to a complete halt. We continue to work and
co-operate with Russia on a very large number of issues through,
in particular, the PCA and its various sub-committees, also with
the specific Northern Dimension Framework in the north and with
the framework of the four common spaces. Given the political environment
today, both in terms of the EU's policies and attitudes towards
the relationship, which I hope we can come on to in some subsequent
questions, as well as the political climate in Russia itself,
the present framework is working as well as can be expected. The
PCA is, however, very much a product of the time when it was negotiated.
It was at a moment when Russia was very much struggling with the
challenges of transition, not benefiting from the economic strength
which flows from its present energy relationships in particular
and, therefore, at a moment when perhaps the readiness on the
Russian side to sign up to the core principles and common values,
which is very central to the present Partnership and Co-operation
Agreement, was greater than perhaps would be the case today. Similarly,
I think at the time the political mood in the EU, in the face
of the very exciting changes which were taking place in the continent
and the opportunities that were perceived there, was perhaps a
mood of optimism about the speed and direction of political reform
in Russia, which has not completely materialised since. Therefore,
if we now take another look at this relationship, clearly the
whole discussion on whether we really have a strategic partnership
based on common values is one which I think merits a bit more
discussion. My first answer is we should not think that because
we do not have a new PCA there is nothing to be done with Russia,
on the contrary, the relationship will continue on the present
basis and, in particular, until the present political milestones
in Russia are behind us, I suspect. However, it is useful, for
the reasons I have indicated, to have another look at the relationship
and whether we have got the balance right, and I think the discussions
on a new PCA provide a good vehicle for that to happen. For example,
are there issues like the environment, like energy, which I would
hope would have a more prominent place in a new agreement than
they do at the moment? It is also quite important to avoid the
EU looking as if we want a new PCA at all costs because I suspect
we could then find ourselves in an environment where the costs
turn out to be quite high, so it is important we keep some balance
in that. That is where the EU consensus is today, that we will
continue to work within the existing framework, giving emphasis
to those things which are important to us at the moment and also
present common interests. We do have the important provisions
on the shared values, which are things we must keep reminding
the Russians about, particularly against the background of various
recent developments and that when the political mood is right
for us to return to perhaps a more serious discussion on a new
framework relationship, then the new PCA text, or something like
that, will be the basis for those discussions.
Q349 Chairman:
On the negotiations with the Russians and the amount of business
that goes on, we have been quite impressed while we have been
here by discovering the size of the Russian mission to the European
Union. Presumably most of the work it does is with different parts
of the Commission, it tends to be Pillar 1 business on the whole.
How much of the totality of work is done here and how much of
it is done through your own mission in Moscow? Is it possible
to get an assessment of the relative weights of where business
is done? That may be an unfair question.
Mr Child: It is difficult to give a scientific
answer.
Q350 Chairman:
Yes, impressionistically?
Mr Child: Certainly there is a very strong Russian
mission here, just as we have a well developed and well resourced
delegation in Moscow and each contributes in a constructive way.
There is also the Member State that has the Presidency, particularly
in terms of preparing big set piece meetings like the Summits
and there is always a big input from those countries. The emphasis
of the political work would be coming through the mission here
directly to the Commission Services and also to our colleagues
in the Council Secretariat when we are talking about some of the
CFSP issues which they work on, whereas the more day-to-day co-operation,
implementation of our technical-assistance programmes and other
financial programmes, there is more emphasis through our mission
in Moscow. That is a crude way of looking at the division of labour
but, of course, when we come to preparing a Summit, it is all
hands to the pump and everybody is involved in it in a very energetic
way.
Q351 Lord Hamilton of Epsom:
In which areas of policy does the EU most need to present a united
front in relationships with Russia? What does the EU have to offer
in the context of negotiation? How best can Russian thinking be
influenced by the EU?
Mr Child: There was a useful discussion of EU-Russia
relations at the informal "Gymnich" meeting of foreign
ministers at the end of the summer where there was, more than
I have certainly noticed in the past, a shared sense that we urgently
need to present a clearer common front to Russia on a large number
of issues. Maybe the background of the changes flowing from the
EU enlargement, both in terms of attitudes within the EU and also
the way the Russians perceived them has made it even more necessary
for us to work together on presenting a common front to Russia.
I guess the area where most specific questions and issues arise
is in the commercial relationships which some Member States have,
particularly in the energy sector, but perhaps not only there,
where some Member States are more ready to tolerate certain behaviours
on the part of Russia than others because they have a different
appreciation of the commercial dimension of the relationship.
