EU contemplates ‘common market’ with Russia


French President and EU presidency holder Nicolas Sarkozy yesterday (21 October) unveiled a new cooperation strategy with Russia that would build stronger economic links between Europe and its largest Eastern European neighbour.

Speaking in the European Parliament in Strasbourg, Sarkozy called Russia “our neighbours” and surprised the audience by alluding to “a common economic space between Russia and the EU”. 

The term recalls the early stages of EU history, which saw the development of a ‘common market’ that was subsequently renamed the ‘single market’ in the 1980s. 

Sarkozy’s view of Russia sharing a common economic space marks another step in his attempt to forge a new relationship with Moscow based on trust and tighter integration. 

At a recent meeting in Evian, the French president and his Russian counterpart Dmitry Medvedev voiced similar messages about the need to reconstruct Europe’s security architecture (EURACTIV 09/10/08). 

“I don’t see Russia as a determined rival to the European Union,” Sarkozy told the Parliament. “I think, on the contrary, that it would be necessary, in the future, to lay the basis of a common economic space between Russia and the EU, which will be, by the way, the best way to obtain from them that they get closer to the values of respect for human rights and democracy which we share in Europe.” 

He added that Europe and Russia needed each other, with Russia possessing the energy resources and Europe the technology that Moscow needs. 

Transatlantic tensions 

Without directly naming the United States, Sarkozy revealed that “others” considered military options when the conflict in Georgia erupted on 8 August, a solution which he described as “madness”. 

“Some said, and had [their] reasons to say, that dialogue [with Russia] was pointless and that the response to military aggression could be military [response]. Madness!,” said the French president. 

He also revealed that the US had opposed his visit to Moscow to broker the ceasefire agreement on 12 August. “Despite everything, we played hand in hand with our American friends […] And frankly, looking at the world today, I don’t think it needs a crisis between Europe and Russia. It would have been irresponsible,” Sarkozy said. 

Georgia’s military action ‘completely inappropriate’ 

Contrasting the views of Poland, the Czech Republic, Estonia, Latvia, Lithuania, Sweden and the UK, who tend to see the Georgia crisis primarily as an aggression by Russia, Sarkozy presented a more nuanced view. He recommended that “ideology schemes” be abandoned, calling the Russian reaction [to the attack of South Ossetia capital by Georgian forces] “disproportionate”, but adding that it came as a response to “completely inappropriate action before that”. 

EU-Russia Treaty talks to proceed? 

Answering a question from Annemie Neyts-Uytterbroeck, a Belgian liberal MEP, Sarkozy made no secret of his wish for EU-Russia talks on a wide-ranging cooperation agreement to proceed, despite continuing tensions in Georgia. 

“Russia stopped its tanks 40 km from [Georgian capital] Tbilisi as we asked them. Russia withdrew its troops to positions before the 8 August crisis. Russia allowed observers, including EU observers, to deploy. And Russia, more or less willingly, goes to the Geneva negotiations. If with all this we suspend the EU-Russia summit, who would understand anything of European policy? Nobody,” said Sarkozy. 

EU member states decided at a summit in September to make the start of the talks conditional on Russian troop withdrawing completely from the positions prior to the August invasion. 

Javier Solana, the EU’s foreign policy chief, recently said he hoped a decision to start the talks could be agreed before an EU-Russia summit on 14 November (EURACTIV 16/10/08). 

Britain is said to reserve judgement over progress made in the Georgia post-crisis settlement talks currently taking place in Geneva. 

Lithuania had recently raised objections to starting talks on the new EU-Russia treaty, as the former Soviet Republic wants Russia to pull out more troops from Georgia’s breakaway regions of South Ossetia and Abkhazia. 

Russia kept some 2,500 soldiers in the two regions before the conflict, and has now more than 7,000 in both territories, which it had recognised as independent nations. 

But Sarkozy suggested that the decision to start the talks could be taken without unanimous support from the 27 EU member states. 

“We took the decision not to suspend talks, but to postpone them. Had we decided to suspend them, we would need a European Council decision by unanimity to restart talks. I think this would have been politically embarrassing. The decision to postpone allows us to continue the talks without expressing any assessment,” he explained.  

EU External Relations Commissioner Benita Ferrero-Waldner made a speech in the European Parliament on 21 October on EU-Russia relations, recalling that the Commission was in charge of making an assessment of the EU's self-interest in the relationship ahead of the EU-Russia summit. 

Ferrero-Waldner said economic and trade relations between the EU and Russia were getting stronger, explaining that Russia was the EU's third most important trading partner and growth rates were up to 20% per year. Energy is a major factor, but there is impressive growth in services too, she revealed. 

With its recent high growth rates and emerging middle class, Russia is an important emerging market right on EU’s doorstep that offers opportunities, notwithstanding the effects of the present financial crisis, Ferreo-Waldner said. She added that the EU was a major investor in Russia, accounting for 80% of cumulative foreign investment, while a significant share of Russian foreign reserves are in euro, making Russia one of the largest holders of euro-denominated assets in the world. 

Polish MEP Janusz Onyszkiewicz, who is also rapporteur on EU-Russia agreement, opposed Sarkozy's views on Russia: "We should remember that there was a Russian incursion into Abkhazia at the time of the South Ossetia invasion yet no one could claim that there was any kind of Georgian provocation in Abkhazia to prompt this reaction from the Russians, as some might argue with regards to South Ossetia. This is a clear indication of pre-meditated aggression that the Russians have previously denied […] Medvedev talks of creating a new common security area from Vancouver to Vladivostok. Yet we already have the Charter of Paris. Why else would the Russians push for this other than to hold a veto in this area?" 

Relations with Russia are a divisive issue among the 27 EU members. At the EU Council on 15-16 October, Italian Prime Minister Silvio Berlusconi went as far as to consider Russia as a future member of the bloc, despite Moscow never having expressed interest in joining. Moreover, France and Russia are developing a strong relationship, both economically and politically (EURACTIV 22/09/08EURACTIV 09/10/08). 

But the Georgia crisis set a number of EU countries against Moscow. Poland, Estonia, Latvia, Lithuania, the Czech Republic, Sweden and the UK have been pressing for sanctions against Russia. 

As a compromise, the extraordinary EU Council on the Georgia crisis on 1 September decided to freeze talks on a wide-ranging partnership and cooperation agreement with Moscow in response to Russia's "unacceptable" military incursion in Georgia, delaying possible further steps until a later date (EURACTIV 02/09/08). 

  • 10 Nov.: GAERC (General Affairs and External Relations Council) to discuss relations with Russia. 
  • 14 Nov.: EU-Russia summit in Nice. 
  • 18 Nov.: Geneva talks on post-conflict settlement in Georgia to resume. 

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