Memorandum by the EU-Russia Centre
SUMMARY AND
MAIN RECOMMENDATIONS
The EU and Russia are two of the most important,
albeit very different, global actors, with many shared interests.
The EU has a major interest in assisting the emergence of a strong,
stable and democratic Russia, as a close neighbour. However, as
a recent study by the EU-Russia Centre on the bilateral relations
of EU member states with Russia has shown, this ambition is often
hampered by the absence of a common EU approach. (Published 12
October 2007, available from www.eu-russiacentre.org) The UK should
seek to promote a common EU approach towards Russia wherever possible.
Trade between the EU and Russia is significant
and should be developed further in order to benefit both actors.
The EU should work towards formulating agreed aims and objectives
for a new Partnership and Cooperation Agreement (PCA), ensuring
that discussions neither drift nor are undermined by bilateral
disputes between member states and the Russian Federation. Finally,
the EU needs to ensure that civil rights and the rule of law remain
integral to the EUs relations with Russia.
MAIN RECOMMENDATIONS
— to define and commit to a common
EU approach towards Russia, including a new strategic agreement;
— to emphasise the importance
of the rule of law in Russia and to encourage the emergence of
a civil society and adherence to civil rights;
— to emphasise the importance
of trade relations between the EU and Russia and to promote further
development in order to benefit both economies within a clear
legal framework;
— to hold Russia accountable to
its commitments to organisations such as the Council of Europe,
the Organisation for Security and Co-operation in Europe (OSCE)
and the EU (within the framework of the PCA); and
— to encourage the EU and Russia
to cooperate more on foreign and security policy.
1. The EU-Russia Centre
The EU-Russia Centre is an independent pan-European
organisation seeking to promote closer ties between the EU and
Russia, to develop ideas about the future of the relationship,
and to ensure that both sides adhere to international standards
concerning the key elements of a civil society such as democracy,
civil liberties and an independent judiciary. Further information
can be found at www.eu-russiacentre.org.
This submission outlines the Centre's main recommendations
on the future of EU-Russia relations and identifies the specific
areas that need to be addressed and achieved in order to enable
relations to prosper.
2. Russia internal
Political power is concentrated in the Kremlin
and essentially in the hands of the President. Over 50% of the
economy is now controlled by companies chaired by Kremlin officials.
The majority of the media is under state control. Civil society
is under constant threat. The new law on NGOs which came into
force in early 2006 obliges foreign NGOs to inform the government
about all their projects, finances and sources of funding. The
government may draw on wide powers to prevent projects being carried
out. An alarming indicator of the inadequacies of the judicial
system is the huge increase in the number of appeals to the European
Court of Human Rights in Strasbourg from Russia in the last four
years.[17]
The rule of law and an independent judiciary exist only on paper.
Judges deliver verdicts that the state wishes to see, with 99,6%
being guilty vedicts; corruption in law-enforcement agencies is
widespread and several show trials eg Khodorkovsky, demonstrate
that the state often violates or re-writes its own laws.
Research earlier this year by the EU-Russia
Centre reveals limited understanding and support for democracy
in Russia. Less than a third of Russians understand the importance
of the separation of powers and 62% prefer a "strong president"
combining executive, legislative and judicial functions. These
results testify to the major role played by the state-controlled
media in influencing attitudes. (see paragraph 5)
At the same time, the state-controlled media
fails to address fundamental social and economic problems. President
Putin has been fortunate to preside over an economy which has
been bolstered by high energy prices. But he has failed to tackle
any of the major social problems such as the poor state of the
health service (around 30% of the 142m population cannot afford
medical care), the demographic catastrophe with the population
shrinking by 800,000 annually, or the dismal standard of pensions
(around
50-150 per month).[18]
Nor has he made much headway in attempts to
diversify and sustain the economy. While there is rising foreign
investment in Russia this is confined to certain sectors; many
potential investors are wary of going into Russia given the absence
of any genuine rule of law. The Kremlin has repeatedly announced
major investment programmes, most recently at the Sochi economic
conference in September, when President Putin announced a $1000bn
investment programme in infrastructure over 10 years. But to date
there has been little evidence of such announcements being turned
into reality.
In the short term it is unlikely that there
will be significant changes to the political-economic system.
