European Council on Foreign Relations

A ?Power Audit? of EU 27-Russia relations

  Analysis reveals that EU disunity allows Moscow to dominate

7, November, 2007 - Despite its economic strength and military might, the European Union has begun to behave as if it were subordinate to an increasingly assertive Russia. This dramatic change in the power relationship is rooted in the EU's disunity and self-doubt - but both can be fixed.

This is one of the conclusions of the first-ever 'Power Audit' on bilateral EU-Russia relations, conducted with the participation of national experts from 27 EU member states. The report is published today by the European Council on Foreign Relations (ECFR), a new think-tank and advocacy group.

"Today, it is the Kremlin that sets the agenda for EU-Russia relations, and it does so in a manner that increasingly defies the rules of the game," says Joschka Fischer, former German foreign minister and ECFR's co-chair. "The reason for that is the disunity of the EU. This must change."

The EU's failure to agree on a common Russia policy has allowed the Kremlin to increase its leverage over the EU, through signing bilateral energy deals, playing the Kosovo card, asserting itself in the common neighbourhood, and dragging its feet on preventing nuclear proliferation. During the Putin years, Moscow had bilateral disputes with 11 EU countries, including the Litvinenko affair with the UK, the Polish meat ban, and trade disputes with the Netherlands.

"Russia is the most divisive issue in the EU since Donald Rumsfeld and the Iraq war," says Mark Leonard, ECFR's executive director and one of the report's authors. "But Russia's power is deceptive: the EU's combined economy is 15 times the size of Russia's, its military budget is seven times higher, and its population three times the size of Russia. If European countries unite around a common strategy, they will realise how powerful they really are."

The ECFR report says that EU governments are torn between two dominant approaches to Russia. One side sees Russia as a threat that needs to be managed with 'soft-containment', the other sees the country a potential partner that can be transformed through 'creeping integration' into the European system.

Within those, the analysis identifies five distinct categories of countries. Greece and Cyprus are referred to as 'trojan horses' whose governments often defend positions close to Russian interests, and who have been willing to veto common EU positions. The study reveals little-known facts such as Cyprus being the biggest official 'investor' in Russia, due to the amount of Russian capital which is saved there.
Germany, France, Italy and Spain are described as "strategic partners" - whose governments have built special bilateral relationships with Russia, which has sometimes cut against the grain of common EU objectives in areas such as energy and the EU Neighbourhood Policy.

Ten countries - Austria, Belgium, Bulgaria, Finland, Hungary, Luxembourg, Malta, Slovakia, Slovenia and Portugal - are labelled as 'friendly pragmatists' whose governments have a less close but still significant relationship with Russia, in which business interests come first. Their policy tends to follow pragmatic business interests, opting for a path of least resistance in political disputes. In Bulgaria, for instance, the government has strong economic links with the Russian company Lukoil, which generated more than 5% of Bulgaria's GDP and around 25% of its tax revenues in 2003.

ECFR identifies nine further countries - the Czech Republic, Denmark, Estonia, Ireland, Latvia, the Netherlands, Sweden, Romania and the United Kingdom - as 'frosty pragmatists'. While keeping business interests high on the agenda, the governments of these countries have not refrained from criticising Russia's human rights record and failings on democracy.

Finally, Poland and Lithuania are described as 'new Cold-warriors' who have developed an overtly hostile relationship with Moscow and are willing to use the veto to block EU negotiations with Russia.
The report argues that the five groups of the EU need to unite around a common approach - one that reflects the EU's long-term strategic interests. To reverse the 'asymmetric interdependence' that is currently in Russia's favour, the authors recommend for the European Union to:

- Push for the implementation of all international agreements and standards Russia has committed itself to, in order to further promote the rule of law;
- Make Russia's participation in G8 summits conditional on its commitment to the spirit and the letter of common agreements, with the threat of organizing more low-level meetings within the G7 format should Russia be uncooperative;
- Introduce the policy of 'principled bilateralism' where EU governments are expected to use bilateral links to serve common EU goals and introduce an early warning system to inform of impending energy deals or bilateral disputes;
- Make the EU Neighbourhood Policy more efficient to encourage participating countries to respect the rule of law and draw them further into the EU's orbit;
- Give the European Commission political backing to use competition policy to investigate energy deals; and authorise it to pre-approve major energy deals;
- Provide assistance to Turkey, Ukraine and Moldova in implementing the EU's energy acquis communautaire.

Download the full report

NOTES TO EDITORS

1. The report entitled 'A Power Audit of EU Russia Relations', by Mark Leonard and Nicu Popescu, is published by the European Council on Foreign Relations on 7 November 2007. This report, like all ECFR publications, represents the views of the authors, not the collective position of ECFR or its founding members.
2. Mark Leonard is Executive Director of ECFR and author of "Why Europe will run the 21st Century". Nicu Popescu is a policy fellow at ECFR.
3. For interviews with the authors, please write to press@ecfr.eu, or call 4478 7677 5034.
4. Launched on 2 October 2007, the European Council on Foreign Relations is a new pan-European initiative for research and advocacy, co-chaired by Martti Ahtisaari, Joschka Fischer and Mabel van Oranje. With offices opening in seven EU capitals, its mission is to analyse the EU's foreign policy performance and to promote a more integrated EU foreign policy.
5. ECFR will hold its official launch conference in Berlin on 9 November. Speakers include Frank-Walter Steinmeier, Martti Ahtisaari, Emma Bonino, Joschka Fischer, Timothy Garton Ash, Ivan Krastev, Mart Laar, and Mabel van Oranje.

