Cooperation Between the European Union and Russia: a Matter of Mutual Interest

October 10, 2008 - nr.61
Summary

Conclusions and recommendations: proposals for new avenues
 

Shaping the new relationship
The AIV concludes that the EU can work constructively with Russia in a number of areas of common or complementary interest, even if Russia continues to act assertively in the future. These fields relate principally to economic relations, and of course to energy supply in particular. Energy is a key sector of mutual interest to both parties. On the one hand, the EU is a major importer of Russian gas and oil and on the other it is a vital market for Russia. Russia’s economy is still very one-sided but it is expanding as a result of the increase in oil and, consequently, gas prices. Three-quarters of foreign direct investment in Russia now comes from EU member states, and Russia badly needs Western technology to diversify its economy. There are therefore many openings for mutually beneficial developments and many opportunities for Western European enterprises, not only in the energy sector but also in agriculture and horticulture. The EU and Russia also have parallel interests in creating stable relations in countries on each other’s borders and in combating terrorist groups and organised crime.

The AIV associates the word ‘assertive’, which is so frequently applied to Russia today, with a country’s strong pursuit of its own interests, its imposition of strict conditions on cooperation and a drive to assert itself as a great power. However much the EU wishes to portray itself in the world as a ‘post-modern entity’ that has cast aside the rules of traditional power politics, it is facing a harsh reality in which positions of relative power between states still matter a great deal, governments at home tend to be judged on the results they get out of negotiations with other countries, and national prestige is a major source of influence. In the case of Russia, an assertive stance clearly entails demanding equality and reciprocity in any working relationship. This is particularly important for both the tone and the content of the new PCA between the EU and Russia.

The previous chapter showed that Russian representatives think the current PCA is patronising. With its regained self-image as a great power, Russia no longer wishes to be ‘guided’ by the EU on the path to democracy, the rule of law and a free market economy. The EU’s assumption of such a role with smaller countries that have a realistic prospect of EU membership or a relatively low level of development (like most of the ACP states)1 is understandable. It is also understandable that the EU adopted this attitude towards Russia during the disintegration of the Soviet Union and the sharp fall in living standards that accompanied the standstill of the Soviet economy. However, such an approach is misplaced towards a former superpower that is back on the road to recovery.

Russia has frequently made clear that it wishes to cast the treaty relationship between the EU and Russia in a new conceptual framework. This is a direct consequence of its desire (or demand) to be treated as an equal partner and to have the partnership anchored in an appropriate institutional framework. In effect, Russia is saying that it does not want its relations with the EU to follow the pattern that the EU has developed for its neighbours. To the Russians, that pattern is asymmetrical and founded on the principle that Russia must conform as a junior partner to the EU’s rules, standards and values. To the Russians, modernisation is not the same as Europeanisation. Russian’s stance is reflected in its call for a strategic partnership and probably also explains why it prefers to speak of a ‘treaty’ rather than an ‘agreement’.

How should the EU respond? Firstly, Russia does not aspire to join the EU. Given the importance and stature of Russia as a partner country, the relationship between the EU and Russia should be cast in a distinctive form. In the AIV’s opinion, Russia should participate as an equal partner in the process of shaping and defining the new relationship. This naturally means that the EU must not only ask its members what they think is important but also be open to Russian viewpoints.

The same also applies to the form of the new arrangement. The AIV has examined the models the EU uses for cooperation with other large countries. As noted above, the existing PCA with Russia was originally modelled on the system of instruments open to the EU’s neighbours (the ENP and the ENP instruments). However, with other countries like the US, the EU has other kinds of partnerships. In 1990 the EU and the US agreed a Transatlantic Declaration on EU-US Relations.2 This declaration has been elaborated upon in:
- a New Transatlantic Agenda (in 1995);
- a Joint Action Plan (also in 1995); and
- an Action Plan for a Transatlantic Economic Partnership (in 1998).

