The EU, Russia and a Less Common Neighbourhood. Lessons

Introduction

Stiftung Wissenschaft und Politik German Institute for International and Security Affairs Co m ments

The EU, Russia and a Less Common Neighbourhood WP S Lessons Reinforced by the Vilnius Summit Susan Stewart

The run-up to and outcomes of the Vilnius summit in November 2013 indicate that the Eastern Partnership is undergoing a period of crisis. This is primarily because the EU and its Eastern partners have not been successful at communicating their respective goals to each other and agreeing on viable methods for reaching them. The same applies to the EU-Russia relationship, which is becoming increasingly dysfunctional, especially with regard to the so-called common neighbourhood. Although the two policy areas interact, a clearer separation between them is currently more justified than a gradual conflation of the two approaches. The summit has highlighted a series of problems that, so far, have been addressed only sporadically or at the rhetorical level. The silver lining of Vilnius can be found in seeing it as an opportunity to analyze these problems systematically in order to modify existing policy to take better account of current realities.

The events of the past months have called sian factor can have on the EaP states as aspects of both the EU-Russia relationship well as on their rapprochement with the and the Eastern Partnership (EaP) into ques- EU. tion. It has become clear that Russia and A review and ensuing revision of the the EU do not share the same goals con- EU’s approach to Russia is in order, as is cerning the development of the EU’s East- a substantial modification of the Eastern ern partners. This fact has implications for Partnership. EU-Russia relations were last other aspects of the EU-Russia relationship reviewed (in a relatively minimal fashion) as well. At the same time, the focus on Rus- in 2008, and the European Neighbour- sia’s actions has deflected attention from hood Policy review in 2010–2011 ended up internal developments in the EaP countries, being dominated by the impact of the Arab which should be central to the evolution of Spring on the policy and thus did not focus their relationship with the EU. It is time to sufficiently on the EaP. It is time to remedy intensify the focus on these developments, this situation by taking a critical look at without losing sight of the impact the Rus- both policies, in order to ensure their com-

Dr. Susan Stewart is Deputy Head of SWP’s Eastern Europe and Eurasia Division SWP Comments 3 January 2014

patibility while clarifying important dis- Rogozin, Russian Deputy Prime Minister tinctions between them. and Special Representative of the Russian President on Transnistria, mentioned both issues and further implied that Russia Russia’s approach to its neighbours might limit gas exports to Moldova if it con- In the run-up to the Vilnius summit, Russia tinued to pursue an Association Agreement. began to exercise massive pressure on sev- However, earlier Russian pressure in the eral countries involved in the Eastern Part- form of a ban on Moldovan wines led to nership. Russian President Vladimir Putin increased Moldovan independence from managed – through a partially non-trans- Russia in the trade area due to greater parent combination of threats and prom- diversification of the wine trade following ises – to convince the Armenian President, the adoption of EU standards. In the case Serzh Sarkisian, to declare Armenia’s inten- of Moldova, the Russian pressure failed to tion to join the Customs Union, which prevent the initialling of the Association currently consists of Russia, Belarus and Agreement, which took place in Vilnius as Kazakhstan. This decision generated annoy- planned. Further actions by Russia can be ance and perplexity not only in Armenia, expected, however, should Moldova con- but also in the other Customs Union mem- tinue its process of rapprochement with bers. Their initially critical reaction dem- the EU. As the Ukrainian case (see below) onstrates that Russia is prepared to take demonstrates, a package of simultaneous- unilateral decisions in the framework of ly applied measures can have a negative the Customs Union and to impose them on impact on the willingness of the elite to the other members. The Russian treatment deepen the country’s relationship with the of Armenia further indicates that accession Union. to the Customs Union is not based solely on Finally, in summer 2013 Russia para- the voluntary, sovereign decision of a can- lyzed most of the Russian-Ukrainian border didate country, but can be induced by mak- trade by imposing additional checks and ing an offer the country’s leadership cannot controls. This action was accompanied by afford to refuse. Both these conclusions fly clear statements by Russian officials that in the face of previous statements by the the point of the measures was to make the Russian leadership regarding the character consequences of entering into a Deep and of the Customs Union and the planned Comprehensive Free Trade Agreement Eurasian Economic Union, which allegedly (DCFTA) with the EU clear to Ukraine. Short- take decisions based on the deliberations ly before the Vilnius summit, there were of a supranational organ consisting of rep- repeated meetings between the President of resentatives of sovereign states that have Ukraine, Viktor Yanukovych, and Putin. The voluntarily joined the organization. The exact content of their conversations is un- developments further indicate that Russia known, but it is evident that the Russian is becoming nervous about the viability of side combined threats and promises with the formats and believes it is necessary to the aim of preventing an intensification of introduce coercive methods, as well as to EU-Ukraine relations. Putin was successful emphasize enlarging the Customs Union to the extent that Yanukovych refused to rather than focusing on the problematic sign the Agreement at the summit, despite issues involved with its deepening. attempts at a last-minute compromise by Russia threatened Moldova as well, this the EU. time with difficulties for its citizens work- The developments sketched above indi- ing in Russia and instability in Transnistria, cate that Russia is systematically attempt- should the Moldovan government further ing to undermine the Eastern Partnership intensify its relations with the EU. In a and perceives it as an initiative that runs visit to Moldova in September 2013, Dmitri counter to key Russian interests. This per-

