Full Interview with Michael Emerson of CEPS on Russia’s relations with the EU 25

Russia knows it will soon have to live with a stronger EU of 25 Member States but the EU needs to be more coherent in its approach to its big neighbour, says Michael Emerson, senior Research Fellow of Centre for European Policy Studies, prior to the Russian elections March 14.

Michael Emerson:

How will the arrival of eight new Members States, formerly living under Soviet domination, affect EU policies towards Russia?

It is an open question. I would not automatically agree with those who think it will lead to a much tougher line. The sense of security and identity of the eight countries is now assured – being full members of the EU and NATO – so their apprehensions in relation to Russia should be more relaxed. On the other hand they have had terrible experiences of occupation and deportation, which they won’t forget. That influences their attitude towards taking a firm stand with Russia if Russia behaves in an implicitly threatening manner.

But in the end I think it is more likely that the 25 won’t have too much difficulty in working out a common position with respect to Russia. It will not be like the Iraq war, where the EU was cut down the middle. If Russia tries to pressurise any EU Member State either for example through ‘Gazprom geopolitics’, or over the place of the Russian minority in the Baltic states, the EU will give quite a sharp reaction. Russia now perceives that the huge EU is becoming an ever more weighty factor in Europe as a whole, so it will have to be realistic and live in a reasonably congenial way with the EU. Overall there could well be a process of convergence, rather than polarization, of attitudes in the EU 25.

What excactly does ‘Gazprom politics’ mean?

‘Gazprom geopolitics’ might be defined as seeking to maximise monopolistic Russian control of gas pipeline supplies to Europe. For example there is the issue whether the EU could deal directly with gas producers in Kazakhstan, whose gas might pass through Russia’s pipeline network. Russia opposes this, saying that it should be the intermediary for such transactions, which would obviously reduce competition. This links to the failure of negotiations under the Energy Charter Treaty to adopt a proposed ‘transit protocol’, which would set the rules of the game for oil and gas pipelines that cross many countries. Russia has withdrawn from these negotiations. Why? Mainly perhaps because Russia has internal problems to reconcile Gazprom’s taste for monopoly with more liberal inclinations of others in the government and oil companies.

But also on the EU side there is the question of whether to entrust this piece of legislation to the Energy Charter as a quasi institution, or to play it through the WTO (World Trade Organisation). It appears that the Commission has tended to favour WTO jurisprudence, rather than the Energy Charter, which has certainly confused the picture, and is the official reason why Russia withdrew. So there is a problem of coherence on both sides. Between the two the situation is a bit of a mess because it means an economically sub-optimal regime for a most important sector.

In the end Russia probably has more to lose, since the lack of legal clarity and multilateral safeguards on the use of strategically important pipelines provides a reason for consumers and EU oil and gas companies to work harder to diversify into other energy sources so as to not depend on these pipelines. In particular the economics of liquefied natural gas technology (LNG) is improving fast, and allows the refrigerated gas to be put on ships and travel to market anywhere. So the trans-European gas pipeline transit business is probably going gradually to lose some of the market share that it might otherwise have kept.

‘Gazprom geopolitics’ has also meant the episodically switching off from time to time of gas supplies for reasons that seem to be a mix of commercial debt collection and political pressurization. Belarus, Moldova, Georgia have all had instances. Recently for the first time there was an unannounced cut of supplies into the EU, which resulted automatically from Russia’s decision to close the tap on supplies to Belarus, which is also the transit route for some supplies to Poland. This immed iately reignited a debate in Poland on a recent decision not to build a new gas pipeline from Norway. Supplies into Germany were also temporarily interrupted, but it seems that Russia informed Germany beforehand. So there was not a big fuss, like there was in Poland.

You predict an EU convergence of positions vis-a-vis Russia. But when you look at Italian Prime Minister Silvio Berlusconi blatantly ignoring the common EU position on Chechnya during the recent Italian presidency, and also observe how chancellor Schröder and Prime Minister Blair do all they can to bilaterally charm President Putin, isn’t it then a bit hard to think the ten new EU countries will go along with that?