The consultation is otherwise structured in the same way as that between the EU and Russia, with a semiannual meeting at the highest political level that is closed with joint plans and declarations on specific areas. Below that summit level, many forms of bilateral cooperation and contacts develop as the need arises.

To structure consultations, Moscow is calling for an EU-Russia Council similar to the NATO-Russia Council. However, the analogy does not hold true. NATO is a purely intergovernmental organisation in which governments take joint decisions. In the EU, however, government representatives cannot sidestep its institutional framework and take decisions among themselves. The AIV notes that there is no specific council in which all the member states sit at the table to consult with the US, or for that matter with other great powers such as China or Japan. A semiannual summit at the highest political level is however held with the US in the same way that one is held with Russia. If Russia wishes to be treated as a great power, it can demand the same procedural relationship as the US, no less but also no more. This means that the EU should be prepared for forms of cooperation and agreements that are compatible with its capacity for action and responsibilities within the existing treaty framework: it can conclude a framework agreement in which the practicalities of the common spaces for cooperation are worked out in sectoral agreements. A mandate will then be required for each of the common spaces. In accordance with the EU treaty framework, the common spaces for cooperation correspond to those in the current PCA.

Building blocks for a balanced relationship
Now that an answer has been given to the question of shaping the EU’s future relationship with Russia, the AIV will put forward some ideas on fleshing out the content of the relationship. Whichever way the relationship with Russia is approached, energy interests will take centre stage. They are part of the common space of trade and economic cooperation, which is considered first below. There then follows a section on the common space of external security, with particular attention to the relationship with common neighbours and frozen conflicts. The next section considers the common space of freedom, security and justice, including such issues as domestic security, judicial cooperation, human rights and visas. This chapter closes by considering the common space of research, education and culture. Finally, we respond to the question on how the Dutch government and parliament can make a positive contribution to the relationship between the Netherlands and Russia and the relationship between the EU and Russia.

Recommendations

a. With regard to the common trade and economic space
Increased trade and private investment are in the interests of both the EU and Russia. It is therefore necessary to agree rules that create stable expectations and predictable behaviour. The rules should be agreed through Russia’s membership of the WTO, not through EU legislation. The AIV views Russian accession to the WTO as a necessary precondition for the successful implementation of a new PCA, after which further widening and deepening of EU-Russia trade and economic relations can be pursued.

Recommendation 1:
For the successful implementation of a new agreement in the field of trade and economic cooperation, Russia must become a member of the WTO as soon as possible. The AIV therefore recommends that the EU adapt its negotiating strategy to this key fact.

Negotiation of WTO membership must satisfy the requirement of equality: the EU (i.e. the European Commission) is negotiating with Russia in this common space on behalf of its 27 member states. Furthermore, the negotiations are not general but specific, and detailed timetables will be agreed. This inevitably requires patience but that is not unusual (compare, for example, the negotiations with India). Everything apart from the removal of customs duties will remain negotiable after Russia becomes a member of the WTO, such as accounting standards, investment guarantees and harmonisation of certification procedures for goods that are imported into Russia. All non-discrimination legislation will apply to all commodities, including oil and gas, once membership takes effect.

It has become clear to the AIV that Russia cannot be expected to ratify the Energy
Charter. When Russia becomes a WTO member, however, the Charter’s provisions on
trade will automatically enter into force. There is one shortcoming, however: investment
protection can be secured only within the framework of WTO-plus negotiations on an FTA.

Recommendation 2:
Do not expect Russia to ratify the Energy Charter; include the clauses on investment protection (as provided for in the Energy Charter) in the WTO-plus negotiations with Russia. Include the reciprocal rules on the protection of energy investments in an FTA as soon as Russia becomes a WTO member. An FTA should be the ultimate framework for economic cooperation.

