To say, as some do, that the European Union has no policy towards Russia is inaccurate. The European Commission’s 2007-2013 country strategy paper for Russia is based on the four “common spaces” the EU and Russia agreed to create in 2003. It declares that “EU cooperation with Russia is conceived in terms of, and is designed to strengthen, a strategic partnership.”

To say that the EU is incapable of acting cohesively and effectively towards Russia is also inaccurate. In the negotiations with Russia over a plethora of issues raised by the last enlargement (such as access to Russia’s Kaliningrad exclave), the Union’s cohesion and discipline led to a successful and rational outcome. The EU would be in a much stronger position if similar discipline had characterised its handling of energy policy.

After a lengthy internal review process, the Union is now lumbering without much enthusiasm towards a negotiation with the new (or, more precisely, reshuffled) administration in Moscow about a successor to the 1997 Partnership and Cooperation Agreement (PCA). But is this a negotiation that will be grounded in reality? Has the EU drawn the right conclusions from the past decade? Does it have achievable objectives – or is it going to negotiate in a parallel universe?

The EU’s current approach to Russia was forged in the mid-1990s, and was imbued with benign aspirations. These were to encourage the building of (to quote the EU’s Common Strategy of June 1999) “a genuine strategic partnership, founded on common interests and shared values ….in particular democracy, human rights, the rule of law, and market economy principles.” As a long-term vision of the sort of relationship we would like to have with Russia, this seems entirely right; and, as I have argued before in the pages of Europe’s World, the EU needs to hold out a constructive vision of the future relationship, and to demolish any notion that we seek to encase Russia on the far side of a new dividing wall across eastern Europe.

But where the approach went wrong was to confuse the long and the short term, and to ignore what was actually happening in Russia. The 1997 agreement declared that a strategic partnership had been established (and subsequent documents have taken this as a fact). Patently it hadn’t. From 1994 onwards, and especially from 1998/9, Yeltsin’s Russia was moving away from the vision set out in the 1997 agreement. But the EU has remained on autopilot to this day, flying on the wrong compass course and heading further and further away from reality. It’s time to re-set the compass.

Reality means dealing with the Russian Federation as it is now – a state with which we have some interests in common, but by no means all; and with which we share some values, but by no means all. Reality means accepting that with Russia (as with China), the EU has a hugely important relationship with a powerful state that does not share our value system; and a state which will pay serious attention to the Union when it stands as one, but will treat it with contempt and insouciance when it fails to do so. Reality means absorbing what Russia’s leaders are saying and doing.

The Russian leadership has been telling us loud and clear for the past five years that it wants Russia to be accepted and respected as an independent sovereign power. It will act according to its own perception of its natural interests, and make hard-headed use of Russia’s natural advantages. It feels that the West took advantage of Russia’s weakness in the 1990s, and now that Russia has regained strength, it no longer needs to defer to the Western viewpoint. Russian politicians argue that they were ignored when, for example, NATO bombed Yugoslavia in 1999, and today have a right to expect their views to be taken into account, whether over Kosovo, missile defence, the CFE Treaty or NATO enlargement. The hard-liners among them, of course, go much further. To them, it is not just a case of Russia being ignored, but of the West plotting to weaken, undermine and even “dismember” the Russian Federation – however absurd this might seem to any half-rational person in the West.

“Reality means that Russia does not share our values system; and will pay serious attention to the Union when it stands as one, but will treat it with contempt and insouciance when it fails to do so”

Likewise the Russian leadership is in no mood to accept, let alone implement, the benchmarks for partnership inscribed in considerable detail in the PCA and the four “common spaces”, especially the “Common Space of Freedom, Security and Justice”. It argues that Russia’s course must be determined from within, taking account of the particular circumstances of Russia; and it will not accept the imposition from outside of Western definitions of democracy and freedom.

What this means is that the conceptual basis on which EU policy towards Russia has been built over the past decade is a chimera. Despite the Kremlin’s often vitriolic rhetoric (which may perhaps moderate when the new administration feels more secure) and the activities of certain revanchist elements, I do not believe that most Russians are looking for confrontation or for a fundamentally adversarial relationship with the West, because this would so obviously not be in their best interests. They are interested in cooperating where it suits them; they want to sit at the table – at all of the world’s top tables, in a seat befitting Russia’s status; but they are not ready to accept the terms, conditions, responsibilities, obligations and compromises inseparable from the “genuine partnership” proposed by the EU. Its time may come, but “partnership” is too ambitious a goal at this relatively early stage of the Russian transition.