SWP Comments 3 January 2014

ception has to do with Russia’s vision of with regard to the Transnistria conflict). itself as a great power, which, from the However, Russia’s actions of the past Russian perspective, goes hand in hand months make a critical evaluation of these with a hegemonic approach to its immedi- efforts necessary. With its approach to the ate neighbourhood. Furthermore, the rap- countries of the Eastern Partnership, Russia prochement of the EaP countries with the has provided proof that the potential for EU is viewed by some in Russia not only as constructive, results-oriented cooperation preparation for an eventual accession, but with regard to the EaP countries cannot be also as the possible harbinger of NATO seen as a given. At the level of both docu- membership for these countries, which ments and practice, a revision should occur Russia desires to prevent at all costs. to remove this and other faulty assumptions (e.g. regarding official Russian support for democratization and moderniza- EU-Russia relations: Towards a more tion processes). One goal of the revision realistic approach could be a public written assessment explic- This situation has several implications for itly rejecting previous assumptions and the EU-Russia relationship. For one thing, streamlining policy to focus on areas where it indicates that the idea of an agenda cooperation remains essential and progress shared by the EU and Russia in the post- can realistically be achieved. This would Soviet space is misleading. Russia perceives serve both as a signal to Russia regarding the developments in this area as a zero-sum EU intentions and a basis for designing game and does not believe in the supposed further initiatives as the relationship devel- win-win opportunities often advocated by ops. The assessment could be conceived as a the EU. In addition, Russia is more than “living document”, to be modified as con- willing to tolerate instability and economic ditions in both the EU and Russia change. weakness in the neighbouring countries, Second, the recent developments raise assuming they are accompanied by an in- the question of whether the EU is willing to crease in Russian influence. In fact, Russia enter into a geopolitical game with Russia, consciously contributes to rising instability or in fact has already done so. The rhetoric and a deterioration of the economic situa- coming from some Member States in the tion in some, if not all, of these countries. run-up to Vilnius, particularly with respect Thus, Russia does not subscribe to the to signing an Association Agreement with declared aims of the European Neighbour- Ukraine, points to pronounced geopolitical hood Policy, which attempts to achieve sta- thinking by a growing number of actors. bility, security and prosperity in the sur- For instance, the opinion was frequently rounding states. expressed that it was necessary to “rescue” Which consequences does this have for Ukraine before it could drift further in EU-Russia relations? Even if a heightened Russia’s direction. This echoes the zero-sum awareness of the existing “integration com- approach prevalent in Moscow. Such geo- petition” has developed in Brussels over the political arguments largely overshadowed past years, the premises on which the EU- an evaluation of the domestic steps (not) Russia relationship is based, along with its undertaken by the Ukrainian government, key documents, assume the presence of except with regard to the case of Yulia significant potential for joint efforts in the Tymoshenko, which remained (too) high post-Soviet space. In particular the “Com- on the EU’s priority list. mon Space” on external security was in- If one understands geopolitics as a strug- tended to involve such cooperation as a gle for mutually exclusive influence in a major component. Specific projects such particular area, then this game could be as the “Meseberg initiative” also assume dangerous for the EU in two senses. First, that such collaboration is possible (e.g. an attempt to achieve EU goals in the

