EU-Russia Relations: The winter is coming

On the Eastern border of the European Union extends the world’s largest country, Russia. This ex-Eastern superpower is now in the hands of Vladimir Putin, a kind of an “elected” despot, who has been lately increasingly turning his back at the European Union.  With the cancellation of the South Stream project, which would have brought more Russian gas into the EU, a colder period of EU-Russia relations is at the horizon. This week, read more on EU-Russia relations, which issues cannot be agreed upon and why Europeans are not too worried about the cancellation of the South Stream.

EU-RUSSIA: THE SUSPICIOUS PARTNERS

Russia is the largest neighbour of the European Union and its third largest trading partner. The import of Russia’s energy into Europe represents and important market share in the Union.

Although Member States have developed various levels of relations with Russia, the first ever common European foreign policy was towards this Eastern neighbour. In the 1990’s it was enshrined in the Partnership and Cooperation Agreement which is still in force today. This could have been a consequence of the end of the Cold War when the countries of Western European integration wished to maintain positive relations towards the successor of the Sovier Union. They soon understood that they are stronger together than individually, and that the military power of Russia can be countered only by by pooling their political strength.

Currently, the EU-Russia relations are based on based on four common spaces:

• Economy and environment,
• Freedom, security and justice,
• External security,
• Research and education, including culture

In 2008, negotiations to upgrade EU and Russia relations were kicked off. A new agreement should provide a more comprehensive overview of the areas for cooperation and legally binding provisions in the fields of political dialogue, security, freedom, economic cooperation, research, education and culture and other. The most Progress Report can be found here. In particular, the areas of the rule of law and judiciary were being discussed in detail.

More information on EU-Russia relations can be found on the sites of the European External Action Service.

UKRAINE – LET’S BOYCOTT EACH OTHER

The European foreign policy includes a number of instruments which can serve as influence on the third countries and can be used in case that the Union disagrees with their actions. As the EU does not have its own army and military intervention in principle not even in line with its philosophy, the use of so-called soft approaches, which include sanctions, is common. Sanctions can be targeted towards a country or a region itself, but for the most effective are those sanctions targeting key individuals responsible for the situation at hand.

In the case of the Ukrainian crisis, a series of sanctions was adopted by the EU and mainly targeted Russia as response to the annexation of Crimea and deliberate destabilisation of the situation in Ukraine:

• Termination of visa negotiations
• Termination of negotiations on a new EU-Russia agreement
• Discontinuation of programs EU-Russia (including the European Investment Bank and the European Central Bank)
• Limit of access to European capital markets for certain Russian actors (such as a ban on the operation of services of some Russian banks in the European banking market)
• Restrictions on exchange of information and certain types of technologies (including in the energy sector)
• Restrictions on imports of certain Russian products
• Restrictions on cooperation in the field of defense (for example, France has not delivered a warship produced for Russia before the start of the crisis in Ukraine)
• Ban on business and investment in Crimea
• Travel ban and assets freeze for certain key persons.

Naturally, Russia took retaliatory measures and banned the import of certain products in from the EU into Russia, but EU citizens didn’t suffer serious consequences. Perhaps it only made us buy more local fruits and vegetables, sold by farmers at a lower price. More about this can be found on the EurActiv and EPthinktank.

More information on sanctions in connection with the Ukrainian crisis can be found here and here.

SOUTH STREAM – SHOWING MUSCLES

The latest action of the Russian President Vladimir Putin was to announce the cancellation of the  South Stream project. This is a pipeline, which would bring in Russian gas into Southern Europe. Putin blamed the decision on the rigid EU legislation in the field of energy infrastructure. According to Euobserver, the European Commission President, Jean-Claude Juncker, responded by saying that “Putin is bluffing” and wants to scare the European Union and buy some peace from nagging EU leaders.

On the one hand, it could be said that the South Stream was “killed” by the EU legislation itself, in particular the internal rules concerning monopolies in the energy market (as also reported by Euobserver). EU rules provide that infrastructure should be available to all bidders and Russian Gazprom was not willing to share the pipeline with other potential stakeholders. At the same time, the European Commission can now formally supervise arrangements of individual Member States with external partners in the field of energy infrastructure. Any agreement must be reported to the European Commission, which the verifies compliance with the common EU legislation.

The Russians probably did not expect that Europe will take its own rules so seriously and maybe they wanted to scare Europeans of a cold winter. Unfortunately (in fact, fortunately for us), this year’s warm winter is not exactly playing in their hand. And European leaders are already preparing a range of ideas on how to replace the Russian gas with indigenous alternative energy sources and other sources from old and new international partners.