With regard to investments, Russia itself recently introduced certain rules. This is a positive move in the AIV’s view, because rules are now in place where previously there had been none. Negotiating the whole catalogue of issues that are included in the chapter on economic cooperation in the current PCA would in our opinion be pointless. WTO membership should be seen as the primary goal and guiding principle. The AIV wants more, however, namely a free trade zone with Russia established in accordance with the negotiation mandate agreed within the EU. Again, until Russia becomes a WTO member no progress can be made in the field of economic cooperation beyond the current mandates of the official working groups.

Recommendation 3:
A free trade zone with Russia would entail not only the removal of customs duties but also WTO-plus issues such as rules on government procurement, harmonisation of taxes and harmonisation of the certification of goods imported into Russia. Therefore, widen the agenda from the abolition (or at least reduction) of tariffs to include the removal of non-tariff barriers.

The EU energy market has not yet been fully liberalised. One problem is the separation of production, transmission and supply of energy products (unbundling). At the beginning of June 2008, the EU energy ministers reached agreement in principle on the question of unbundling. Contrary to the European Commission’s original proposals, it was agreed at the urging of France and Germany that there need be no formal unbundling of vertically integrated energy companies (ownership unbundling) as long as there are guarantees that the distribution networks are managed as separate units. The details still have to be worked out, however, and the European Parliament still has to take a decision. The details are not unimportant. The extent to which networks can be used as collateral in their parent companies’ financing agreements and the ability to channel cash flow from the distribution companies to the parent companies are decisive issues. Nevertheless, this development in EU policy provides a potential solution for foreign investors like Gazprom, which are known for the far-reaching vertical integration of their production and marketing chains.

Recommendation 4:
The EU should seek reciprocal investment agreements with Russia in the energy sector. Such agreements could be based on the relevant provisions of the Energy Charter. A less stringent unbundling requirement could facilitate the conclusion of such agreements.

b. With regard to the common space of external security
In the AIV’s opinion, the EU should definitely keep the door open to Russian participation in and logistical support for EU peacekeeping missions outside Europe. We see Russia’s willingness to provide logistical support for the EU operation in Chad as a positive sign. With regard to Russia’s desire for a say in the preparation and implementation of operations, practical arrangements could be made on a case-by-case basis. It is customary in international CFSP negotiations for the EU member states that do most of the work to be members of a contact group set up for that purpose. If Russia is willing to participate in a peacekeeping operation and if its contribution is substantial, nothing seems to stand in the way of its having a say in the structure, allocation of tasks and management of such an operation, that is, of its sitting at the table with the EU participants in an ad hoc contact group. This would not require a separate structure. There are no such structures in the UN framework, although there are ad hoc committees. When the UN Security Council decides upon a mission, a troop contributors committee including all participating countries is formed for the duration of that mission to work out the details. Something similar should be possible for joint EU-Russian missions. Furthermore, every form of more extensive cooperation could be discussed at the regular semiannual EU-Russia summits.

Recommendation 5:
On the basis of practical arrangements such as ad hoc contact groups and contributors committees, Russia can be given a fitting voice in the implementation of joint EU-Russian peacekeeping missions. The EU should clear the way as need arises to establish such arrangements.

In addition to cooperation on international peace and security in general, the EU and Russia have shared interests regarding their common neighbours, even though Russia looks upon this area as a zero-sum game. In formal policy documents, the Russian government states that it, too, will promote the development of ‘friendly democratic neighbours’ in this common border area. With regard to security in the countries to Russia’s west and south, the EU and NATO each has its own role to play. The measures the two organisations will have to take to increase stability in these countries require the closest possible coordination. Such coordination is virtually absent at present. In the EU, peace and security talks will increasingly hinge on the EU’s High Representative for CFSP, provided the Lisbon Treaty is still ratified by all the member states. Centralising responsibility for traditional foreign policy and the common competences for external relations (trade policy and development cooperation) in one person’s hands will provide opportunities for greater coherence in implementing the Neighbourhood Policy, including relations with the common neighbours.