SWP Comments 3 January 2014

neighbourhood by means of geopolitical relationship with Russia, but rather pursue instruments is at odds with the essence of its own goals in the neighbourhood proac- EU foreign policy as it has developed so far. tively. While remaining open to a dialogue Nor is such an approach capable of creating with Russia to explain these goals, the EU the foundation for a constructive future should take into account likely Russian policy towards Russia. Rather, it would lead responses when planning its own actions – to an escalation within the EU-Russia rela- not in order to avoid antagonizing Russia tionship, which would be based on zero- at all costs, but rather to be prepared for sum thinking and would thereby promote potential consequences. an attitude that the EU has spent the previous years rejecting (or denying). Second, such a development would focus attention The Eastern Partnership: Greater too strongly on Russia’s actions. These are differentiation, more resources certainly important when it comes to in- The above analysis shows that the EU’s fluencing the possibilities for development approach to Russia on the one hand and of the EaP. However, when modifying and the Eastern partner countries on the other implementing the Eastern Partnership, the are interrelated. It is nonetheless essential political, economic and societal develop- to keep the two approaches both analyti- ments in the partner countries should be cally and practically separate from one an- the primary focus, not the role of Russia other and to enquire into the consequences (more on this below). of developments to date (including Russia’s The dysfunctional nature of EU-Russia actions) for the future of the EaP. The em- relations with regard to the post-Soviet phasis should be placed on what has oc- space corresponds to the general tendency curred in the countries themselves, rather of developments in the relationship. In the than on Russia’s approach. past year and a half, it has deteriorated in There are limited elements of condition- virtually every sphere. In the energy sector, ality built into the EaP. For example, begin- the EU has accused Gazprom of distorting ning negotiations on an Association Agree- competition on the energy markets in ment is predicated on the demonstration of various EU Member States. In the trade democratic values. The case of Ukraine has area, the EU has launched the first com- shown that the political environment in plaint against Russia in the WTO frame- the partner country can change and that work, pointing to a larger set of problems the question of adhering to certain values that have ensued due to Russia’s inade- remains an open one. What is more, the quate approach to its WTO commitments. fundamental direction of foreign policy Work on a new basic agreement has stalled. in the Ukrainian case is – despite official On the question of visa facilitation, the two rhetoric and legislation supporting the parties have reached an impasse, due in EU option – still undecided. Although the part to new issues introduced by the Rus- Ukrainian case is unique for a number of sian side. All of this emphasizes the neces- reasons, there are numerous similarities sity of reviewing the fundamental assump- between its development and that of other tions of the relationship and working EaP countries. Like Ukraine, Moldova also towards a more realistic approach. Such a possesses an elite as well as a society that is review should go substantially beyond the divided in terms of foreign policy orienta- process that occurred in 2008 following the tion. Events in Georgia since the parliamen- Russia–Georgia war, which had little tan- tary elections in October 2012 have demon- gible practical impact on the EU approach strated problems in the rule of law sphere to the Russia dossier. With regard to the in general, and with selective justice in par- geopolitical game, the EU should not allow ticular, although not to the same degree as itself to become involved in a “tit for tat” in Ukraine.