 

 


Comments for this entry are closed.

#2

Interesting conclusions. Could you reveal what methodology the reasearchers used to describe their countries’ economic, political and military relations with Russia?

Jon Ender | 08 Nov 07, 08 Nov 07 EST
#3

Sometimes past knowledge prevent undestanding changes in world. EU need ыекщтп Russia, if europeans don’t want to fight for natural resourses with contries of Middle and Far East.

Alexander Svayazhin | 08 Nov 07, 08 Nov 07 EST
#4

Janusz Bugajski has brilliantly observed the early trends of today’s Russian foreign policy (Cold War: Russia’s New Imperialism). This ECFR research is doing a great job in emphasizing how Bugajski’s fears have become reality. However it is only half a job - the biggest challenge is to convince the policy makers of EU countries, fragmented on foreign and security issues, on the need to consider the substance of this study while drafting national and hopefully EU policies.

I would also like to disagree with Alexander. I assume he means that EU perceives Russia through its Cold War experience with Soviet Union. In this case it is useful to step back and look at the EU-Russia relationships over the last 15 years. While EU is a slow learner, it started to react to some Kremlin’s unfriendly moves only recently. It is clearly shown in the research, if you had time to read it. EU needs Russia - it is a no brainer, yet this does not mean that Brussels has to yield to Russia’s attempts to influence EU. Then, talking about “Europeans fighting for natural resources with Middle and Far East” is rather an instance of mirror imaging effect, than a possible real-life scenario.

Dumitru Minzarari | 09 Nov 07, 09 Nov 07 EST
#5

Where was the EU when the UN devised the Annan Plan which essentially legitmised the Turkish invasion in 1974? Where has been the EU on the constant Turkish flyover into Greek territory? Where has the EU been when Turkey will not reopen the Halki Seminary?

The so called Trojan Horses, Greece and Cyrpus, are looking out for their own interests as no one else seems to be interested (apart from Russia) in rectifying injustices.

Hermes | 09 Nov 07, 09 Nov 07 EST
#6

I disagree that EU is mighty militarily. What drives European security is NATO and the two most powerful conventional entities in NATO are the US and Turkey, none of which are EU members. Truth of the matter is that when you compare the EU with Russia, you are comparing apples and oranges; you are comparing a fractured supranational entity with a unitary political state.

Alex | 10 Nov 07, 10 Nov 07 EST
#7

I represent the International Committee of the Red Cross in the Russian Federation and cover all CIS countries. I would like to receive all your publications and reports.
As I come close to retirement, I wonder if it would be possible to cooperate:
-  I started my carreer working for the European Commission for a few years (Development, DG VIII and Paris Office);
- I was head of ICRC for Central Europe for 4 years, based in Budapest.  I am familiar with all new EU countries, their governments, parliaments, armed forces and have an extensive network of interlocutors within think tanks, universities, NGOs, medias…

I would be more than happy to join forces.

With regards,

Patrick Zahnd

PS:  This report is of real interest for my work.

Zahnd Patrick | ICRC, Moscow | 12 Nov 07, 12 Nov 07 EST
#8

I have posted a critique of this report on the European Tribune website:
http://www.eurotrib.com/story/2007/11/11/162456/18

I’d really be interested to understand what the authors of this report mean when they talk about a European energy strategy, because I am absolutely unable to understand what it is, apart from saying “what is our gas doing under their toundra”?

Jerome Guillet | 12 Nov 07, 12 Nov 07 EST | www
#9

Jerome, you are much more preoccupied with the US, but a few points would be useful to correct some of your factological claims:

- the energy companies of ukraine and moldova are not unbundled (neither de jure, nor de facto). MoldovaGaz sells gas is the monopolist gas distributor and transporter. In Ukraine Nahtohaz Ukrainy, as well as a joint venture between Nahtohaz and Rossukrenergo (itself a 50/50 Firtash-Raiffeisen and Gazprom entreprise), called UkrGaz Energo are selling gaz to end-consumers - industrial and households. So there is no way one could call Naftohaz an unbundled company. 

-Nabucco actually hopes to get Azeri, Turkmen, and maybe at some point Iranian gas. Not Russian.

nicu | 13 Nov 07, 13 Nov 07 EST
#10

Jon,

researchers from each EU member state were asked to respond to 15 questions on their countries’ relations with Russia. They were asked questioned about the level of investments, trade, energy links and dependence, number of mutual visits, military cooperation, trade and political disputes, as well as analytical questions about how Russia is perceived in each of these countries etc. so ECFR received 27 questionnaires most of them being into 10 pages each (some of them shorter, and some of them longer).

nicu | 13 Nov 07, 13 Nov 07 EST | www
#11

A short comment: Lot’s of stereotypes, nothing real new, no helpful advice especially the silly proposal of an “avantgarde”: poor paper for a challenging topic. Good that there are better institutions to give foreign policy advice.

Hans-Joachim Falenski, senior foreign policy adviser, CDU/CSU Parliamentary Group, German Bundestag

Hans-Joachim Falenski | 16 Nov 07, 16 Nov 07 EST
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