A sharp fall in energy prices would bring pressure on the ruling
elite but this does not appear a likely prospect. President Putin's
successor (quite possibly Prime Minister Victor Zubkov) will have
to be approved by the current ruling elite and in order to do
so will have to promise to protect their interests. The next President
will be confronted with a number of social and economic problems
(see above) which will require careful political management. He
is also likely to continue the more assertive approach to foreign
policy which finds widespread approval internally, partly due
to the messages ("a strong Russia is back, confronting the
West") portrayed in the Russian media.
3. Russian foreign policy
The ruling elite is unlikely to endanger its
own stability, the inflow of money and the ability to spend this
money abroad by embarking on military adventures. Russia will
thus continue to seek ways to increase its influence but caution
will characterise its foreign policy. President Putin's more nationalist
and assertive foreign policy may have gained him domestic support
but few friends abroad, a position that is unlikely to change
should he take on the role of Prime Minister following 2008 elections.
Indeed it is difficult to think of any neighbour with whom Russia
currently enjoys friendly relations. Increasingly Russia tends
to lump the EU/the US and NATO together with many politicians
and analysts criticising "the West" for seeking to weaken
Russia. There is considerable resentment at the alleged neglect
of Russia by the US, as Putin believes that he went out of his
way to accommodate the US after 9/11 and received little in return.
The West was charged with bombing Kosovo, invading Iraq, expanding
NATO and promoting the Orange and Rose revolutions. The US decision
to install missile defences in Poland and the Czech Republic was
met with counter threats and earlier this year Russia announced
its intention to withdraw from the CFE treaty. More recently,
it has asserted its rights in the Artic and resumed strategic
bomber patrols.
At the same time there has been some useful
cooperation with Russia in dealing with nuclear safety and proliferation,
Islamic terrorism (regarded as major threat by Moscow) and crisis
management (North Korea, Middle East). Russian attempts to divide
the West and the EU are likely to continue. It is important that
the EU is perceived as developing its own united policy towards
Russia and not following any line laid down by Washington. The
EU and US have different interests (eg trade and energy) with
regard to Russia but this should not hinder a frank exchange of
views on Russian foreign policy within the transatlantic dialogue.
4. EU-Russia relations
The EU has a major interest in a stable, peaceful,
prosperous, democratic Russia that is a reliable trading partner,
friendly neighbour and a supporter of an effective rules-based
international system. Both sides are committed to a new strategic
agreement that would replace the PCA. Russia contends that the
1997 PCA was negotiated during a period of Russian weakness and
expects that new negotiations will be carried out by two equals.
The EU contends that the PCA needs to be replaced in order to
provide a legal base for new policy areas that have been developed
over the past decade. These include sensitive areas of legal and
police cooperation, foreign and security policy as well as the
energy sector. Meanwhile there is much on-going business between
the EU and Russia with officials meeting regularly and progress
being made in different areas across the four "common spaces."
The networking between large numbers of Russian officials meeting
with their EU counterparts should not be under-estimated.
Work with Russia is progressing on many less
visible areas, not least in the area of justice and home affairs.
Meetings on trafficking of human beings, money laundering and
terrorist financing are held on a regular basis between the Commission
and the Russian authorities. Passenger data exchange also takes
place in the framework of the agreement on Kaliningrad. A priority
area should be improving the border crossing points between Russia
and the EU.
With regard to foreign and security policy cooperation,
Russia has shown little interest in the Common Foreign and Security
Policy (CFSP) and yet has sought to play a full part in the European
Security & Defence Policy (ESDP). There has been no consensus
within the EU, however, to grant Russia any special status. Many
member states have also pointed to the difficulties of cooperating
with Russia in this sensitive area when there are a number of
issues where both sides take very different views eg Kosovo, the
frozen conflicts. Nevertheless, given the importance of Russia
as a global actor, the EU should intensify efforts to work with
Russia in foreign and security policy. The "frozen conflicts"
can only be resolved with Russian involvement. Russia is a key
player with regard to Iran, an important player in the Middle
East and is keen to strengthen the multilateral system. The EU
should discuss with Russia possible changes to strengthen international
institutions, and seek to cooperate with Russia more in crisis
management, peacekeeping operations and civil rescue missions.