As noted above, the EU and Russia share an interest in security and stability in their common neighbours. With regard to Georgia and Moldova, two countries in which there are frozen conflicts, talks are being held between the EU and Russia; the EU even appoints special representatives for the two areas each year. There is therefore a channel for these important talks but they do not take place at a level at which decisions are taken, namely the highest political level. This must be improved.

The EU should not compromise its principle that sovereign states should decide for themselves what international organisations they do and do not wish to join. This is relevant in the light of Georgia and Ukraine’s application for membership of NATO. Geographically the former country may not be part of Europe, but politically it belongs to our part of the world. One question that needs to be answered is whether the formulation of article 10 of the NATO Treaty, which provides for the accession of European states, needs to be amended. The AIV thinks that while the two countries have a right to apply for membership, NATO is not obliged to grant them membership. The NATO countries have their own responsibility in this respect. They should carefully consider whether the security situation in Eastern Europe and the Caucasus would benefit from further enlargement of the alliance. One major consideration will obviously be the impact on the relationship with Russia in the longer term.

Recommendation 6:
The Netherlands should insist at EU level that substantive talks based on a common EU position are held on the EU and Russia’s common neighbours. Any ‘new style’ High Representative whom the EU appoints should investigate how talks with Russia can best be organised, in both parties’ interests, to achieve greater stability in the countries concerned.

c. With regard to the common space of freedom, security and justice
The parties concerned think cooperation with Russia in the field of domestic security is generally satisfactory. This is particularly true of police and criminal justice cooperation on human trafficking, child pornography and cybercrime. The AIV notes that there are also no complaints on the EU side regarding the exchange of information at strategic level to combat terrorism, prevent the proliferation of weapons of mass destruction, etc. The parties also recognise that they have common interests in combating financial crime, illegal immigration and environmental crime. With regard to the Schengen borders, further cooperation is being established on border controls. The results of joint projects in this area should be analysed, however, as little is known yet about their practical effect.

Recommendation 7:
The AIV recommends that the EU be urged to do a midterm review of the existing cooperation in the areas referred to above and use the findings to continue the cooperation in a pragmatic and vigorous manner.

Visa procedures are a sticking point in EU-Russia relations in the field of domestic security. Exemption from the visa requirement in particular is politically sensitive and is a long-term matter.

Recommendation 8:
The AIV recommends that the EU and Russia simultaneously speed up visa procedures for each other’s nationals, extend the validity and lower the cost of visas, and seek to exempt certain select groups from the visa requirement.

In the field of human rights, the Netherlands and the EU have access to all the legal instruments they could wish for. There is therefore no need for new rules. Russia is after all a member of the Council of Europe, a party to the ECHR, a member of the OSCE and a party to the most important human rights instruments – and all these ties inevitably entail obligations. What is lacking is Russian compliance with its treaty obligations. European countries require care in raising the subject of human rights with Russia. Claiming to know all the answers is counterproductive. It is also important that civil society organisations in Russia obtain the freedom to protect the fundamental rights of Russian citizens. Russian legislation makes it difficult to maintain contacts with foreign organisations and, especially, accept funds from them. This particularly affects human rights organisations but certainly others as well. The AIV nonetheless expects the long-term diversification and modernisation of the Russian economy will contribute to a broader swathe of society standing up for compliance with the rule of law and an end to legal nihilism. In the longer term this will probably also be the most effective approach.

Russia can in any event be expected to respect the standards for human rights and their protection laid down in the ECHR. Addressing Russia as a responsible stakeholder could increase the likelihood of its respecting these standards. Insisting on the ratification of the 14th Protocol, which provides for the modernisation of the Court, should be seen in this light. Modernisation is urgently needed with a view to the performance of the Council of Europe’s legal system. Pragmatic support, for instance for the reorganisation of Russia’s judiciary and the reform of its prison system, would also be a push in the right direction.

