With or Without the EU? Understanding EU Member States’ Motivations for Dealing with Russia at the European or the National Level. Anke Uta Schmidt-Felzmann submitted in fulfilment of the requirements for the Degree of Ph.D 2011 Politics School of Social and Political Sciences College of Social Sciences University of Glasgow ABSTRACT This thesis seeks to explain why European Union (EU) member states choose to pursue their objectives regarding Russia at the EU level or bilaterally. With a systematic analysis of national governments’ choices across different policy issues it helps clarify the motivations underpinning the decision to pursue national objectives at the European or the national level. It thereby contributes to filling a lacuna in the existing literature on EU-Russia relations and the extant research on member states’ foreign policies in the EU context. The contribution to existing scholarship that the thesis makes are: first, it demonstrates that the decision to cooperate, or act at the bilateral level, is not as clear cut as it is often depicted. I show that in most cases it is not a question of either-or. Member states frequently pursue cooperation at the EU level to achieve objectives that they also pursue at the bilateral level. Second, I show that member states’ choices are predominantly influenced by their assessment of the utility of the European and the national route. There is considerably less evidence to suggest that the European level is being privileged as a result of socialisation in the EU, so the length of membership, and thus the duration of their exposure to EU policy-making does not determine a member government’s choice. Third, I show that the size/capacity of the state is but one factor influencing national governments in their choice of foreign policy route. Whether a state is large or small gives indications of its likely choice, but it does not offer definitive insights into which route will be chosen on a particular issue. Fourth, I concur with existing research that argues that a distinction between policy issues in terms of their hierarchy (‘first order’ or ‘second order’) provides insights into member states’ likely choice, but I argue that it is necessary to not just focus on the policy domain, but also to differentiate within a policy domain between the pursuit of broader framework objectives that deliver benefits to all member states and those objectives on which individual states accrue gains in the absence of a common EU agreement with Russia. Fifth, my research highlights the importance of how member states perceive Russia - as a threat or as an opportunity – and the importance they attribute to maintaining ‘friendly’, ‘pragmatic’ relations for whether they cooperate at the EU level or opt for the pursuit of their individual relations with Russia at the bilateral level. Finally, on the basis of the findings from three analytically and empirically significant cases I argue that member states’ choices are highly contingent and can only be explained by considering the interplay between the different factors that enter into national government’ calculus regarding the utility of the EU route versus the bilateral pursuit of their objectives. ii CONTENTS Abstract p. ii Table of Contents p.iii List of Abbreviations p. iv List of Figures and Tables p. v List of Tables p. vi Acknowledgements pp. vii-iix Part I Analytical Framework and Political Context 1. European or national action? Two tracks for member states’ pursuit of relations with Russia . pp. 1-30 2. Influencing EU policy towards Russia. Internal constraints on member states’ choices . pp. 31-55 3. Influencing Russia. The limits to national and European influence over Russia. pp. 56-87 4. The changing context and nature of the EU-Russian relationship. pp. 88-127 Part II Case Studies 5. Energy relations with Russia. Contingent choices in a sector of vital importance . pp. 129-175 6. The normative agenda. Contrasting motivations for making the same choice. pp. 176-221 7. Individual bilateral disputes. Contrasting choices to resolve difficulties with Russia. pp. 222-250 8. Conclusions. What motivates European Union member states’ choices? pp. 251-265 Confidential list of interviewees (REMOVED) pp. 266-269 References pp. 270-335 Annex pp. 336-345 iii LIST OF ABBREVIATIONS CCP Common Commercial Policy of the EU CEE Central and East European; Central and Eastern Europe CEECs Central and East European countries of the EU CIS Commonwealth of Independent States CMEA Council for Mutual Economic Assistance (otherwise known as Comecon) CoE Council of Europe COEST Council Working Group on Eastern Europe and Central Asia (of the EU) COREPER Committee of the Permanent Representatives (of the EU) CSR Common Strategy on Russia (of the EU) DAC Development Assistance Committee (of the OECD) EC European Community ECT Energy