I would say that was perhaps the economic and commercial area
where the divergences in Member States' positions are most felt.
Although, of course, the result of that is you can see differences
also in their position on some of the other issues, like foreign
policy or, indeed, the core values we share with Russia. Across
the board there is a need for greater coherence and commonality
of position among Member States. I very much welcome that there
is a growing awareness of Member States of that need and I look
forward to that awareness of the need being translated into a
reality of fact.
Q352 Chairman:
Can I ask you a follow-up question to that because we had a meeting
this morning with five of the ambassadors from Member States to
the PSC, including the British one. There were two quite interesting
things that they said: first of all, the fact that they very rarely
did have a discussion about policy in Russia, they discussed immediate
particular points obviously and Russia came up in that direction
but, secondly, they also felt that because of the structure of
the Union, foreign policy was being done there and energy was
being done somewhere else, therefore not only was there not even
a full discussion within the Second Pillar as to common policies,
but even more so at a macro level, bringing together the different
dimensions of the relationships of Russia, not only political,
it was that you might make good remarks at a summit, you might
make good remarks at a Gymnich, but where was it that this could
be put together as a common basis for analysis and reaction development?
Mr Child: I am not surprised that you got that
impression from that group of people. Indeed, there are questions
which I hope will be easier in the future when we have greater
coherence in our external relations which the new Reform Treaty
should bring, which will help to bring together the different
components of relations with important partners like Russia .
There are issues which are not best addressed to me, but to colleagues
in the Council about in particular the relationship between the
PSC and its very clear focus on CFSP issues and the Coreper, which
has a broader responsibility, for example, for the preparation
of summits, including the summit with Russia. I would certainly
encourage anything that can be done within the structure of discussion
within Member States to find a better place for those discussions
to be conducted. I think the reality is that it does only come
together at the level of ministers in the General Affairs Council
and, even then, they may not have the full awareness of what is
being discussed in energy or the Interior Minister's Council or
other formations of the Council dealing with different topics.
Q353 Lord Hamilton of Epsom:
You referred earlier to enlargement, can I ask it the other way
around. How are the Russians reacting to the fact that enlargement
gets nearer and nearer, enclosing them almost, their borders certainly
on the west?
Mr Child: The Russian response to enlargement,
and a desire to be more deeply involved and consulted in the enlargement
process and decisions, has been a big feature of the EU-Russia
relations in the eight years I have been following them. It is
certainly true that some of the more acute discussions we have
had recently over, for example, the Polish meat issue or, indeed,
the Estonian War Memorial, are part of a broader sense of unease
in Russian political circles about what the process of EU enlargement
means for what they have traditionally considered to be part of
their immediate zone of influence. I guess similar issues arise
in the context of NATO enlargement, although that is not something
for which we have responsibility, but it is very present in Russian
thinking. It also explains why it is so difficult for us to engage
in the sort of discussions which I would like to see with Russia
on some of the frozen conflicts and issues that arise in the context
of our common neighbourhood and in the implementation of the European
Neighbourhood Policy in some of the countries of Eastern Europe.
Q354 Lord Hamilton of Epsom:
Of course, Poland and the Baltic States are already in, but how
about future enlargement? How are they reacting to other countries
being candidates in future tranches?
Mr Child: At the moment we have commitments
for enlargement in the Western Balkans. Of course, we have quite
a difficult discussion with Russia at the moment, specifically
over the question of the status of Kosovo, but I think that has
got less to do with enlargement than broader issues. There are
accession negotiations ongoing with Turkey and I am not aware
that Russia has a particular axe to grind there. If we were ever
to move to a discussion about other candidates, countries that
are today covered by the European Neighbourhood Policy, then we
might, I guess, provoke some other Russian reactions.
Q355 Lord Hamilton of Epsom:
Would you consider the Russian concerns legitimate? If Ukraine,
for instance, at some stage said they wanted to be a member of
the EU—in theory, that is subject to discussion between
the EU and Ukraine, Russia are not a party to that—would
we loop them in on the basis that they have a legitimate concern?
Mr Child: Few days go past without Ukraine saying
they would like to be a member of the European Union. The European
Union's position on that is clear and well established that the
focus of the relationship today is the European Neighbourhood
Policy. It is perhaps easier to answer that question in relation
to how we have handled past enlargements where, indeed, the message
from Russia was, we want to be more directly involved in discussions
on how Poland or other countries should be brought in and what
would be the consequences for Russia on trade in certain key sectors,
and whether there are things we should then be discussing with
Russia about mitigating the effects of accession in certain areas.