SWP Comments 3 January 2014

The EU has insisted on the validity of ex- because of its inadequacies in the areas of isting instruments. In the cases of Georgia democracy and the rule of law. Differences and Moldova, this approach has functioned with regard to levels of interest in the EU so far, although the parties are currently also quickly became obvious. Azerbaijan, in only at the stage of initialling the agree- particular, has demonstrated little interest ments. Armenia has left the process, which in the EaP offers. points to the need for more instruments There are, however, other equally rele- below the threshold of an Association vant parameters for assessing the probable Agreement and accompanying DCFTA. The level of involvement of the partner states in Ukrainian case has highlighted the weak- the EaP. These include the form of govern- nesses of the EaP approach, even prior to ance practiced, the economic situation in Yanukovych’s decision not to sign the the country, and the relations among poli- agreement. First, Ukraine, under its current tics, the economic sphere and society. The leadership, is only interested in the agree- type and degree of dependence on Russia ment for financial and geopolitical reasons, should be taken into account when analyz- as a means of continuing its balancing act ing these parameters. The above factors are between the EU and Russia. Second, the decisive for the respective country’s elite Ukrainian bureaucracy is not in sufficiently when it comes to evaluating the EU offers. good shape to implement much of the Since the rhetoric of these elites can be agreement effectively. Third, the process misleading – as the situation both before surrounding the signing has not contrib- and after Vilnius has shown – it would uted to bringing the Ukrainian leadership make sense for the EU to conduct its own closer to the EU. Instead, the Ukrainian assessment of the parameters mentioned, ruling elite has attempted to incorporate in order to be able to gauge the probable the document (and the process) into its attractiveness of its offers from the point of corrupt and personalized style of govern- view of the respective partner country. This ing, and thereby to profit from it both is all the more necessary because objective politically and monetarily. These three analyses of this sort are rarely undertaken aspects make clear both the ambitious in the partner countries themselves. Their nature of the Association Agreement in absence is an indication of the primarily post-Soviet contexts and the need to better political – and often instrumental – char- understand how such instruments will be acter of the relationship for the partner perceived and utilized within these con- countries, as well as of the inadequate in- texts. volvement of economic and social actors One key result of the Vilnius summit in the decision-making process. Opinions should thus be a determination to more present in the broader society should also strongly differentiate the Eastern Partner- be examined by EU analysts, in order to ship approach. The European Neighbour- pinpoint potential supporters and oppo- hood Policy has de facto already divided nents of the EU’s proposals. An exploration into two parts, concerned with the East and of the factors mentioned above will also the South, respectively. This division makes allow EU institutions to better assess the sense and has – at least in the case of the challenges likely to arise when agreements East – already borne fruit. However, it has with Eastern partners are being imple- become increasingly clear that the Eastern mented. An organized network of special- neighbours also differ among themselves ists on the EaP states, including researchers across important parameters. This was to and activists in the partner countries, could some extent evident even at the beginning help to achieve a more systematic treat- of the EaP. For example, Belarus was only ment of pertinent issues. It could make invited to participate in the multilateral – sense for the European Union Institute for not the bilateral – dimension of the EaP Security Studies to take the lead in creating

