The Eastern Partnership in crisis

THIS ARTICLE FIRST APPEARED IN THE EU OBSERVER

The EU has recently approved the Eastern Partnership
initiative, just at the moment when the global economic crisis is changing the
rules of the game in the Eastern neighbourhood, and elsewhere. Both Russia and the
EU will have fewer resources – money and political attention – to be too
preoccupied with the neighbours. The Eastern Partnership is not in crisis, but
will have to be implemented in times of crisis. So what is the likely impact of
the crisis on the Eastern Partnership?

The Eastern Partnership is an attempt to resuscitate the
European neighbourhood policy and focus EU’s political attention on the East.
But now the economic crisis is stealing the show. Concentrated on itself, with
the growing danger of protectionism inside the EU, and growing negative
attitudes to “foreign” workers, many aspects of the European integration
process, let alone the EU neighbourhood policy will come under strain.

Free trade and visa facilitation with the neighbours might
be the first to suffer. Visa-free talks will be delayed, and the temptation to
accelerate the building of “fortress Europe”
even higher. Many EU member states and neighbours are increasingly
protectionist. A near-collapsing Ukraine
has recently raised import tarriffs by an average of 13%, which puts under huge
strain EU-Ukraine talks on a Deep Free Trade Area. When EU member states
themselves are entering dire straits, it will also be increasingly 
difficult to commit more EU funding for the neighbours. The Eastern Partnership
was marketed inside the EU as being “budget-neutral”, implying that it would
not require additional money. Many bilateral assistance programs of (especially
new) EU member states directed at the Eastern neighbours will be cut. Many of
the Eastern Partnership’s champions among the new EU member states are hardest
hit by the crisis. They are likely to become more introvert and might lose
bargaining power inside the EU.

But the EU neighbourhood policy and the Eastern Partnership
are not likely to collapse. The perspective of deep free trade between the EU
and its neighbours was a mid-term one. For most EU’s neighbours, it was not
likely to materialise in the next 3-4 years anyway (negotiations last for
years, and the EU has only started them with Ukraine). Such talks might be
delayed by the crisis, but would not killed.

The economic crisis might also change the neighbourhood in
ways that can actually strengthen EU’s influence. For the last years, EU
assistance to its neighbours was considered “candies” as Moldova’s
president Voronin recently put it. And more often
than not EU’s neighbours did not need the support of institutions such as the
International Monetary Fund. They had huge economic growth (often into 10%),
huge inflows of remittances and a cash-rich Russia was providing them with
investments and assistance when necessary. Not anymore. Growth might turn into recession,
while Russia
is learning again how to count money.

As the neighbours are heading for rough times, EU funding
suddenly becomes more important in the neighbourhood than it was in times of
economic growth. EU funding to the neighbourhood (under ENPI) remains stable,
and even marginally increases with the Eastern Partnership. Suddenly, EU’s
voting rights in the IMF also become significant. The EU supported IMF bailouts
for Ukraine and Belarus. Thus
the EU can channel its influence through other channels as well. Bad times will
increase the scope for EU conditionality in the neighbourhood, and give the EU
an opportunity to actually accelerate its neighbourhood project. In other
words, in times of crisis the EU might be able to buy more influence for the
same money.