The EU has said in response to those Russian concerns, "Of
course we are ready to talk to you at any time about the process
of enlargement we are working on and we are also open to a discussion
on specific issues, but that we were convinced overall the process
of enlargement is beneficial for the European Union, for the candidate
countries, but also for Russia". We sought to convince the
Russians of those benefits and I think we still have some convincing
to do, although the temperature of that debate has diminished.
Q356 Lord Hamilton of Epsom:
They have a legitimate concern but they do not have a veto.
Mr Child: We would expect them to take a very
close interest in the enlargement process and in the consequences
that it would have for them, but that is a different question
from giving them a direct seat at the table when we are discussing
with the candidate country the terms and conditions of its accession
into the European Union.
Q357 Chairman:
The Kaliningrad transit case was a very particular case and it
was unlike almost any of the others because it did have an implication,
presumably, for Russia.
Mr Child: Yes, the Kaliningrad transit case
was very interesting because it was also linked with the immediate
conditions of accession of Lithuania in particular, but also Poland,
and also the aspirations of Lithuania to become a full member
of the Schengen system within a reasonable time. Therefore, the
negotiation that we had to lead at that time was to convince the
other Member States that the special regime with the special trains
which we were introducing for people transiting from Russia to
Kaliningrad was compatible with a future Schengen visa environment
while, at the same time, for Russian public opinion demonstrating
that there was not a fundamental change which would cut off this
important part of the Russian Federation from the rest.
Q358 Lord Truscott:
On energy policy, I know this may be more appropriate for Commissioner
Piebalgs and his cabinet to a certain extent, but obviously
I am interested in your input and RELEX's input into this. What
do you think are the obstacles to a common EU energy policy? Do
you think the focus should still be on trying to implement the
Energy Charter Treaty as far as Russia is concerned, which seems
to be a bit of a dead duck at the moment, or should they be focusing
on a different approach? What issues do you think will arise with
the whole question of unbundling of supply and distribution assets
and the new Energy Directive which is being discussed?
Mr Child: I would be very pleased if you were
able to talk Mr Piebalgs and his colleagues because they are also
involved in this. We have a fairly clear understanding of what
we would like from Russia as a partner in energy, where we want
to have reliable supplies which are not influenced by political
considerations, but are based on sound and reliable commercial
relationships. We would like to have the same sorts of opportunities
and access for EU firms and Western firms to get involved in the
Russian markets as they have given our open markets in the EU.
We think that is particularly important because what we think
is needed in Russia is investment and upgrading of the infrastructure,
transit infrastructure in particular, which probably requires
the capital investment of outsiders and will not only come from
inside. If that investment is not made, then the risks for future
supply for the EU's needs are that much greater. Whether, given
the political baggage that it now carries with it, the Energy
Charter is going to be the vehicle which will help us to deliver
that, I do not know. I think it would be wrong for us to abandon
that as the central element in our discussions with the Russians,
but it may be that at the end of the day we can achieve the same
results in other ways and for me that would be very acceptable.
If I could answer at least two sentences off the record on the
unbundling story and then I will give you another answer. (There
followed a short discussion off the record) It was very interesting
that the most prominent public reaction to the proposals the Commission
made in September on unbundling, which were primarily intended
to improve the operation of the internal market, was the possible
external consequences and, in particular, what it meant for Russia.
If the Commission set out to include some quite tough provisions
on reciprocity and what we would expect from third country actors
becoming involved in the EU internal market, that was a deliberate
and quite important political signal in order to create the conditions
within the EU which would make those proposals domestically acceptable.
Q359 Lord Hamilton of Epsom:
We were told earlier that in terms of the internal market there
should be plans to share, so if somebody gets their gas supply
from Russia shut off, they can be bailed out by their neighbour.
On the ground, are we making any progress on that front?
Mr Child: I confess, I am not an expert on the
details of the interlinking between different energy markets and
the debate on strategic reserves, which is sometimes part of the
same thing. It is a growing area of discussion, but I think the
existence of strong national monopolies in some Member States
is a break on progress in that direction, which is precisely the
reason the Commission has made the unbundling proposals that we
have.
Chairman: Mr Child, thank you very much
indeed for taking the time to come and give evidence to us here
this morning. It has been very useful preparation for our visit
to Moscow next month where we hope to pursue the matter and prepare
our report in the early part of next year. Thank you very much
indeed. We are most grateful.
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