So we need a new paradigm for the EU-Russia relationship. Or, rather, the EU has a choice. It could allow inertia to carry it forward into a new, grandiose Partnership and Cooperation Agreement, which would take it deeper into the parallel universe – because any new agreement by definition has to aim higher than its predecessor, even if the aspirations of previous deals are a very long way from being fulfilled. This would be a recipe for a long and unrewarding negotiation towards an outcome that lacked any credibility. Or both sides could stop for a reality check, and decide to fly back from outer space to planet Earth.

First, we should ask ourselves what we are dealing with in Moscow. What is the character and orientation of the new administration? The short answer is that it is too soon to tell. Policymakers in Moscow have stressed continuity, caution and pragmatism, discouraging notions that that there will be an early change of direction either internally or externally. This is logical, given that President Medvedev was not merely his predecessor’s nominee but has spent almost his entire working life in Putin’s entourage (which was not the case in the Putin/Yeltsin relationship). But, however close the personal relationship may be, the Medvedev/Putin tandem has moved Russia into uncharted waters. Power is being redistributed within the ruling elite. This has led to a great deal of manoeuvring and infighting between clans and interest groups over much of the past year, and the process is not at an end. What has appeared at long range to be a smooth and seamless transition has, on closer inspection, been a tense and bumpy affair. It may be another year or two before it is clear where authority lies, who aligns with whom, and how the administration is going to address critical questions in the Russian economy and society. Will the hard decisions be taken or put off? Will there be a new drive for modernisation, or will oil-fed inertia prevail?

Given this degree of uncertainty, the EU would be wise to take its time – not to rush into premature judgements or leap into new negotiations. Let Russia settle down first. Judge the administration on its track record.

Second, we need to be clear about the hierarchy of the Union’s interests. Our most vital interest is in ensuring the peace and stability of the European continent. This means that the EU, NATO and their member states need to cooperate with Russia on a wide range of hard and soft security issues. Our cooperation is most severely tested in the countries close to Russia’s borders, both members and non-members of the EU, that were once under Soviet control and are still generally seen in Russia in zero-sum terms as part of Russia’s natural “sphere of influence”. As the EU is not a military alliance, it is better placed than NATO to uphold the sovereign rights of these states in a way that should not be perceived as threatening to Russia. We have to convey to Russia that although inalienable, these rights need not be a source of conflict: Russia’s neighbours do not have to choose between Russia and the EU, but should naturally have strong relationships with both – which would be more beneficial to Russia than the counter-productive fractiousness of the past few years.

Self-evidently, the EU’s economic relationship with Russia, including energy but not only that, is for both sides another vital interest (and one which has roots deep in the Cold War period).

“EU and Russia need a new paradigm grounded in reality. Instead of a formula which raises unachievable expectations and thereby highlights our differences, we need to focus rigorously on the areas where we genuinely share interests”

But what about values? The EU has important relationships with many states where the divergence in values is even sharper than with Russia. From a western European point of view, the development of democracy and the better protection of human rights in Russia would be highly desirable; but these are not vital interests, in the sense that their absence does not threaten us or prevent cooperation in security or trade. The argument here is a different one. We have defined a “strategic partnership” as standing not only on “common interests” but also “shared values”. The lack of shared values is one reason why we do not have a genuine partnership. A partnership leaves plenty of room for disagreement, but embraces the understanding that when the chips are down the partners will find themselves on the same side. That degree of trust does not exist in the EU-Russia relationship.

Does this mean that the Union should take “values” out of the relationship? Not at all. To do so would be to ignore the principles which bind our union of democratic countries, and would also undermine the many people in Russia who wish to develop these values there. But we should stop pretending that values are shared where they are not; and we should inject a dose of realism.

Democracy is not a realistic benchmark, because the concept is open to different definitions and, much as we would wish otherwise, because there is little prospect that genuine democracy will even begin to develop in Russia within the next decade. A better measure would be respect for the rule of law at home and abroad, and for human rights. Russia has taken on specific commitments in these areas. Promoting the rule of law cannot be held to be destabilising, and improvements are clearly achievable. At the moment democracy is not a popular concept in Russia. But the Russian people would overwhelmingly like to see fairer and more effective implementation of the law, and the new president has spoken strongly in favour of this. We should work with the grain.

