THE NEW NORTHERN DIMENSION OF THE EUROPEAN NEIGHBOURHOOD EDITED BY PAMI AALTO HELGE BLAKKISRUD HANNA SMITH FOREWORD BY MICHAEL EMERSON CONTRIBUTORS PAMI AALTO AADNE AASLAND MORTEN ANKER HELGE BLAKKISRUD BJØRN BRUNSTAD IRINA BUSYGINA MIKHAIL FILIPPOV JAKUB M. GODZIMIRSKI ALF HÅKON HOEL SIGVE R. LELAND KARI LIUHTO KATRI PYNNÖNIEMI HANNA SMITH NINA TYNKKYNEN INDRA ØVERLAND The Centre for European Policy Studies (CEPS) is an independent policy research institute based in Brussels. Its mission is to produce sound analytical research leading to constructive solutions to the challenges facing Europe today. The views expressed in this publication are those of the authors writing in a personal capacity and do not necessarily reflect those of CEPS or any other institution with which the authors are associated. ISBN 978-92-9079-834-7 © Copyright 2008, Centre for European Policy Studies. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means – electronic, mechanical, photocopying, recording or otherwise – without the prior permission of the Centre for European Policy Studies. Centre for European Policy Studies Place du Congrès 1, B-1000 Brussels Tel: 32 (0) 2 229.39.11 Fax: 32 (0) 2 219.41.51 e-mail: [email protected] internet: http://www.ceps.eu Cover photograph of Longyearbyen, the Svalbard Archipelago, printed with permission from Tommy Dahl Markussen © CONTENTS Foreword Michael Emerson....................................................................................................... i Acknowledgements............................................................................................. iv 1. Introduction Pami Aalto, Helge Blakkisrud & Hanna Smith .............................................. 1 2. Russian foreign policy, regional cooperation and northern relations Hanna Smith ................................................................................................. 19 Part I. Regional and Sectoral Partnerships 3. Learning by doing: The Barents cooperation and development of regional collaboration in the north Sigve R. Leland & Alf Håkon Hoel ............................................................... 36 4. Best practices in fisheries management: Experiences from Norwegian–Russian cooperation Alf Håkon Hoel.............................................................................................. 54 5. Experiences of environmental cooperation between the Nordic countries and Russia: Lessons learned and the way forward Nina Tynkkynen............................................................................................ 71 6. Assessing the Northern Dimension Partnership in Public Health and Social Well-being Aadne Aasland .............................................................................................. 91 7. EU–Russian cooperation on transport: Prospects for the Northern Dimension transport partnership Katri Pynnöniemi ........................................................................................ 109 Part II. Prospects for New Energy and Public–Private Partnerships 8. Natural gas projects in the Russian north: Implications for northern European cooperation Indra Øverland............................................................................................ 131 9. Russia’s energy strategy and prospects for a Northern Dimension energy partnership Jakub M. Godzimirski.................................................................................. 145 10. Foreign involvement in the Russian energy sector: Lessons learned and drivers of change for the Northern Dimension Morten Anker & Bjørn Brunstad................................................................ 164 11. Strategic sectors of the Russian economy: Implications for developing new Northern Dimension partnerships Kari Liuhto................................................................................................... 180 Part III. Towards a New Northern Agenda 12. End comment: EU–Russian relations and the limits of the Northern Dimension Irina Busygina & Mikhail Filippov ............................................................. 204 13. Policy recommendations for northern cooperation Pami Aalto, Hanna Smith & Helge Blakkisrud........................................... 220 Glossary of Abbreviations.............................................................................. 235 About the Authors............................................................................................ 237 FOREWORD MICHAEL EMERSON he Centre for European Policy Studies greatly appreciates having been invited to publish this book on the new Northern Dimension, T which serves as an important piece in the jigsaw puzzle of the European Union’s multiple policies towards its neighbours. The puzzle has many pieces indeed. To the north there is the EU’s uneasy relationship with Russia, for which the new Northern Dimension is seen by the EU as its north-west regional adjunct (but I comment in a moment on the role of Norway and Iceland in this initiative); to the east a newly baptised Eastern Partnership is currently being shaped against the background of the eastern branch of the European Neighbourhood Policy (ENP), and which also has its regional dimension in the Black Sea Synergy initiative; to the south-east there is the stabilisation and association process for the Balkan states that are not yet members of the EU; and to the south the Barcelona process has morphed into the southern branch of the ENP, which is in turn now morphing into the Union for the Mediterranean. This multiplicity of constantly changing initiatives is already telling us that there is an intense but complex search process going on, seeking the optimal arrangements between the EU and its very different neighbours. To put this in a somewhat dramatised historical perspective, this is the story of the newly post-modern contemporary Europe trying to shape its relationship with the former Russian empire and Soviet Union, and the former Ottoman and Arab empires. To this vast landscape of neighbourhood relations the new Northern Dimension brings a number of interesting particularities, which this book shows to be a combination of qualities and limitations. First, it is an exercise in neighbourhood policy, in which Norway, Iceland and the EU ally to try to do something useful with north-west Russia. Within the EU, Finland took the first initiative in 1998 to launch the (old) Northern Dimension policy, and it sustains a highly active role in the (new) Northern Dimension. This book is sponsored jointly by the Finnish | i ii | MICHAEL EMERSON and Norwegian ministries of foreign affairs, in itself a discreet message. The new Northern Dimension sees the EU and the two non-EU partners of the European Economic Area join in a foreign policy initiative with the EU. Second, it is an exercise in what the introductory chapter to this book brands as ‘small-but-smart’ policies, and third, an operation that seeks to ‘fly below the radar’ of the high politics of EU–Russian relations and of Russian geo-politics. Can this work? This is the question the book addresses. The small-but-smart test seems to have been passed quite successfully. Should this remark seem to be vague and lacking in vivid interest, remember what ‘small-but-not-smart’ policies in Russia’s neighbourhood means. This summer’s war in Georgia gives the perspective, in which this tragic episode resulted from the underlying lack of trust between Russia and Georgia, and then miscalculation in response to provocation. By contrast, for Finland and Norway the new Northern Dimension is an extension of consistent bilateral policies of engagement with Russia. The new Northern Dimension also ranks as small but smart in relation to the EU, in that Finland and Norway have exercised leading roles while smoothly securing joint ownership of it with the EU, which brings larger political and financial resources into play. The tensions that arose within the EU in the last year over French President Nicolas Sarkozy’s initiative on the Union for the Mediterranean shows that regional leadership and EU ownership are not always the easiest of qualities to combine. The test on flying below the radar, however, reveals limitations. As the book shows, sectoral programmes for public health and the environment have made substantial progress, and these can rank as largely de-politicised activities. They could indeed fly below the radar. In two other respects, however, the limitations are seen to be significant. The energy sector is of outstanding importance and potential for the Northern Dimension area, with huge new investments due in oil and gas fields (the offshore Shtokman field and the Yamal Peninsula). But here the new Northern Dimension has not been able to achieve real traction. The big action has been taking place elsewhere in dealings between Moscow and major European oil companies with national governments (including Norway) behind them. Also, at the level of foreign investment in Russia more generally, the experience of Finnish and Norwegian companies shows that Russia’s current policies of economic nationalism in favour of FOREWORD | iii ‘strategic’ sectors are a serious hindrance, which the Northern Dimension cannot overcome. On the other hand, the new Northern Dimension would seem to score positively as a confidence-building or confidence-deepening measure with Russia. Here flying below the radar has seen adoption of a work programme jointly with Russia, even