SWP Comments 3 January 2014

such a network, drawing on existing con- The immediate focus should involve tacts and expertise present in the EU coun- establishing a dialogue between the country delegations, the EaP Civil Society Forum try’s political leadership, on the one hand, and relevant EU institutions. and the opposition and pro-European seg- In addition, a process of differentiation ments of society on the other. Although should occur at the level of instruments. Yanukovych has temporarily regained the Starting from the situation in each country, upper hand due to his successful negotia- offers should be made that correspond both tion of short-term Russian support, the to the agenda of the country and that of the tension in Ukrainian politics and society is EU. These offers should be relatively small not going to disappear. Since a tradition of in scope and be easy to absorb, that is, they political compromise is absent in Ukraine, should ideally involve only one area of such a dialogue would ideally involve exter- reform and promise fairly quick – if limited nal mediation. As the EU is not likely to – advantages, focusing especially on im- be seen as impartial by the Yanukovych provements in socioeconomic development regime, options for external mediators and living standards. The art of designing will need to be sought elsewhere, such as such “building blocks” lies in sequencing in the OSCE, under the current Swiss Chair- them so that they enhance each other and manship, or the United Nations. The most fit into a sensible overall strategy for the promising path for Ukraine’s relationship country’s development. with the EU – at least under the current All of this will require an expansion of Ukrainian regime – would seem to be a new the resources devoted to the Eastern Part- start, divorced from both the Association nership. This refers less to large amounts Agreement and the fate of Yulia Tymo- of supplementary financial assistance and shenko. more to targeted project funding to foster, The past weeks have clearly shown that for example, effective communication with statements made by the Ukrainian leader- the societies in the partner countries. Where ship cannot be taken at face value. It is also necessary, additional human resources – evident that Yanukovych’s primary concern both on the ground in the EU delegations is staying in power. If there is to be any and in Brussels – should be employed to chance of a transition away from the Yanu- facilitate the analysis described above as kovych regime, he will need to be con- well as the development of appropriate vinced that there is no alternative to leav- “building blocks”. Monitoring mechanisms ing and be offered watertight guarantees should also be expanded and fine-tuned to for his future that include both his own ensure that the support provided actually personal safety and the security of his flows into the intended channels and is family’s accumulated wealth. However, the utilized for the agreed-upon purposes. December 2013 agreements with Russia on a lower gas price and multibillion-dollar loans have decreased Yanukovych’s sense Ukraine: Forward-looking of vulnerability and make it less likely crisis management that he will be willing to compromise both Ukraine demands particular attention due internally (with the opposition and broader to the protests that have emerged in the society) and externally (with the EU and context of the Vilnius summit. Some of the the IMF). The opposition, meanwhile, is not suggestions formulated above can be rele- prepared to assume power, having no co- vant to the Ukrainian case. First, however, herent programme, no clear leader and the situation in the country needs to sta- no concrete plan for transforming the dys- bilize. This will require steps that only functional governance structures of the actors within Ukraine can take. The EU can previous two decades into effective insti- play a positive role, albeit a limited one. tutions. Not to mention that any new lead-

SWP Comments 3 January 2014

er would immediately come under pressure The question of financial support for from Moscow, which can consist of threats Ukraine will inevitably continue to be but also of temptations, such as those to raised, whether or not Yanukovych remains which Yanukovych has recently succumbed. in power. If he does, it will be crucial not In this situation, a modified EaP, which to disburse any funds to his regime without could offer small “building blocks” that imposing clear and strict conditions that deliver positive results quickly, may prove can be closely monitored. Any other ap- to be a palatable proposal, both for Yanu- proach will simply bolster the regime and kovych and for his eventual successor. its deeply flawed approach to governance. These smaller measures would, however, Uncontrolled funds will be used to reward probably need to be accompanied by a Yanukovych’s supporters and to increase significant IMF package in the medium his chances in the presidential elections. term, since limited projects can only bear Serious reforms will not be pursued, as they fruit in a country with a functioning econ- are not in the interest of key players and omy, and the agreements with the Russian could jeopardize Yanukovych’s already Federation will bring only short-term bene- meagre backing among the population. EU fits, combined with increasing Ukrainian willingness to allocate funds without the dependence on Russia. A window of oppor- proper monitoring mechanisms would also tunity for cooperation with the IMF may confirm Yanukovych’s view that the EU is open after the presidential elections sched- ready to bargain and may be willing to out- uled for March 2015. However, it is equally bid the Russians. His tactic of playing the possible that Russia will establish a tighter two sides off one another without address- economic hold on Ukraine in the coming ing substantive domestic issues would months, reducing the chances for the therefore be reinforced. reforms demanded by the IMF. The EU should attempt to increase the One option for a “building block” in the probability of a stable and peaceful period EU-Ukraine relationship would be the rapid of transition – to what is currently unclear introduction of visa freedom for short-term – by abandoning the question of the Asso- travel in the EU, which would serve both to ciation Agreement for now and focusing on support a potential new leadership and to smaller offers, as well as facilitating domes- send a positive signal to Ukrainian citizens. tic compromise to the extent possible. If If an exception is to be made for Ukraine, and when a different set of actors should however, in terms of exempting it (at least gain power, it will be essential to follow temporarily) from certain obligations listed developments closely, build up reliable in the Visa Liberalization Action Plan channels of communication and clearly (VLAP), this should be discussed with the articulate the EU’s priorities with regard Moldovan elite. Moldova has fulfilled all to Ukraine. Any support given should be benchmarks of its own VLAP and would be targeted to correspond to these priorities. It likely to perceive exceptions for Ukraine will be essential to observe whether flawed as unjust. On the other hand, the current governance patterns are reproduced or Moldovan elite has an interest in seeing rejected, and to offer support in establish- Ukraine follow a pro-EU path, and thus ing new, more transparent and efficient might be willing to support making an methods. Even under a different leadership, exception for its neighbour. At the very financial support should be coupled with least, however, Moldova should receive visa clear conditions, which can be negotiated exemptions before they are introduced for with the new power holders. If, however, Ukraine, along the lines of those recom- Yanukovych should remain in power for mended by the European Commission in the foreseeable future, bolstered by Russian November 2013. assistance, the EU will need to brace for continued frustration in its relationship