Earlier this year the European Commission revised
its external assistance programmes. The European Neighbourhood
and Partnership Instrument (ENPI) covers Russia but its financial
allocation for the period 2007-13 will not be extensive (approximately
250 million for individual country projects out of
a total of
12 billion). Conversely, Russia was the largest beneficiary
of EU financial assistance under the TACIS programme (40% of all
funding from 1991 to 2006). An independent evaluation of the efficacy
of that programme by the European Court of Auditors however, found
that the effectiveness of the funds had been low and it could
not assess the performance of the projects positively. In a number
of cases, the Court observed lack of real dialogue, major delays
in implementation and failure to present clear and realistic objectives
for the projects that had been financed. Many Russian NGOs, beneficiaries
of EC assistance, also refer to the heavy and complicated bureaucratic
mechanisms. The ENPI seeks to address the reasons behind such
shortcomings, at least as far as the Commission's role is concerned.
The results remain to be seen.
In recent years, trade in goods between the
EU and Russia has grown considerably. In 2006 Russia was the EU's
third most important trading partner behind the US and China.
EU exports to Russia have more than tripled, while imports have
doubled. The sharp rise of energy prices has resulted in a large
trade deficit (
70bn in 2006), but the margin has decreased. Energy
accounts for two thirds of the EU's imports while the main exports
are machinery and vehicles. In the same year, 32% of the total
EU exports to Russia came from Germany, by far the largest exporter,
followed by Italy and Finland. Germany also occupies the first
place in imports from Russia, followed by the Netherlands and
Italy.[19]
Even in countries with poor political relations with Russia, such
as Poland and Estonia, trade relations have gained considerable
momentum in the current decade.
While the PCA arrangements provide for "business
as usual" the opening of negotiations on a new strategic
partnership has been delayed due to a bilateral Polish-Russian
trade dispute. Russian pressure on Estonia and Lithuania, and
recent trade disputes with Sweden and Italy, has not helped create
an atmosphere conducive for negotiations. Some of the newer member
states have pressed the EU to adopt a tougher approach towards
Russia, a stance not necessarily accepted by other member states.
Chancellor Merkel, put the emphasis on EU solidarity at the Samara
summit but at the same time she insisted that solidarity requires
responsibility. The EU would be hamstrung in its relations with
third countries if every member state sought to block negotiations
because of a bilateral dispute. The smaller member states are
those likely to benefit most from a common policy towards Russia.
Given the political uncertainties on both sides, including changes
in leadership of Russia and some of the major member states, the
negotiations—whenever they start—may last for at least
two years with a further two years for ratification. The EU has
a number of strong cards to play including the sheer size of its
internal market, its consumption of Russian energy (in a global
market), its technology and its know-how in finance, social, environmental
and regional issues.
Russia is one of Europe's main energy providers.
Many EU member states (especially new member states) are heavily
dependent on Russian natural gas and oil for their domestic energy
consumption needs. In absolute figures, Germany is the largest
importer of both Russian gas and oil. The past few years have
seen a tension in EU-Russia relations because of the rise in energy
prices and Russia's assertive behaviour with some of its other
neighbours (Ukraine, Belarus, Georgia, Moldova) in reviewing the
terms for energy supplies. This has led to recent proposals from
the European Commission for the creation of a comprehensive European
energy policy. The latest such proposal, the Third Legislative
Package for the EU electricity and gas markets[20]
contains safeguards against majority ownership by foreign businesses
of EU electricity and gas networks. A clause of reciprocity in
unbundling and other legal requirements is proposed. Furthermore,
foreign control of a Community transmission system will be permitted
only by way of bilateral agreements between the EU and the third
country. Russia has considered these proposals as directly threatening
Gazprom's intentions to invest in European energy assets.
Despite the difficulties of achieving a common
EU approach towards Russia, it is incontestable that all member
states, including the UK, are likely to be more effective in securing
their aims by speaking with one voice. This applies to the security
of energy supplies, investment protection to tackling international
issues such as climate change, Kosovo, Iran and terrorism among
other topics. At present, however, Russia finds it relatively
easy to divide member states by offering energy deals. These are
partly a reflection of short-term political and economic interests,
and partly due to the absence of any real EU competence in the
energy field. If the EU was given the power to negotiate with
Russia on energy it would greatly improve the situation.
