The EU and Russia: before and beyond the crisis in Ukraine - European Union Committee Contents


Wednesday 26-Friday 28 November 2014

Seven members of the Committee (accompanied by the Specialist Adviser and the Clerk) visited Berlin. The aims of the visit were to take evidence from relevant witnesses in Germany, and to explore German objectives and concerns regarding the EU's relationship with Russia.

Members visiting: Lord Tugendhat (Chairman), Baroness Bonham-Carter of Yarnbury, Baroness Coussins, Baroness Henig, Lord Lamont of Lerwick, Lord Radice, Earl of Sandwich.

In attendance: Dr Samuel Greene (Specialist Adviser) and Miss Sarah Jones (Clerk).

Day One: Wednesday 26 November

Committee on Eastern European Economic Relations

The Committee held a private discussion with Dr Eckhard Cordes, President of the Committee on Eastern European Economic Relations.

Day Two: Thursday 27 November

German-Russian Forum

The Committee took evidence from Mr Martin Hoffman, Executive Director, German-Russian Forum.

Mr Hoffman began by outlining the work of the German-Russian Forum, which was established 20 years ago to promote social initiatives between Germany and Russia. Members of the Forum included companies and individuals from all areas of public life, including scientists, civil society organisations and academics. The Forum did not represent the interests of business, though its activities were partly financed by businesses.

The German-Russian Forum also played a role in the Petersburg Dialogue. The annual Petersburg Dialogue forum was established in 2001 at the initiative of the Russian President Vladimir Putin and the then-Chancellor of Germany Gerhard Schroeder. The Petersburg Dialogue forum was aimed at increasing mutual understanding between Russia and Germany, to broaden bilateral co-operation between the two countries.

Mr Hoffman noted that in recent months there had been much debate in Germany regarding the stance that should be taken towards Russia. While many advocated taking a hard line, many others urged political leaders to take a more understanding approach towards Russia.

In Mr Hoffman's view, relations with Russia were now worse than during the Cold War. This was because, during the Cold War, Russia did at least have respect for the US. However, there was now much less dialogue between Russia and the West, and many Russian people had a general dislike for the West. This was partly due to a difference in approach. Mr Hoffman suggested that countries such as Germany were more inclined to focus on the details of agreements, such as the Petersburg Dialogue, whereas Russia attached more importance to signs and gestures which indicated respect for Russia. In recent years there had been a series of incidents whereby the West had caused offence to Russia. One example of this had been the Olympic Games held in Sochi, which had been a big event for Russia, but which Western media had criticised and some Western leaders had shunned.

In terms of the membership of the German-Russian Forum, Mr Hoffman noted that most of its members were young leaders. Although the Forum tried to enhance understanding between the two countries, there was often a lack of understanding and frustration at the approaches taken by the other nation. For example, some German non-governmental organisations working in Russia often wanted to promote democracy and proactively encourage change in Russia. However, young leaders in Russia were often less concerned about democracy and more worried about being able to access an open and unmonitored internet.

In terms of building a constructive relationship for the future, Mr Hoffman suggested that the EU needed to change its approach to Russia and focus more on the signs and gestures made towards Russia. As an example, Russian people felt that Russia made a great sacrifice during World War II in order to help Europe, but that this was not often recognised. Mr Hoffman suggested that politicians should, where possible, continue to include Russia in wider, cultural events, such as commemorations to mark World War II in 2015.

Mr Hoffman also felt that the EU needed to make a greater effort to separate the political conflict from the EU's relationship with Russian people. For the recent celebrations in Berlin to mark the falling of the Berlin wall, Mikhail Gorbachev had been invited. Mr Hoffman suggested that it would have been a sign of unity, and of respect for Russia's shared interest in Berlin's history, to have invited President Putin to those celebrations as well.