SWP Comments 3 January 2014

with the Ukrainian elite and search all the theless, the EU should attempt to address harder for opportunities to strengthen its the crisis with the larger goals of the EaP interactions with Ukrainian society. in mind, while simultaneously pursuing a “new realism” in the EU-Russia relationship. Not only in the Ukrainian case can Russia policy and the EaP: new, more focused instruments prove to Linkage without conflation be more manageable and attractive than The Eastern Partnership and the EU’s policy the extremely ambitious Association Agree- towards Russia interact in multiple ways. ments with their accompanying DCFTAs. One significant connection has been based Since these instruments will need to be on the assumption that cooperation be- tailored to the relevant country contexts, tween the EU and Russia to achieve shared improved mechanisms for drawing on in- goals in the neighbourhood is currently depth knowledge of developments in the possible. The developments surrounding region will be essential for a successful re-

© Stiftung Wissenschaft und the Vilnius summit have revealed this vamping of the EaP. Politik, 2014 assumption to be false. This means that a To sum up, it is necessary to combine All rights reserved clearer separation of the two policies along crisis management tools in the Ukrainian These Comments reflect this dimension is appropriate. On the other case with a modified EaP approach that solely the author’s views. hand, the approaches remain interrelated. offers a wider spectrum of instruments, SWP The pursuit of EU goals in the EaP countries including more limited proposals that Stiftung Wissenschaft und will inevitably have a negative impact on yield tangible advantages in the short term. Politik German Institute for certain aspects of the EU-Russia relation- This approach should be linked to a revised International and ship. A higher priority for the EaP than it Russia policy based on current realities, but Security Affairs has previously enjoyed seems appropriate, a conflation of the two should be avoided. Ludwigkirchplatz 34 but that will create difficulties for the EU in Rather, Russia should be seen as a factor to 10719 Berlin its relations with Russia unless, and until, be taken into account in the implementa- Telephone +49 30 880 07-0 Fax +49 30 880 07-100 the zero-sum mentality can be overcome. tion of the Eastern Partnership, while devel- www.swp-berlin.org Since the EU can do little to alter this men- opments in the partner countries should [email protected] tality in the short term, it must prepare remain at its centre. ISSN 1861-1761 for difficult situations, for example con- cerning the protracted conflicts, while making an effort to be as transparent as possible regarding its intentions towards the neighbourhood. Russia will probably become weaker internally, since it has not yet begun to pursue a serious course of modernization, so compensatory measures in the neighbourhood are likely, making the relationship in the economic and security spheres more problematic. There will thus be a certain amount of spillover of the disagreements regarding the common neighbourhood into other aspects of the EU-Russia relationship. It may become increasingly difficult to separate the various areas from one another and to cooperate in one while “agreeing to disagree” in others. The current situation in Ukraine re- quires some form of crisis management rather than the usual EaP approach. None-

SWP Comments 3 January 2014