At present the EU and Russia seem to be talking
"past" each other, with Russia playing the energy power
card and (most of) the Europeans insisting on values as part of
discussions. It is vital to explain to Russia that a rules-based
system is very much in its own interest, not least in helping
to provide a more stable environment for domestic and foreign
investment. The EU might also emphasise more its willingness to
help Russia diversify its economy, bringing know-how and technology
that is absent in Russia today. The present lop-sided trading
relationship is not healthy in the long-run for either side. The
EU should stress its desire to see a prosperous, democratic Russia,
as a long-term political and economic partner across the board.
5. Russian views of the EU
How does Russia see the EU? The official line
is that Russia is eager to work with the EU. But the state media
rarely provide any positive coverage of the EU. According to EU-
Russia Centre research undertaken earlier this year, 71% of Russians
do not consider themselves to be European and just over half view
the EU as a threat to Russian interests[21]
The EU, therefore, has a major task ahead in engaging with Russians
across the spectrum to inform them about the EU, to emphasise
the importance of European values and to strengthen democratic
forces in Russia. That engagement needs to take place among the
leaders of tomorrow and will only be achieved by developing an
understanding and appreciation of one another's cultures.
There needs to be a vast increase in the number
of student exchanges and serious consideration should be also
given to abolishing visas, encouraging more visits to EU countries
by Russians from all walks of life, giving them exposure to different
values and societal systems. This would have an immediate and
positive impact on people to people contacts. The previous EU
cooperation and assistance programmes (TACIS) had only a marginal
effect in Russia and one should not have over-high expectations
of the new instruments.
6. VALUES
The EU and Russia tend to overlook each others'
values. Some member states have downplayed the importance of values
in dealing with Russia. But the pendulum is now swinging the other
way, partly due to changes in the leadership of several member
states, partly due to the urgings of some new member states and
partly due to developments in Russia, eg more than 25 journalists
have been murdered in Russia in the past five years. The negative
view of Russia in Europe was given a further blow with the murders
of Mrs. Anna Politskovskaya and Mr. Alexander Litvinenko- both
fierce critics of the regime and president Putin personally. These
developments are causing concern in Europe about the direction
in which Russia is heading. In September 2007, Transparency International
ranked Russia as one of the forty most corrupt nations of 180
of the world's countries, while the World Bank ranked the country
as the 106th easiest country to do business from a list of 178.
If there is a further slide in popular attitudes towards Russia
it may be impossible to get a new treaty ratified by all 27 member
states. The bottom line for the EU must be to insist that Russia
respects the commitments it entered into on democracy, human rights
and the rule of law in the PCA as well as the Council of Europe
which it joined in 1996.
CONCLUSION
EU-Russia relations are at a crossroads. While
it is tempting for some EU member states to strike bilateral deals
with Russia the EU should seek to promote a united front towards
Russia and ensure that its values remain at the forefront of any
negotiations. A sound and long-term relationship cannot be built
between two actors who do not share common values. The EU's primary
interest should be to help promote a stable, democratic and prosperous
Russia that enjoys the same civil liberties and rule of law as
EU citizens. The negotiations for a new strategic partnership
should be judged on whether they promote these aims. The UK should
thus strongly support a common EU policy towards Russia.
15 October 2007
17 Russia is the largest supplier of applications to
the European Court of Human Rights. On 1 February 2007 the Court
was dealing with 92 150 cases, 20 250 of which (22%) had come
from Russia. The number of complaints from Russia is constantly
increasing: in 2001 they were 2 490, in 2002-4 716, in 2003-6
602, in 2004-7 855, in 2005-10 009, in 2006-10 569. In 2006 the
European court passed 249 judgements concerning cases from Russia,
202 of which the country lost and paid out €1,370 and one
million roubles in compensation to victims. Source: http://www.pytkam.net/web/index.php?go=News&in=view&id=629&SNS=c81db9ceae70f43
dcebeca3fa44290c8 and http://www.bellona.org/articles/justice-european Back
18
http://www.gks.ru/scripts/db-inet/dbinet.cgi Back
19
European Commission Press release A EU27 external trade deficit
of almost €70 billion with Russia in 2006, 15 May 2007, http://europa.eu/rapid/pressReleasesAction.do?reference=STAT/07/65&format=HTML&aged=0&language=EN&guiLanguage=en Back
20
http://ec.europa.eu/energy/electricity/package_2007/index_en.htm Back
21
Voices from Russia: Society, Democracy and Europe, EU-Russia Centre
December 2006. Back
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