New Agenda for Russia-EU Relations

POLICY BRIEF New agenda for Russia-EU relations

M. ENTIN professor, MGIMO-University, RIAC expert

E. ENTINA associate professor, NRU Higher School of Economics, RIAC expert

No.4, May 2016

1 BOARD OF TRUSTEES PRESIDIUM

Sergey Lavrov – Chairman Mikhail Margelov Petr Aven of the Board of Trustees Yury Osipov Igor Ivanov – RIAC President Sergey Prikhodko Andrey Kortunov – RIAC Director General Herman Gref Anatoly Torkunov Fyodor Lukyanov Aleksandr Dzasokhov Andrey Fursenko Aleksey Meshkov Leonid Drachevsky Aleksandr Shokhin Dmitry Peskov Aleksandr Dynkin Igor Yurgens Mikhail Komissar Konstantin Kosachev

Editors-in-Chief:

Natalia Evtikhevich, PhD, political science Alisa Ponomareva

The Russian International Aff airs Council (RIAC) is a membership-based non-profi t Russian organiza- tion. RIAC’s activities are aimed at strengthening peace, friendship and solidarity between peoples, preventing international confl icts and promoting crisis resolution. The Council was founded in accordance with Russian Presidential Order No. 59-rp “On the Creation of the Russian International Aff airs Council non-profi t partnership”, dated February 2, 2010.

Founders:

Ministry of Foreign Aff airs of the Russian Federation

Ministry of Education and Science of the Russian Federation

Russian Academy of Sciences

Russian Union of Industrialists and Entrepreneurs

Interfax news agency

RIAC Mission: The RIAC mission is to promote Russia’s prosperity by integrating it into the global world. RIAC oper- ates as a link between the state, the scholarly community, business and civil society in an eff ort to fi nd solutions to foreign policy issues.

The views expressed herein do not necessarily refl ect those of RIAC.

2 Russian International Aﬀ airs Council

New agenda for Russia-EU relations

Russia and the European Union are neighbours. Located on the same continent side by side, we share a common history and culture, and the same religious, philosophical and civilizational roots. We are building predominantly the same type of secular society based on a socially oriented economy and public representation. Russians have decisively broken with the past division of the world into two opposing camps. We are no longer separated by the deepest insurmountable gap of antagonistically incompatible ideologies. The threat of nuclear war, on the brink of which we were balancing for some time, has been eliminated. Russia and the EU follow similar strategic goals. Both sides strive for peace, stability, security, prosperity, sustainable development, high standards of living and happiness for their citizens.

This is an objective reality which is not depen- – The current situation does not suit us and we dent on wishes, claims, judgments or actual do not want the continuation of the policies policies. Therefore, there are prerequisites to that led to it; fi nding a positive solution to the disagreements between us, no matter how complex they may – Our aim is to improve the relationship, to make it viable and to rely on cooperation, not be. The disagreements do not belong to the competition. higher order but relate to the methodology and tools of achieving strategic goals. The interests of Russia and the EU: Nevertheless, bilateral relations are experienc- diff erences and similarities ing an unprecedented crisis. Attempts to resolve it are deadlocked and the way out is not visible, Russia and the EU are fundamentally diff erent with signifi cant time required to achieve it. actors on the international scene; because of this they are likely to have diverse interests and build The crisis has a completely conscious, purely their hierarchy in diff erent ways. man-made character. It is caused by an unwilling- ness to seek mutually acceptable compromises The EU is apparently in transition, transforming that would suit both sides. Each decided that from an interstate association to something akin they had been too lenient, sacrifi ced too much to a supranational federal entity. Consequently, EU internal policy, despite a high level of inte- to their own detriment and therefore, will not gration, still remains a dominant element of the accept any more concessions. foreign policy of each Member State as well as of Russia and the EU are still «playing a zero sum the EU as a whole. game». In a number of vital areas, they have con- For the EU, the Union itself and its constituent frontational positions. If they are going to hold parts, including economic, monetary, fi nancial, to these,examining and learning from past expe- banking, agricultural, social, digital, political and riences and establishing what brings us together other unions, are an absolute priority. External and divides us are futile. This work makes sense only if we recognize the Russia and the EU are fundamentally dif- following: ferent actors on the international scene; – Historically during the formation and imple- because of this they are likely to have diverse mentation of policies relative to each other, interests and build their hierarchy in diff erent both sides committed gross assessment and ways. strategic errors;