Recommendation 9:
The EU must continue to insist on Russia’s greater observance of human rights and compliance with the judgments of the European Court of Human Rights. Incidentally, the Council of Europe, not the EU, is the most direct channel for holding Russia to the Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR). In addition, Russia should be reminded, by the EU among others, that it shares responsibility for this organisation. The member states of the Council of Europe must persist in their efforts to persuade Moscow to cooperate on reforming the application procedure under the ECHR.

d. With regard to the common space of research, education and culture
The ‘soft’ sector is particularly suitable for strengthening cooperation between the EU and Russia. Contacts between members of the public, students and professionals can create trust and clear the way for more far-reaching joint projects. To this end, the EU could use its complementary competence in the field of research, as applied in the new Seventh Framework Programme for Research and Technological Development, for Russia’s benefit. Education and culture are essentially responsibilities of the member states, but the Union could also provide incentives – for example in the form of startup funds – to step up cooperation in these fields. Cooperation could be cast in both a general and in a more specific framework. The former would include umbrella programmes, for example in the field of primary, secondary and higher education. This would require a selection mechanism for the allocation of funds. The latter could be approached on a sector-by-sector basis. In addition to using the Framework Programme for Research, priority should be given to cooperation on higher education, language teaching and knowledge of each other’s history and culture. An interesting subject for research would be Russia’s gender and poverty policy.

Recommendation 10:
The AIV recommends that the exchange of pupils, students and teachers from educational and scientific research institutions and from cultural, language and history institutions be encouraged.

Such exchange programmes would also encourage tourism from and to Russia.

What the Netherlands could contribute
One of the main problems in implementing EU policy on Russia is how to coordinate actions undertaken on EU institutions’ authority and in their name with the bilateral relations maintained by the EU member states. A sense of proportion should be kept, however. It is an illusion to think that member states, especially the larger ones, can be forced to accommodate themselves in full to a common EU policy. But much could be gained if bilateral relations were aligned with at least some of the common positions that together form a general policy framework for the relationship with Russia. The Netherlands seems to be in a good position to build bridges between the policies of, in particular, the larger member states and the common policy at EU level.

Recommendation 11:
The Netherlands should try to help create a general policy framework at EU level that sets guidelines for the member states’ relations with Russia. An effective means would be to have the EU agree a new Russia strategy that recognises the momentous changes that have taken place in Russia.

The Netherlands is one of the largest investors in Russia. The investments have been made chiefly by larger enterprises and the AIV believes there are still missed opportunities for small and medium-sized enterprises. Vast undeveloped regions in Russia have enormous potential for agriculture and horticulture. The Netherlands could take advantage of its world leadership as an agro-industrial nation by actively contributing to increased food production in Russia. In view of rising food prices and the impact they are having particularly on the poorest people in the world, such a policy would complement Russia’s efforts to reduce poverty and achieve the Millennium Development Goals. The EU and Russia have parallel interests in this area.

Recommendation 12:
The Netherlands is a major investor in Russia but, as Russia improves the protection available to investments, it could do more to encourage investments by small and medium-sized enterprises, especially in the agriculture and horticulture sectors.

Finally, the Netherlands should continue and, where possible, strengthen the programmes already in place to improve the administration of justice and the quality of public administration in Russia and to encourage academic, artistic and cultural exchanges. Parliamentary visits at national level to and from Russia should discuss not only current policy issues such as human rights but also the exchange of experience with the operation of parliaments in the EU member states and Russia.

In summary, the AIV believes Russia should first become a member of the WTO before any meaningful progress can be made on trade and economic cooperation between the EU and Russia. A good relationship would also serve our common interest in increasing security in Europe, particularly in the EU and Russia’s common neighbours. We can work together to find solutions to the frozen conflicts in the countries concerned. The Netherlands must work on putting both points at the centre of debate in the EU.

