Europe?s Russia problem

This article was published by Project Syndicate.  

NEW YORK – How should Europe react to the rise of a hostile Russia on its eastern flank? Different countries have reacted differently, influenced by their historical experience and their economic interests. Yet it is essential for the European Union to develop a unified policy, reconciling these divergent national interests and attitudes.

Europe cannot afford not to resist Russia’s geopolitical aggression, and it needs to be unified to have any chance of success. Yet, the unified European policy must not be purely geopolitical, because if it were, the common interest would not be strong enough to override national interests. Russia could divide and conquer as it is doing already.

In purely geopolitical terms, Russia holds the stronger hand. Europe’s superiority lies in its values and principles as an open, democratic, peaceful, prosperous, and law-abiding society. These values hold great attraction for the people in the former Soviet Union-and that includes the leaders as well as the masses, in spite of the fact that the West did not back up its values and principles with deeds in the past. As a result, admiration of and aspiration to European values is mixed with disillusionment and resentment, and the Putin regime has been able to gather enthusiastic support by baiting the West and scoring well in the geopolitical game.

Nevertheless, Russia remains susceptible to Europe’s allure. Historically, Russia always aspired to be part of Europe, and the Putin regime recognizes that it would pay a big price if it sought to return to the Soviet Union’s isolation.  

But Russia’s strengthened geopolitical position vis-à-vis Europe obscures grave weaknesses in other areas. Its authoritarian political system stifles private enterprise and innovation. The rule of law is absent, and much more effort is spent on extortion and rent collection than production. Consequently, economic progress has not kept pace with the accumulation of oil revenues. These deficiencies became accentuated by the decline in the price of oil.

Another great weakness is demography. Russia has immense territory but only 140 million people. A growing portion of the population consists of Muslim minorities with higher birthrates than ethnic Russians. Overall population is expected to drop by 10 million in a decade.

Resource rich but sparsely populated Siberia is bordered by resource-deficient but teeming and rising China. If the Central Asian republics are cut off from the West, they are liable to turn to China in order to avoid becoming totally dependent on Russia.

In the long run, Putin’s baiting of the West may turn out to be as self-defeating as Saakashvili’s baiting of Russia. But in the short run there is a real danger that Russia will pursue its age-old aspiration of becoming part of Europe by seeking to become the dominant entity.

In these circumstances, Europe needs to pursue a two-pronged strategy. On the one hand, it must protect itself against the geopolitical threat posed by a newly assertive and adventurous Russia. On the other, it must seek to replace the rule of force with the rule of law, and geopolitics with the pursuit of democracy, open society, and international cooperation.

The European Union could not possibly forge a common policy without such a two-pronged approach. There would be too many freeloaders and defectors in a purely geopolitical game, but in a two-pronged approach each member state could find its proper place.

The key to neutralizing the geopolitical advantage that Russia enjoys is to establish a unified energy policy with a Europe-wide regulatory authority which has precedence over national regulators and a Europe-wide distribution network. This would deprive Russia of its ability to play one country against another, because a concession granted to one national distributor would immediately become available to customers in all the other countries.

Energy companies are beginning to realize this and becoming less resistant to a common European energy policy. That would also serve another shared objective, namely helping to bring climate change under control.

The other prong, promoting the rule of law, international cooperation, and the principles of open society has to be pursued indirectly, by reforming the international financial system and by paying special attention to Russia’s near-abroad. Ukraine, in particular, is in a perilous state, but financing public works that would create jobs in eastern Ukraine, where the steel industry is in distress, could make a major difference both politically and economically.

Georgia must also be helped to recover from the damage inflicted by the Russian invasion, but help should be contingent on the Saakashvili regime observing the principles of open society. Russia cannot be helped directly because of its excessive reliance on arbitrary state power, but when Russia sees progress in international cooperation, particularly with China, it will not want to be left out in the cold.

Strengthening and supporting the former Soviet republics would serve both prongs of a unified EU policy towards Russia. It would be against open society values if Russia were allowed to turn these countries into satellites just because it has superior military force. And Europe has a geopolitical interest in keeping them open as sources of energy supply.

George Soros is Chairman of Soros Fund Management.  His latest book is Reflections on the Crash of 2008.

Copyright: Project Syndicate, 2009.
www.project-syndicate.org