The continuing crisis in Ukraine means that the EU's relationship with Russia has reached a critical juncture, and that the EU and its Member States need fundamentally to reassess it.
In this report, we consider the factors that have contributed to the decline in the EU-Russia relationship, attempt to draw lessons for the future, and consider how the EU and its Member States should respond to a changed geopolitical landscape. We ask how the EU and Member States should engage with Russia in the future, based on a sober assessment of the Russia that exists today. The majority of our evidence was received between July and December 2014, and we wrote this report in January and February 2015. Our purpose has not been to analyse events in Ukraine as they unfold but rather to consider the causes of the conflict and the implications that go beyond the immediate crisis.
Our analysis suggests that Russia has been gradually turning away from Europe. Internal political changes within Russia have contributed to a divergent political and economic outlook between the EU and Russia. In turn, the EU has failed to build an institutional framework that could have underpinned a more robust relationship and Member States have not provided the necessary political oversight to the Commission's trade negotiations. Disagreement over the 'shared neighbourhood' has given way to outright confrontation and competition for political control, and the creation of the Eurasian Union, a new political and economic entity, could have significant consequences.
We also observe that there has been a strong element of "sleep-walking" into the current crisis, with Member States being taken by surprise by events in Ukraine. Over the last decade, the EU has been slow to reappraise its policies in response to significant changes in Russia. A loss of collective analytical capacity has weakened Member States' ability to read the political shifts in Russia and to offer an authoritative response. This lack of understanding and capacity was clearly evident during the Ukraine crisis, but even before that the EU had not taken into account the exceptional nature of Ukraine and its unique position in the shared neighbourhood.
In the short term, it is likely that the EU's engagement with Russia will focus on the situation in Ukraine and Crimea. We welcome Member States uniting around an ambitious package of sanctions and hope that this continues. However, a strong sanctions policy requires a well-defined exit strategy that is clearly communicated. Therefore, if there is genuine progress on the Minsk Protocol, Member States should be prepared to ratchet down these sanctions. On the other hand, if there is a further deterioration in eastern Ukraine, the EU should move to target individuals close to the regime and broaden sanctions into the Russian financial sector. The dismemberment of a sovereign independent state is not acceptable.
In the shared neighbourhood, the EU and Member States face a strategic question of whether Europe can be secure and prosperous if Russia continues to be governed as it is today. Whatever the present Russian government's real intentions may be, Russia's internal governance and its resulting threat perceptions create geopolitical competition in the neighbourhood. The EU's capacity to influence the internal politics of Russia is limited, and Member States have not demonstrated an appetite to make the attempt. Therefore, if influencing Russia's future governance is not on the agenda, Member States instead need to devise a robust and proactive policy to manage competition with Russia in the shared neighbourhood.
In the long term, the EU, Member States and Russia must learn to live with each other as neighbours, as important players in the United Nations, and as regional powers. Dialogue between the EU and Russia has to be maintained, particularly on the many issues of shared strategic interest, such as a common economic space and a new European security architecture. The EU should also develop a coherent policy approach towards the Eurasian Union in order to explore the extent to which Russia is willing to enter into a more co-operative relationship. Even while relations with the Russian government are strained, links with the Russian people should be maintained through continuing co-operation in the fields of culture, education and science. While maintaining its guard and refusing to give way on points of principle, the EU should make clear its desire to prevent the present crisis from deteriorating into something resembling the Cold War, and invite Russia to respond.