Mr Hoffman noted that Germany used to be thought of well by the Russian people, but that recent polls had shown that support for Germany was declining among Russian people and that, in Russia, there was a general feeling of disappointment with Germany. He recognised that there was significant pressure on Chancellor Merkel to be outspoken and to take a tough line towards Russia. However, Germany was still the best placed EU Member State to reach out to Russia and should try to use its shared history and past understanding to continue to engage with Russia.

Federal Chancellery

The Committee took evidence from Dr Christoph Heusgen, Foreign Policy and Security Adviser to Chancellor Merkel, Federal Chancellery.

Dr Heusgen outlined the ways in which he thought the EU should approach its relationship with Russia, and the actions that EU Member States should take in response to the current crisis.

First, he felt that the EU had a moral obligation to support countries under pressure from Russia. This included helping the citizens of Ukraine, who should have a sovereign right to choose the future path of their country.

Second, Dr Heusgen noted that if Russia did not follow international laws, then EU Member States had to remain unified and continue to impose sanctions that had an impact on Russia.

Third, he felt that the EU also needed to remain ready to talk to President Putin. Chancellor Merkel had spent many hours speaking to President Putin about the current crisis and the implementation of the Minsk Protocol. He added that there was always the offer of dialogue with President Putin.

Committee on Foreign Affairs, German Bundestag

The Committee held a private discussion with members of the Committee on Foreign Affairs of the German Bundestag.

Federal Foreign Office

The Committee took evidence from Dr Hans-Dieter Lucas, Political Director, Federal Foreign Office.

Dr Lucas began by noting that the Federal Foreign Office was exploring ways in which to resolve the current crisis in relations between the EU and Russia. The priority was to ensure that the criteria set out in the Minsk Protocol were met and that there was a ceasefire in Ukraine. Dr Lucas felt that Russia's annexation of Crimea was a reaction to events in Ukraine, rather than a pre-prepared plan. The possibilities for the future were unclear and it was possible that Crimea could end up as a frozen conflict.

Sanctions were not an end in themselves, but were a tool to achieve a change in Russia's behaviour. Dr Lucas felt there were signs that the sanctions targeted at particular people, and at the financial sector, were beginning to have an impact. Sanctions would only be eased if there was a change in Russia's behaviour.

There were two types of sanctions regimes. First, there were sanctions relating to the annexation of Crimea. There was no progress on Crimea and so the Federal Foreign Office was now considering whether tougher sanctions should be developed in this area. Second, there were sanctions regarding eastern Ukraine. There was also room for more positive progress in this area too.

Discussing the Eastern Partnership, Dr Lucas felt it was clear that the policy did not constitute an EU accession agreement. The European Neighbourhood Policy, and the Eastern Partnership, brought countries closer to the EU and offered the potential for those countries to integrate their economies with the EU through DCFTAs, but that was as far as the policies extended and they did not offer future membership of the EU.

Dr Lucas recognised that Russia was concerned about countries in the shared neighbourhood joining NATO. He noted that NATO had three main criteria for accession: the accession must enhance the security of the acceding country; the accession must enhance the security of existing members of NATO; and the accession must enhance the security of Europe as a whole. At the moment, Dr Lucas did not think that Ukraine would meet those criteria in order to join NATO.

Turning to the Eurasian Union, Dr Lucas felt that the Eurasian Union was a tool to restore Russia to greatness as a global power. However, he did not think that Russia planned further territorial expansions.

Both the Chancellor and the Foreign Ministry were working along a dual-track policy, which involved enforcing economic and financial sanctions, while also continuing to communicate with Russia. However, the amount of contact between the German and Russian governments had been reduced. In the past, there had been joint meetings of the German and Russian cabinets, which had been suspended. Apart from the Chancellor and Foreign Minister, most other ministerial meetings had also been cancelled, though meetings regarding sports and culture had continued.