AUTHORS: Mark Entin, professor, MGIMO-University, RIAC expert Ekaterina Entina, associate professor, NRU Higher School of Economics, RIAC expert

3 Mark Entin, Ekaterina Entina · New agenda for Russia-EU relations

factors are considered to be of secondary impor- partner, especially since no other global players tance. for various reasons were able to replace the EU in this sense. In its foreign policy, the EU is primarily interested in other countries sharing, supporting and imple- For the EU, relations with Russia are less impor- menting its internal approaches and solutions. It tant. Brussels did not have any coherent policy does not recognize that these may be region- towards Russia until the establishment of the specifi c and as such benefi cial only to itself. The Eastern Partnership, formed as a counterweight EU seeks nevertheless to transform it into auni- to Russian infl uence, and then the imposition versal approach,with the outside world seen as of sanctions. Mantras about creating common a peripheral addition, and not as an important spaces and the “Partnership for Modernization”, base of support to its largely self-suffi cient inter- years of negotiations on Russia’s accession to the nal eff orts. WTO and the new EU-Russia Basic Agreement have not evolved into a proper policy. For years, Russia has more or less successfully or without prominent results supported the Generally, the EU has been prepared to sacrifi ce its modernization agenda, which has largely been relations with Moscow, as demonstrated several dependent upon external factors. Russia’s depen- times between 1990 and 2010, with the cool- dence on these has been much greater and more ing down of interactions. Facing a choice after critical than the EU’s, although recently this has the Eastern Partnership summit in Vilnius when become less so. the legitimate government of Ukraine refused to sign an Agreement on the “comprehensive deep” Russia, Russian consumers and the Russian capi- Association, and then the escalating confl ict in tal aspire to such things that complement the Ukraine, the EU gradually halted its relations with national economy and society. These include: Russia. The start of deterioration in their relations – foreign investments as a catalyst for the never originated from Moscow. development and establishment of a modern business culture; The EU sacrifi ced these relations for its own self-interests – asserting such a world order in – technology and know-how to increase the Europe when everything depends on Brussels. It national economy’s level of competitiveness; makes decisions not only of the most important – goods and services, including tourism and strategic nature, but also on day-to-day issues – fi nance, to satisfy the unfulfi lled domestic political and regulatory. The role of the other market; players in Europe comes down to accepting, sup- – external markets for a range of competitive porting and following the decisions made. exports and capital investment. Russia has never accepted the legitimacy of such Therefore, the Russian political elite focuses claims and insisted on equality and joint deci- the country’s foreign policy initially on creating sion-making, so the EU has led to the ousting of favorable conditions for internal development, Russia from the European space. However, Russia and then on building relations with other states will never give up its active presence in Europe or and unions which would contribute to this. In agree with the EU-centric order in Europe. recent years it has been increasingly gravitating This is a major divergence of interests from towards the implementation of its own geopo- which all others, fi ctional and real, are derived. litical project, initially with the formation of the They can be easily resolved either through diplo- Eurasian Economic Union (EAEU), which has now matic channels or as a result of joint eff orts, once developed into a much more ambitious project. an approach is found to overcome the basic con- It is largely discussed now by the Russian expert tradiction. community. The fi rst concrete step leading to the Greater Eurasia was an international agreement to converge EAEU activities with the Economic The EU has led to the ousting of Russia Belt of Silk Road. from the European space. However, Rus- Russia could satisfy a signifi cant proportion of its sia will never give up its active presence interests by developing relations with the EU. It in Europe or agree with the EU-centric order is therefore logical that the EU was perceived by in Europe. Moscow as a natural, organic and like-minded