 ___________________________

1 These are the 79 countries in Africa, the Caribbean and the Pacific that are party to the Cotonou Agreement and accordingly enjoy certain trade preferences with the EU and are eligible for certain EU aid programmes.
2 See the website: <http://ec.europa.eu/external_relations/us/index_en.htm>. This page also presents all relevant documents and the declarations and plans for each summit.
Advice request

Mr F. Korthals Altes
Chairman of the Advisory Council
on International Affairs
Postbus 20061
2500 EB Den Haag

 

Date      22 February 2008

 

Dear Mr Korthals Altes,

Meeting in joint session on 5 and 12 February 2008, the Senate’s Foreign Affairs, Defence and Development Cooperation Committee (BDO) and European Cooperation Committee (ESO) discussed submitting a request for advice to the Advisory Council on International Affairs (AIV) on the relationship between the European Union and Russia.

Pursuant to section 17 of the Advisory Bodies Framework Act and section 2 of the Advisory Council on International Affairs Act, I am writing to ask the AIV for advice on EU-Russian relations.

Background

Russia is the European Union’s largest neighbour, but at the same time it is also the other neighbour of the Union’s eastern neighbours (Belarus, Ukraine, Moldova, and – if Turkey joins someday –Georgia, Armenia and Azerbaijan). For the past few years Russia has been pursuing a distinctly assertive foreign policy, prompted in part by sharp increases in the strategic value of their stocks of fossil fuels, especially natural gas. Whereas previously the EU had been virtually the only customer, it must now share the field with Japan and emerging economies like China and India. The geopolitical arena is further complicated by the deployment of an anti-missile shield in the eastern part of the Union, the possible accession of Serbia to the EU and Kosovo’s unilateral declaration of independence. This means that the EU-Russia relationship should be seen in a broader context – that of the CIS and the United States – and in the light of the relationship with NATO.

The existing Partnership and Cooperation Agreement between the EU and Russia will lapse this year. Both parties are interested in concluding a new agreement, though they have different ideas about the content. Russia has indicated its interest in new strategic underpinnings, without specifying what form these would take, while most EU member states would prefer to model any future agreement on the old PCA, which is based on the four common spaces. The EU’s extensive package of programmes and resources in the area of economic integration and in the area of good governance, democratisation and human rights is open to all its neighbours, including Russia. The neighbours are free to choose the sectors in which they would like to work with the EU. Following governmental and parliamentary discussions in the country in question, the partner states’ preferences are then translated into a cooperation programme for which the PCA forms the legal basis. Once the PCA has been concluded, the EU will conduct a baseline survey, and then monitor progress on an annual basis.

Concerns exists about the reversal of democratisation processes, restrictions on the freedom of the press and the refusal to prosecute human rights violations, especially in ‘frozen’ conflict zones. Against such ground, it is questionable what role the Council of Europe and the OSCE can play and how effective the European Court of Human Rights can be. Another concern is the one-sided economy and the sluggish pace at which Russia is opening its markets. Since the disintegration of the Soviet Union, poverty has risen significantly and the population is shrinking at an unprecedented rate.

Another important question is what new opportunities strengthening ties with Russia might create. Examples include the expansion of food production in this vast country and improving the Union’s energy supply security.

The relevant questions are:

  • What scenarios are conceivable for nurturing the relationship between the EU and Russia, assuming that the latter’s foreign policy moves towards (i) a constructive partnership with the EU and (ii) an autonomous, assertive policy with geopolitical ambitions?
     
  • In these two scenarios how does Russia view working with the EU in the areas of peace, security and justice (especially counterterrorism, democratisation, free media, respect for human rights and frozen conflicts)?
     
  • What does each scenario mean for the economic partnership with the EU (especially with respect to open markets and economic diversification, including the expansion of  food production)? And what do these scenarios mean for energy supplies to the Union and its individual member states?
     
  • What do the scenarios mean for the EU’s relationship with common neighbours, particularly Ukraine (with its wish to join the EU), but also Belarus, Moldova and the countries of the southern Caucasus? And what kind of opportunities do the scenarios present for resolving the frozen conflicts in places like Moldova, Georgia, Armenia and Azerbaijan?
     