Charter Treaty EIDHR European Initiative for Democracy and Human Rights (of the EU) ENP European Neighbourhood Policy (of the EU) ENPI European Neighbourhood Policy Instrument (of the EU) EP European Parliament EU European Union G8 Group of Eight GATT General Agreement on Tariffs and Trade GSP General System of Preferences IEM Internal Energy Market (of the EU) JLS Justice, Liberté et Securité – the area of Freedom, Security and Justice (formerly known as Justice and Home Affairs, JHA) MFN Most-Favoured-Nation NIS Newly Independent States ND Northern Dimension (policy of the EU) ODIHR Office for Democratic Institutions and Human Rights (of the OSCE) OECD Organization for Economic Cooperation and Development OSCE Organization for Security and Co-operation in Europe PCA Partnership and Cooperation Agreement (between the EU and Russia) PSC Political and Security Committee (of the EU) TACIS Technical Aid to the Commonwealth of Independent States TEC Treaty establishing the European Community TEU Treaty on European Union ( Maastricht Treaty ) TFEU Treaty on the Functioning of European Union ( Lisbon Treaty ) UN United Nations UNSC United Nations Security Council WTO World Trade Organization iv LIST OF FIGURES Figure 1.1 A Logic of expected consequences perspective on member states’ choices 20 Figure 3.1 Total Russian military spending after the Cold War 73 Figure 3.2 Imports of goods from Russia, 1999-2008 (in million Euro) 80 Figure 3.3 Exports of goods from EU member states to Russia, 1999-2008 81 Figure 3.4 EU-Russian net foreign direct investment in 2006 and 2007 83 Figure 4.1 The development of Russian Gross Domestic Product volumes 89 Figure 4.2 The growth of Russian GDP in the post-Cold War period 89 Figure 4.3 Military expenditure as a share of Russia’s GDP 91 Figure 4.4 EU and national aid to Russia (1990-2004) in the DAC framework 93 Figure 4.5 The development of the EU’s trade in goods with Russia 114 Figure 5.1 Imported Russian energy in member states’ consumption 139 Figure 5.2 Gas imports from Russia and the effects of the January 2009 crisis 143 Figure 5.3 Russian natural gas supplies to EU member states 144 Figure 5.4 Russian oil supplies to EU member states 145 Figure 6.1 EU and national aid to Russia as share of total DAC aid 196 Figure 6.2 EU aid and member states’ aid with non-EU DAC aid 196 Figure 8.1 Capacity and EU effectiveness in the choice of policy route 252 v LIST OF TABLES Table 1.1 Member states’ choices explained by the two logics of action 21 Table 2.1 Classifications of member states’ bilateral relations with Russia 51 Table 3.1 The EU-27’s share in Russian trade (1994-2008) 63 Table 3.2 Russia’s Trade with the EU (2005-2009) 64 Table 3.3 Key goods that the EU imports from Russia 64 Table 3.4 Key goods that the EU exports to Russia 65 Table 4.1 Key agreements and key EU policies towards Russia 96 Table 4.2 EU-Russia Summit Meetings 101 Table 5.1 Russian gas importing member states’ bargaining position 146 Table 5.2 Overview of states ‘gaining’ or ‘losing’ from the pipeline projects 173 Table 7.1 Member states’ bilateral conflicts with Russia 221 vi ACKNOWLEDGEMENTS During the intellectual journey that the composition of this thesis took me on, a great many people helped along my progress. I owe a huge debt of gratitude to all of them and wish to underline the contribution of a number of individuals and organisations in particular. First of all, I thank my former supervisor Professor John C. Peterson for taking me on at Glasgow as a doctoral student and getting me involved in EU funded project work which taught me a lot about how to set up my own fieldwork. I am also very grateful to Professor Stephen L. White who oversaw my progress from the very beginning up to the finishing line and who provided encouragement and valuable guidance on what it takes to build my first ‘table’, supplying me regularly with material for its construction and sharing his experiences and insights into his own academic work. I owe a huge debt of gratitude to Professor Alasdair R. Young who took over my supervision from Professor Peterson. His dedication to the tricky task of helping me see the wood for the trees in the vast research field of EU-Russian relations and his careful guidance particularly in the latter stages made the completion of the thesis possible. My ‘apprenticeship’ would certainly have been much less rewarding without my two supervisors’ contribution to my academic development. I am grateful for their invaluable advice and support over the course of my doctoral studies. I also wish to thank both the University Association for Contemporary European Studies (UACES) and the European Commission for the jointly funded UACES Scholarship 2007 and also the Department of Politics at Glasgow for the research funding that enabled me to conduct interviews in Berlin and in Brussels in 2007.