Third, what instruments should the EU employ? The Union needs to demonstrate a united purpose. There is a strong case for a clear and constructive statement of the principles guiding the EU’s approach to Russia, enunciated at the highest level, to act as a signpost for the future. The EU needs a single energy policy, not a plethora of bilateral deals undercutting the common interest; and an energy relationship with Russia which recognises the interdependence of the two parties. The Union is by far Russia’s largest export market. The two-way interaction of business has an educative effect, and growing economic interdependence (not just in energy) is an incentive to civilised behaviour. The EU should therefore facilitate increased trade and investment links in both directions, along with Russia’s entry into the WTO. And when it becomes possible, it should be prepared to negotiate a Free Trade Agreement. In a wider sense, the objective should be to multiply all forms of normal contact and cooperation with the Russian people, especially in areas like education, science and technology which will involve the next generation. These are all practical steps where the Union has much to offer.

Partnership requires trust. Over the past five years, in place of trust between Russia and the West there has been suspicion and recrimination, for a variety of reasons. The task for the period ahead should be to try to rebuild a degree of mutual confidence, step by step. This will be achieved neither by diplomatic bromide which ignores reality nor by histrionic finger-pointing. In place of “strategic partnership”, the EU and Russia need a new paradigm grounded in reality. Instead of a formula which raises unachievable expectations and thereby highlights our differences, we need to focus rigorously on the areas where we genuinely share interests, and build out from there towards a more fruitful and, in time, convergent relationship. We may perhaps achieve partnership in the next generation. For now, we should seek hard-headed, law-based, pragmatic constructive cooperation on specific issues. There will be more than enough of these issues to keep us busy.


Yes, but it’s the energy dialogue that really matters

It is easy enough to agree with Sir Roderic Lyne’s message that EU-Russia relations need to build on common interests. Economic relations and in particular energy trade stand at the very core of those interests and, as Lyne suggests, this also means that the EU needs to develop a single energy policy instead of the current bilateralism where its member states lose collectively vis-à-vis Russia.

But contrary to what Lyne says, this does not pre-suppose developing a “new paradigm” or dusting off the term “strategic partnership”. Our existing institutions (and vocabulary) are enough to engage Dmitry Medvedev’s Russia. By this I do not mean that the term strategic partnership is perfect. For some, like Lyne, it means too ambitious an agenda; for others it means an agenda that is too narrow and that is characterised by the unilateral and strategic visions of both the EU and Russia, and thus accommodates their clashing interests in the traditional mould of great power politics.

Rather than get into this sort of abstract terminological debate, we need to make our point of departure a definition of what the term “strategic partnership” means to both parties. For the EU and Russia, today it represents a mutually acceptable basis for their relations after years of cat and mouse games. It recognises both entities as having something close to a great power status. And it grants Russia the all-important label of recognition and equality that for centuries it has longed for from Europe. This is something that western Europe has finally understood.

The real challenge is therefore to use the existing terminological framework and institutions effectively so as to make the EU-Russia energy dialogue the flagship project. There are already enough regular meetings and working groups for this to succeed.

The first task is to make the energy dialogue the main channel for EU member states’ energy relations with Russia. In that way, the geographical scope of the dialogue would be enlarged into an all-European affair. The EU Commission should be equipped with an adequate policy planning and negotiating mandate. In the medium to long-term, it would also need additional competences regarding energy mix, infrastructure and transport routes issues. To the extent that it is possible, Norway should be involved to avoid a confusing cacophony of different energy dialogues with Russia. Getting the north-eastern and south-eastern EU member states on board will also be pivotal, as energy transit projects are shifting into these areas at the expense of the traditional central European route.

The second task is to enlarge the issues covered by the energy dialogue. The focus should not only be on what hydrocarbons Russia can sell to whom and who can participate in their transit, but on what the EU can offer in return. This includes renewable energy technology, where companies in Germany and Denmark are global leaders. It also includes learning from hydrocarbon reduction programmes like Sweden’s, as well as energy saving and efficiency measures common to many EU area economies. This will help Russia to curb its high domestic use and its waste of hydrocarbons, to realise its own renewable energy potential, and to meet the Kyoto and post-Kyoto CO2 targets, while ensuring that enough oil and gas is left for cash-generating exports in the long-term. The development of EU-Russia electricity networks and trade integration should also be given high priority, as there are decent market opportunities on both sides, with relatively little risk of political controversy. The experience of the Nordic electricity market already points the way.

The overall goal should be that the energy dialogue is presented as a means for Russia to achieve its self-declared aim of modernising both its economy and society. Only by enlarging the energy dialogue’s agenda both geographically and sectorally can the EU maintain its privileged relationship with Russia in the face of rising Asian interest in Russia and its increased courting of Russian energy resources.