  • What instruments can the EU use in each of the two scenarios? The existing European Neighbourhood Policy (ENP) provides a key framework; all its programmes and funds are open to Russia. What types of projects could be undertaken and under what conditions? How can a balance be struck between carrots and sticks in each of the scenarios?
     
  • How can the Dutch government and parliament make a positive contribution to the relationship with Russia and the relationship between the EU and Russia in the two scenarios?

The Senate looks forward to hearing your thoughts on these matters.

 

Yours sincerely,

 

Yvonne E.M.A. Timmerman-Buck
President of the Senate

Government reactions

To the President of the Senate of the States General
Binnenhof 22
The Hague

 

Date     23 October 2008
Re        Government response to AIV report Cooperation between the European Union and Russia: a matter of mutual interest

 

Madam President,

Further to the letter of 28 July 2008 (your reference 141800U) from the chairs of the Senate’s Foreign Affairs, Defence and Development Cooperation Committee and European Cooperation Committee, I hereby present my response to the report by the Advisory Council on International Affairs (AIV) on EU-Russian relations.

The AIV published its report, Cooperation between the European Union and Russia: a matter of mutual interest, on 8 July 2008 at the Senate’s request. Less than a month later a conflict over South Ossetia led to the outbreak of hostilities between Russia and Georgia. The Georgian crisis raises the question of whether the EU’s relationship with Russia has changed fundamentally. I believe that in fact the relationship has changed less than one might first suppose. While relations with Russia have temporarily cooled, in the longer term Europe and Russia still rely on each other. Read with this premise in mind, the AIV’s report offers many useful points of departure for shaping the long-term relationship between Russia and the EU, even in the wake of recent events.

With the conflict in Georgia, Russia has given a clear signal of the role it means to play in the international arena: dominant, assertive and prepared to cross frontiers in order to defend its interests. This renewed self-confidence, manifested under former President Putin, reflects Russia’s ambition to play a role on the world stage and regain parity with the US. Russia’s assertive stance is fuelled in part by its sense of being surrounded and by distrust of the ‘true’ intentions of the US and EU.

In noting this Russian sense of grievance, which can partly be explained by the country’s turbulent history in the 1990s, I am not justifying it. Moscow must understand that violations of a neighbouring country’s sovereignty and territorial integrity, military action in foreign territory, and threatening language and inappropriate pressure send absolutely the wrong signal to the rest of Europe. The new Europe that has taken shape since 1989, and which has invested so successfully in stabilising and healing our continent, cannot permit a return to this kind of behaviour.

One factor that Europe will have to take into account in its relations with Russia is that the US’ primary political focus in the coming years will be on a multitude of thorny domestic and foreign issues, including the financial crisis, the economic situation, counterterrorism, climate change, Iraq, Afghanistan, Iran and North Korea. This means that relations with Russia may to an increasing extent be left in the hands of Europe. The agreements of 12 August and 8 September that ended the war in Georgia, supported by the US but negotiated by President Sarkozy of France on behalf of the EU, are harbingers in this respect.

The EU is a logical forum for conducting a strategic dialogue with Russia. The member states assembled in the Union maintain, individually and collectively, close relations with Russia. It is traditionally a European great power bordering on the EU. We will therefore have to coexist in some form or other. We have geographical, historical, economic and cultural ties, which will most likely grow tighter rather than looser in the 21st century. Russia is an integral part of European civilisation. Realising this, the EU member states should reflect on how to shape a lasting and mutually beneficial relationship with it. The Netherlands can support this process, since Russia sees us – partly thanks to our solid bilateral relations – as a small but serious actor that plays a constructive role in such significant forums as the EU, NATO, the OSCE and the Council of Europe.

The European Union owes its success to its codification of shared values, which find political expression in our common institutions and law. The Union is in this respect a unique phenomenon. Its European-wide, consensus-based institutions and working methods give it a special dynamic, which is not always understood by great powers like Russia. European integration offers powers and political blocs the chance to relate to one another in a world in which they are ever more closely interconnected and interdependent.