4 Russian International Aﬀ airs Council

The divergence in values is absolutely contrived. confl icts of interests will continue to arise for It does not exist. What exists in reality are the unrelated reasons and will remain unclear and counterclaims for a sole or joint understanding unpredictable for both sides. and interpretation of them depending upon the nature of world order perceived in Europe. Possible steps for restoring With regard to: and enhancing cooperation Only if the main diff erences mentioned above Moscow neglecting human rights or selective are eliminated will EU – Russian cooperation enforcing legislation - Russia is bona fi de mem- in all areas be consistent, productive and long- ber of the Council of Europe, numerous human term. At the same time in order to make some rights conventions and supranational and inter- progress, reduce the intensity of the confronta- governmental monitoring bodies; tion and facilitate fi nding solutions for the larger Authoritarianism - the recent developments in question, it is important to support cooperation the EU area from Poland to France have dem- without delay in those areas that are most in onstrated that in this respect the EU is applying demand now. double standards as well; The terrorist threat in the EU remains very acute. The war against corruption is eff ective only when After the Paris bombings, France is in the state waged jointly and if partners do not grant sanc- of war with international terrorism. This is one of tuary to dirty money; the most threatening challenges to the EU. The initial steps to rebuild cooperation in this direc- The confl icts in the Balkans, Ukraine, Georgia and tion have already been made but it’s critical to Moldova, and etc. -all of these could be resolved go further and promptly establish coordination if Moscow and Brussels integrate them into a in the fi ght against the common enemy and plan framework for a broader settlement; joint actions. Cooperation on this serious issue is Security – the situation with it also depends the driver to subsequently push in many areas. entirely on a broader settlement as well as EU These include soft security, i.e. the fi ght against: attitudes towards Eurasian integration. Instead organized crime, drug traffi cking, money laun- of discouraging it, the EU could acknowledge its dering, cybercrime, illegal migration. usefulness and envisage cooperation. Soft security may be provided only jointly. Limited cooperation in the mentioned areas The confl icts in the Balkans, Ukraine, Geor- is pointless and detrimental to the interests of gia and Moldova, and etc. -all of these could both sides. be resolved if Moscow and Brussels integrate There are many positive practices in this fi eld them into a framework for a broader settle- such as the continuation of interaction within ment; international organizations where progress can be extremely meaningful and specifi c. A priceless impetus to cooperation could be given through Thus, the main lesson of the past consists in parliamentary institutions. If the relevant com- understanding that Russia and the EU have failed mittee of the European Parliament by invitation to build an equal, mutually benefi cial, long-term of the Federal Assembly held one of its visiting relationship because they haven’t: sessions in Moscow, St. Petersburg or Kazan, it – reached an agreement on the common rules would serve as a prologue to the beginning of of the game and their shared understanding; professional communication. – created institutions necessary for this; – jointly agreed on what world order in Europe There are many positive practices in this fi eld they are trying to achieve. such as the continuation of interaction within Once this target is set up and the parties engage international organizations where progress in working to achieve it, they can remove any can be extremely meaningful and specifi c. confl ict of interests, as these are all secondary A priceless impetus to cooperation could be and derivative, independent of the nature of given through parliamentary institutions. disagreement and subject. Unless this is done,

