Europe and Russia: together – like it or not

The recent EU-Russia summit did not achieve progress on the issues which most trouble Euro-Russian relations, confirming a divergence of approach between the two sides on energy supplies, but also more broadly on the respective spheres of influence.

The meeting held on May 22, 2009 in the Siberian town of Khabarovsk mainly dealt with energy security. One quarter of the European gas supplies comes from Russia, and 80% of that transits through Ukraine. The EU is pressing both Russia and Ukraine to give solid guarantees that crises on energy supplies – the latest of which erupted last January – will not take place anymore. Brussels has also long sought to regulate the sensitive energy relations with Russia on the basis of the Energy Charter Treaty, which the Kremlin apparently deems an excessive constraint and still refuses to sign.

Competition on energy resources between the EU countries and Russia has actually intensified the last few months (see timeline below), but the underlying interests are at least a decade old.

Putin has sought to build up a de facto state monopoly on energy supplies to Europe as a crucial political tool in Euro-Russian relations. The forceful dismantling of the private company Yukos and the concentration of energy assets in the state-owned Gazprom should be seen as a deliberate geopolitical plan pursued by Moscow.

The European approach has been quite contradictory, reflecting the plurality of interests and centers of authority in the EU system. In particular, Germany and Italy have pursued a strategy of intense engagement with Russia aimed to ensure national energy supplies respectively through the Nord Stream and South Stream pipelines. Yet, Nord Stream is heavily criticized by Poland and the Baltic States, while South Stream is a direct competitor to the EU-backed Nabucco pipeline. The European picture is further complicated by the ownership of some oil companies: for instance, Gazprom holds 50% of the joint venture which manages the Austrian energy hub of Baumgarten, where both Nabucco and South Stream would be connected to the European gas grid.

Despite these enduring differences among EU member states, the adoption of a common European position is still theoretically possible, based on two assumptions: the need to diversify energy supplies and the importance of anchoring energy relations with Russia to a legal and institutional framework. This approach reflects the long-standing “liberal” approach of relying on legal solutions and economic interdependence, but also the realistic recognition that the EU needs to present Moscow with a unified front to increase its (aggregate) bargaining power.

The diverging approaches on energy security between Russia and the EU are strongly affected by the geopolitical situation of former Soviet countries, where Russian and EU spheres of influence overlap. In early May the EU launched the so-called “Eastern Partnership”, comprising Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. The program envisages six levels of integration, up to  associate membership. It cannot be considered a preparatory step for EU membership nor a substitute for it, but rather a continuation of the Neighbourhood Policy. Indeed, it is focused on the traditional areas of international trade, energy, regional integration, administrative capacities, anti-corruption efforts, visa regime and migration.

It is very early to say whether the new “Partnership” will overcome the weaknesses of the Neighbourhood Policy. Yet, to the extent that the “Eastern Partnership” will enhance, in the long run, the ties between these countries and the EU, it might weaken Russian influence on its “near abroad”. Such a risk is probably behind President Medvedev’s blunt warning to the EU at Khabarovsk to “not turn into a partnership against Russia”.

Spheres of influence are clearly seen in a very different light in Moscow and Brussels. The Russian leadership is locked in a zero-sum game paradigm, consequently perceiving each EU gain of influence and security as an equivalent loss for Russia. Moscow has also been irked by previous enlargements of both NATO and the EU itself towards Russian borders, and is determined to avoid a similar ultimate outcome with Ukraine and Georgia.

The European leadership, instead, pursues a win-win paradigm which can also be described as liberal and post-modern: one that would bring mutual advantages to all parties involved – though not necessarily in equal measure. At the very least, the liberal elements are meant to assuage Russian fears and project “soft” – rather than hard – power. Thus, the very countries included in the “Eastern Partnership” could serve over time as a bridge between Russia and Europe, rather than mark the next stage of the EU’s territorial enlargement. In this context, the stabilization and economic integration of the Euro-Asiatic region would clearly benefit Russia itself: this is the promise of a win-win strategy.

The key question mark is now the Russian reaction to the paradigm proposed by the Europeans. Three main scenarios can be envisaged. First, Moscow might conclude that the liberal elements of the EU approach are little more than a smart way to cloak traditional European ambitions to broaden the Western sphere of influence – in which case is would certainly oppose any such plan. In a second scenario, the Kremlin would trust Europe’s benign intentions, but would calculate that EU policies are the consequence of the other side’s weakness; Russia would then continue to seek an arrangement based on its own Realpolitik terms. In the third scenario, the Russian leadership would trust the Europeans and decide that the win-win principle is acceptable and indeed a good deal. This would pave the way for genuine convergence.

Unfortunately, the lack of any tangible result at the Khabarovsk summit is a sign that all options remain open.

Timeline
• May, 15 – Moscow. Gazprom, ENI and other energy companies from Greece, Bulgaria and Serbia signed an agreement to realize the South Stream pipeline. South Stream would bring Siberian gas to Southern Europe through the Black Sea bypassing Ukraine.
• May, 8 – Prague. EU summit with Turkey, Armenia and Azerbaijan adopted a declaration to relaunch the Nabucco pipeline, aimed to transport Caspian gas through these three countries to the EU bypassing Russia.
• March, 24 – Brussels. EU agreed with Kiev a deal to modernize the Soviet-era Ukrainian pipelines, investing 2.5 billion euros in a project without any Russian involvement.
• The Nord Stream pipeline directly links Russia and Germany through the Baltic Sea and will enter the construction phase in April 2010.