I think the recent Foreign Minister’s Council showed a general recognition in the EU of the need to close ranks, and for the leaders to be more disciplined and follow a standard line. The Berlusconi case was an embarrassment for everybody. Otherwise there will always be a legitimate degree of national commercial competition when a president or a prime minister goes and flies the flag in support of an important commercial project. But that is normal business.

In the recent Commission paper on Russia it is said the EU needs to take a “more coherent and consistent approach” in its relations with the Russia. What could that be implicitly referring to?

There is a lack of perfect coordination in the EU in three different dimensions. One is purely internal in the Commission between its different members – Lamy, De Palacio and Patten all have important stakes in relations with Russia. A second is between the Council secretariat (Solana) and the Commission, which is not too bad, but not perfect either. And then the question of coherence between individual Members States and the positions taken by the Council of Ministers. It would not be realistic to expect perfect order, which does not exist in Moscow either, or Washington for that matter. But there is an appreciation that the EU ought to shape up somewhat better.

On the recently disputed CPA (Partnership and Cooperation Agreement). Is Russia just testing the ground to see have much it can extract in terms of concessions from the EU?

It is normal between WTO members that when one member changes its trade policy with respect to a third party, when it amounts to raising the tariffs for example, that the other side has a right to compensation. Even if Russia is not in the WTO, the EU has to be behave responsibly in the multilateral order. Just as was the case with the accession of Finland and Sweden, so now with Poland and a number of new Members States, there are ups and downs for Russia. It appears to be the case that the average tariff applied by Poland and the other new Member States to Russia actually goes down. However depending on the product, some tariffs do go up. So Russia is seeking a transition period for those. But it is quite a small matter. One can discuss it and find reasonable solutions. However it has been worked up into more of a political issue by Russia saying that it would not accept extending the Partnership and Cooperation Agreement to the new Member States. On this the last EU Foreign Ministers Council took a rather hard line, effectively saying “this has to happen unconditionally, and if you insist on disagreeing there will be serious consequences”. Since then, at a press conference the (now former) Foreign Minister Ivanov, said that he sees no reason to dramatise these problems, and he thinks the negotiation will be “crowned with the extension of the EU-Russian partnership agreement”. In other words, this seems to have been a case of Russia rather overbidding in its diplomatic bargaining. Negotiations are ongoing, and I would expect a solution.

Do you think the Russians were surprised by the suddenly much tougher tone from the EU’s Foreign Ministers Council?

Well, I have no idea. It depends which Russian you talk to, and how well-informed that Russian is. There are quite a lot even in the Kremlin, who are not very well informed on EU-Russia affairs, although the promotion of Ambassador Fradkov from Brussels to be Prime Minister should help on this point. It is clear from official Russian speeches that they observe that the EU is getting bigger and stronger. And they know they will have to live with it.

Has the EU done enough in calling out against the drift towards a one party state under Putin in Russia?

Critical language has been used about the elections and the Khodorovsky affair. It also has to be said that, even without these distortions, Putin does enjoy a real legitimacy in the obvious support he is receiving from the Russian population. Even if the mechanism of democracy is imperfect, to say the least, it is not really contested that Putin is supported by his people. The EU can express the hope that Russia will progressively converge on generally accepted international democratic standards. But this is not a matter for negotiation or bargaining, except in a rather indirect way. When the EU declares its fundamental attachment to democratic values it is also putting down markers affecting how far the EU and Russia can deepen their relationship. At their recent summits the EU and Russia have announced their intention to develop four common European policy spaces (for economics, education, justice and home affairs, and external security). Here it is to be noted that they did not include also a common European space for democracy and human rights. And unless that dimension is in there as well, there will be manifest political limits on the extent to which a common European house can be built with Russia.

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