5 Mark Entin, Ekaterina Entina · New agenda for Russia-EU relations

Increased attention should be given to this topic how to prevent such extremely harmful “experi- in view of the EU migrant crisis which has many ments” in the future. In addition, there is intensive dimensions. The migration problem and its con- and close cooperation on these issues within sequences are long term and everything that international organizations and forums, and the the EU is facing is familiar and understandable EU completely changes and updates the opera- to Russia. Restoring dialogue on the issue of ting conditions of the common capital market. combating illegal migration and the subsequent transition to a joint search for solutions would Attraction and the guarantee of investment are allow, among other things, a reduction in the key issues of any economic policy. Work on mega sharpness of the ongoing information war. regional projects such as Transatlantic Trade and Investment Partnership (TTIP) and Trans-Pacifi c Another unavoidable key area of cooperation is Partnership (TPP) and the conclusion of trade disarmament. The EU Member States are now agreements of a new generation (particularly embarking on a fundamentally new stage of between the EU and Canada) have introduced military construction. Decisions are being made new opportunities. They also represent the aban- that will have long-term adverse eff ects on hard donment of old practices. This cannot be ignored. security in Europe. It should in part be prevented, requiring a wide range of issues to be discussed: The fi ght against tax evasion is currently one – non-proliferation of WMD and missile techno- of the most vital topics for all states and politi- logy; cal unions. At an international level, agreements have been reached on the abolition of bank – prevention of an arms race in outer space; secrecy, automatic exchange of confi dential – control over fundamentally new weapon information, levying taxes in proportion to the types and systems; volume of activity by country, etc. However, they – confi dence and transparency; need to be implemented at the national level so – missile defence issues; that they could work on de-off shorization and – issues specifi c to the European theatre. achieving mutual goals. A fundamentally diff erent approach from the Information and communication technologies previous one would be extremely useful. The are changing the nature of economic activity fact that in the past only the North Atlantic Alli- in all areas of trade, manufacture, delivery of ance was perceived as a serious partner, and the products and services. With these technologies, OSCE failed to achieve anything positive, made both the EU and Russia expect to accelerate the bilateral dialogue on Russia-EU security relations resolution of problems of accelerated develop- meaningless. It would be desirable to make this ment and increased competitiveness. The EU has dialogue more independent and remove it from started building a digital economy and coopera- constraints of other formats. tion in this area is most promising. With regard to specifi c interaction in the economic In the previous period, joint work on the rap- sphere, it is conducted at the level of private busi- prochement of technical regulations was ness and supervised by national authorities. intense. It has become diversifi ed in nature and However, the legal framework and nature of addi- a signifi cant impact was achieved from the use tional control depends on the EU supranational of diff erent methods. The convergence of tech- institutions and consequently it would be logical nical regulations is critical for free access to each and natural to focus on the restoration of dialogue other’s markets. Specifi cally, it can decrease the in this regulatory area. Everyone on both sides is intensity of the struggle for the markets of third suff ering due to the lack of this and the loss of countries. profi t runs into billions of Euros. Many of these issues, not only in the EU, but on The direction of the real focus has to be the areas the Russian side as well, are already administered of fi nance, investment, the fi ght against tax eva- by supranational structures. Therefore, no prog- sion and erosion of the tax base, the new digital ress in these fi elds can be achieved without the eco nomy and technical regulations. The main establishment of contacts between the EAEU damage to the Russian economy achieved by the and the EU and gradual discussion of specifi c EU was in the fi nance. It is logical to start with this, issues. It is necessary for Brussels to cooperate whilst simultaneously attempting to determine with the EAEU to at least avoid the emergence

6 Russian International Aﬀ airs Council and deepening of diff erences in regulatory councils at ministerial level are no longer occur- sphere. If appropriate measures are taken now, ring. Numerous industry and specialized dialogues the transition will be much smoother and easier and the work of joint committees and bodies to implement in the longer term, when prerequi- serving them have been frozen as a result of sites for an “integration of integrations” are there. decisions from Brussels. Promising areas of cooperation which are of great interest for both sides also include energy, sustainable development, the environment and Cooperation in settling international con- climate change. The EU will be dependent on fl icts is already in progress. It has not been Russian gas and oil supplies for a long time and interrupted and it will continue. energy matters need to be de-politicized fi rst. The situation where the parties are so strongly dependent on each other but continually create Dissatisfaction with their activities gave rise obstacles to a stable and predictable coopera- to a storm of criticism in relation to such coop- tion in this area is abnormal, unacceptable and eration institutions. It was not constructive. The has to be changed. institutions themselves are not bad. The EU has similar arrangements with China and other countries and they justify their worth. To over- No progress can be achieved without the come their shortcomings in the future we need establishment of contacts between the EAEU to proceed with serious revisions of their orga- nization, focus, functioning and interconnection and the EU and gradual discussion of specifi c with the internal control and management sys- issues. tems within the EU and Russia.

Cooperation in settling international confl icts is Summits and meetings between the already in progress. It has not been interrupted Russian government and European Com- and it will continue. The EU and its Member States mission, and sessions of the permanent understand its importance, not only in respect cooperation councils at ministerial level are of Iran and Syria, but also in respect of many no longer occurring. Numerous industry other cases, including a large number of African confl icts (in which even schemes of operational and specialized dialogues and the work of cooperation were used in the past). However, it joint committees and bodies serving them will off er a greater return if and when we suc- have been frozen as a result of decisions ceed in overcoming the crisis of confi dence in from Brussels. the relations between Brussels and Moscow. Summits give an incomparable impetus to the development of relations and add to them a Promising areas of cooperation which are touch of personal confi dence, which is why they of great interest for both sides also include defi nitely should be renewed. However, they energy, sustainable development, the envi- need a fundamentally diff erent focus and to be ronment and climate change. completely freed from the mutual familiarization with each other’s position, which are already well known. They should be dedicated to discussing the relationship strategy, building relations and The future of the institutions establishing a real dialogue, while taking the and mechanisms of cooperation form of negotiations. Much of the responsibility for the current dete- It seems more reasonable to leave all the rou- rioration in EU - Russian relations lies in failure of tine matters for meetings at a government level. the bilateral cooperation management system Such meetings should summarize the eff orts of created by the two parties. It was the fi rst which many working bodies, including joint regulatory suff ered from it. Summits and meetings between documents prepared by them, and focus on fi nd- the Russian government and European Commis- ing solutions that cannot be achieved at a lower sion, and sessions of the permanent cooperation level.