According to Dr Lucas, the German government was convinced that Germany's position towards Russia could only be effective if supported by a broader EU consensus. It could sometimes be hard to achieve this consensus, but Member States had come together remarkably quickly to agree the sanctions regimes, which were also broadly in line with sanctions imposed by the US. The EU would need to consider whether to continue the sanctions in 2015 and the EU was working with the US to ensure that the sanctions policies of both were broadly in line.

Federation of German Industries

The Committee took evidence from Dr Markus Kerber, Director General, Federation of German Industries (BDI).

Dr Kerber began by noting that the crisis in Ukraine was the biggest external threat to central Europe at the moment, with the crisis affecting countries across Europe, whether or not they were members of the EU. According to the BDI, German exports to Russia had decreased by 17% in the period January-August 2014, compared to the same period the previous year. In monetary terms, this meant that exports had decreased from approximately €24bn to approximately €20bn.

In general, the BDI fully supported the political course of the German government and the economic sanctions against Russia. In its view, the EU had a strong role to play in the crisis and could not let Russia's breaches of international law go unanswered. Sanctions imposed by the EU were having a variable effect on different types of businesses in different countries. Some German companies were heavily dependent on business with Russia and were being hurt by the current sanctions regime. BDI knew from its partners that the sanctions had also brought the Russian economy under pressure.

There was some legal uncertainty regarding the sanctions regimes as some of the regulations lacked clarity in the text. The BDI was therefore lobbying for greater clarity in the sanctions. There was also the risk of an uneven enforcement of sanctions across EU Member States, as the enforcement lay within each Member State's competence. In some areas, it was felt that Germany had enforced the sanctions more stringently than other EU Member States. Alongside Germany, the UK and the Netherlands also tended to enforce the sanctions strictly, meaning that businesses in those countries suffered more. Dr Kerber felt that a lot of energy had been spent discussing which countries had been affected the most, which meant that the overall goal of the sanctions had sometimes been lost.

However, despite these concerns, remarkably there was still a lot of support for the sanctions among the German population and the German business community. In Dr Kerber's view, in some Member States there tended to be the view that if Russia's behaviour had not worsened then the sanctions should be lifted. However, the German position was that if Russia's behaviour had not improved, then the sanctions should continue. Dr Kerber noted that some Russian people felt as though Russia was encircled by the West, and that Germany was keen not to exacerbate those fears. However, those threat perceptions were not an excuse for Russia's actions in Ukraine and the sanctions were therefore necessary in order to send a strong message to Russia.

In terms of energy, work was underway to develop alternative supplies, but Dr Kerber thought that it would take at least a decade to build a supply chain for natural gas that was independent of Russia. He stressed that this work had been started before the current crisis and that it was not just a response to Russia's recent actions. Dr Kerber felt that it was important to help Russia to overcome its own dependency on fossil fuel exports.

When asked about corruption, Dr Kerber answered that corruption was not the biggest problem when it came to business in Russia. A bigger problem was that Russian businesses did not have freedom in the market. There were some fears that if you had potent consumers then you had potent citizens. Russia was therefore wary of the side effects that an open market economy might have for the stability of the country.

Roundtable discussion

The Committee held a private discussion with His Excellency Sir Simon McDonald KCMG, British Ambassador to the Federal Republic of Germany, Mr Bernhard Müller-Härlin, Program Director International Affairs, K½rber Stiftung, Dr Alexander Libman, Associate of Eastern Europe and Eurasia Division, Stiftung Wissenschaft und Politik, Dr Alexander Kallweit, Head of International Dialog, Friedrich Ebert Stiftung and Ms Beate Apelt, Desk Officer for East and Southeast Europe, Friedrich Naumann Stiftung für die Freiheit.

Day Three: Friday 28 November

Committee on the Affairs of the European Union, German Bundestag

The Committee held a private discussion with members of the Committee on the Affairs of the European Union of the German Bundestag.

British Embassy

The Committee held a private discussion with Mr Nick Pickard, Deputy Head of Mission, British Embassy Berlin.

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