7 Mark Entin, Ekaterina Entina · New agenda for Russia-EU relations

The permanent councils at the ministerial level mulated in this way. Such a situation must be are absolutely necessary. They correlate with changed and it is necessary to work on jointly the mixed nature of the EU, where competence adopting rules that could have a direct eff ect on has been only partially transferred to the supra- each other’s territory. This would give legal cer- national level. Not only the EU institutions, but tainty to business and the state apparatus (public also the participation of countries, is essential for service) enabling everybody to plan for the future. cooperation to become genuinely inclusive. It is In addition to the vertical cooperation manage- sensible that the councils should be held on a ment chain, a major role in giving institutionalized regular basis. relations a panoramic nature was played by joint bodies representing parliamentarians, business Summits give an incomparable impetus to and expert communities as well as by territorial the development of relations and add to policies such as the “Northern Dimension” and cross-border cooperation. them a touch of personal confi dence, which is why they defi nitely should be renewed. There is no real sense in restoring such bodies to However, they need a fundamentally diff er- their earlier form as they proved ineffi cient and ent focus. existed mostly on paper or for show. However, they could facilitate mutual understanding and rapprochement if they are radically restructured However, all of these bilateral control and and focused on tangible results. management bodies should only deal with those issues that cannot be solved at a lower In the past the Parliamentary Cooperation Com- level, between the civil bureaucrats or in an mittee wasted time and energy discussing the inter-agency format. All understandings and international agenda and mutual claims and it agreements they reach should become regula- failed to have any positive impact on the agenda tory, either immediately or after an appropriate or activities of either the European Parliament legal due process. It is essential to link coop- or Federal Assembly. Everything will change, eration and internal management together to if the Committee, or its equivalent, focuses on overcome defi ciencies of the past. normative standard-setting work proper to their legislative mission. There is a plethora of possible Numerous dialogues and working groups which topics: formed the lower level of cooperation struc- – environment protection; ture, began to deteriorate shortly after their formation or after a reset, were emasculated or – inheritance law; degenerated into mere meeting for meeting’s – common property passports; sake, for the same reasons. They could not take – common application of family law; binding decisions and were cut off from the – making law compatible with requirements of internal control and management systems. If we the digital economy; want to recreate these “work horses” of cooperation, then it should be done in a way so that we – creating a pan-European free market of legal could really move forward with their help. The services; elements of success include: – developing a legal framework for soft security, – clear strategic objectives; etc. – authority to issue binding texts; The Committee will have meaning in the future – integration of their work into the general if it is established as an umbrella structure, and operative and legislative process; dialogues and practicalities are transferred to – transparency to make national and interna- the committee level. tional lobbying interested in their activities.

One of the failures of the past cooperation man- Russian-EU cooperation at the expert level agement system was their inability to produce has always been very helpful for mutual binding decisions. Russia and the EU do not easily understanding and also had a great restrain- work in the mode of recommendations. Neither ing impact. party feels bound by agreements which are for-

8 Russian International Aﬀ airs Council

The Business Council, designed to connect busi- ing ceased. Only institutionalized cooperation nesses working on each other’s markets, has between structures that have real weight and never functioned properly. Its sessions were focus on the same issues are promising and convened in connection with summits and were should be supported. mainly engaged in appealing to the leaders. For business communities on both sides it was of no relevance and its claims to a role in coop- Cooperation in the fi eld of science and edu- eration management have not been justifi ed. cation also gives examples of joint projects However, businesses are quite capable of driving of the highest standard, which are extremely it to create an operating structure with a system benefi cial for both parties, it is necessary to of sectorial and specialized committees, a busy focus on guaranteed support for long-term agenda, and regular meetings. In addition, it cooperation. should have representation in international and national unions of entrepreneurs ensuring that the Council provides a link between the business The cross-border cooperation and the coop- communities. eration in the framework of the “Northern Dimension” can certainly be described as posi- Russian-EU cooperation at the expert level tive. The success of the “Northern Dimension” is has always been very helpful for mutual explained by the fact that Brussels has agreed understanding and also had a great restrain- to the Moscow proposal not to treat it as an ing impact. Unfortunately, there hasn’t been EU policy. It only needed to be a joint creation enough of it. The ability for individual par- and introduce co-management to start to work. ticipation in Pan-European and international Nevertheless, for Russia, with its vast territory, specialized associations hasn’t compensated such forms as the “Northern Dimension” and for this. Permanent functioning dialogues, joint cross-border cooperation are insuffi cient. They expert councils and institutionalized channels are too “small” but due to acquired experience of communication are a necessity, such as the can serve as a model for future formats of inter- St. Petersburg Russian-German dialogue which action. is currently failing. New fora could be more diversifi ed, extended to all areas and designed Cooperation in the fi eld of science and educa- to serve relations between Russia, the EU and its tion also gives examples of joint projects of the Member States as a whole. highest standard, which are extremely benefi cial for both parties, albeit to the scale of EU - Russian relations this is miniscule. It means that it is nec- Permanent functioning dialogues, joint essary to focus not on a constant restart of new expert councils and institutionalized chan- short-term projects (three years), but on guaran- nels of communication are a necessity. teed support for long-term cooperation. The cooperation management system is blamed In Russian-EU relations, technical assistance pro- as well by members of the expert community for grams and neighborhood policy instruments a huge defi cit of democracy. How to cope with have not justifi ed themselves. They were built this should be a subject of a separate discussion to create one-day projects, which did not leave but it is obvious that Moscow and Brussels will behind any tangible traces once external fund- have to start from scratch.

9 Mark Entin, Ekaterina Entina · New agenda for Russia-EU relations

THE CHOICE OF COOPERATION SCENARIOS

Experts and politicians of both parties have been predominately discussing the following six options in accordance with which further developments can follow:

Returning to a “strategic partnership” is fi rmly rejected by both sides, but it is understood diff er- ently. In Brussels it is believed that the renewal of “business as usual” would be an undeserved gift or dangerous concession to Moscow. Russia is convinced that the type of relationship that led to the confl ict in and around Ukraine is not a “strategic partnership” as it infringed on Russian interests and hence a return to the “pseudo-partnership” should not be allowed.

The current type of “frozen relationship” may persist for some time, unless an EU country breaks the anti-Russian consensus in the near future. It is a situation of “neither war nor peace” and satisfi es few people in Russia or EU. It would be absurd to retain what is detrimental to both sides under the guise of a “new normality”, although at the moment this approach is winning.

The Ministry of Foreign Aff airs of Germany and the German establishment recently suggested maintaining relationships in a mixed mode of cooperation and competition as a possible option. This option is extremely dangerous for Europe as it is fraught with a spontaneous slide into con- frontation; competition, as long as it is offi cially legitimized, will always prevail over cooperation.

For its part, some experts in Moscow started talking about the parallel existence of Russia and the EU, which is also not desirable. This was experienced in the days of the Soviet Union and hopefully, coexistence remains a situation of the distant past. Furthermore, in the context of global interde- pendence it is now physically impossible.

The only reasonable and realistic paradigm is cooperation. The logic of cooperation should domi- nate. We need co-operation, even in areas where divergence of interests is very high. Then it will be possible to smooth them out and consequently, cooperation will be much more convincing.

No one wants to even contemplate the “Greater Europe” from Lisbon to Vladivostok and “integration of integrations” at the moment. Allegedly, such an option has been buried, at least for the foresee- able future. If we are slaves of events, rather than those who dictate them, there is no doubt about this. However, never say “never” and if we agree that after some time the situation may change, we must prevent taking action that may impede it. This is an imperative for Russian-EU relations.

10 Russian International Aﬀ airs Council

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