Russia needs the EU just as much as we need Russia: the financial crisis has demonstrated this once again. This should encourage the development of a longer-term strategy aimed at translating our geographical, economic and cultural ties with Russia into concrete actions that can repair and reinforce the mutual trust that the Georgian crisis has shaken.

We must bear in mind in this process that Russia is going through a drastic transformation, which it is trying as much as possible to manage on its own terms and at its own pace. It is doing so in fits and starts. The Russian government has at times made choices that are incompatible with the European model and universal values that the Dutch government resolutely upholds. It is not for us, however, to dictate to Russia how to shape its political system and society. In the long term, I hope that Russia will move closer to shared European standards in an increasing number of areas, as our contacts and economic relations with each other grow. This will only be possible if we hold fast to our own principles. The Union must be confident of its own strength. We must continue to engage with Russia and hold it accountable on universal values and past undertakings, even if we cannot immediately agree with each other on how these should be applied. We must continue to conduct a frank and critical dialogue, which includes human rights and democratic principles. Plain speaking is what Moscow understands best.

The European Union will also have to be self-critical. If we have learned one thing from the Georgian crisis, it is that concerted EU action can yield results where Russia is concerned. The more we speak with one voice, the greater the Union’s ability to act as a European power that can influence Moscow. Equally, internal divisions that surface from time to time in relation to Russia, and which Russian diplomacy tries to exploit in bilateral relations, can undermine the EU’s effectiveness. Moreover, the CFSP is still sometimes a precarious instrument when the exercise of power is at stake, especially in relations with great powers for which military force plays a key role in decision-making. The Union has some homework to do on this subject; certainly greater investment is needed in consultations and mutual understanding among member states on relations with Russia. We must not be afraid of difficult discussions, which may sometimes be coloured by member states’ specific historical experience. In addition, issues of common European interest like energy supply security should be dealt with jointly as far as possible (alongside our own efforts to diversify our energy sources). Concerted action by EU countries can help redress the balance of forces between Europe and Russia.

We also need to recognise that Europeans will not only want to shape their relations with Russia via the EU. Europe and Russia will also encounter each other in such international forums as the UN, NATO and the OSCE.

In my view, cooperation between the EU and Russia mainly thrives when it is focused as much as possible on concrete measures and activities. Our experience with the first Partnership Agreement confirms this rule of thumb. The EU is one of the few organisations that offer a unique combination of policies in many areas and the corresponding means of implementing them. In negotiating a new EU-Russia Partnership Cooperation Agreement, the Netherlands favours a legally binding accord with a broad focus on such issues as energy, trade, democratisation and human rights. The partnership should also be strengthened in the area of security policy. For example, Russia could be more involved in ESDP missions like those now under way in Chad and the Central African Republic and could work more closely with the EU on counterterrorism.

On a more modest scale, the Netherlands is trying to shape its bilateral relationship with Russia along these same lines. Activities are being financed through our social transformation (MATRA) programme to strengthen the rule of law, for example, which will ultimately benefit the public and the business community. Taking many small steps in the right areas can help promote modernisation.

I would also like to reflect on one aspect of European policy on which discussion has intensified following recent events in Georgia: the European Neighbourhood Policy (ENP), a major focus of which, crucially, is on relations with the Union’s eastern neighbours. At the initiative of the Polish foreign minister and the next two countries to hold the EU Presidency – the Czech Republic and Sweden – the European Commission will submit a proposal in December 2008 for an Eastern Partnership with the six eastern ENP countries.1 Besides strengthening bilateral relations with these countries in areas including trade, visa liberalisation and people-to-people contacts, the Partnership is intended to have a multilateral component. This planned multilateral forum could serve not only to increase the visibility of these countries’ ties to the EU, but also stimulate more coherence and cooperation among them.

Although the countries that initiated this Eastern Partnership meant in principle to limit participation to ENP partner countries, I do not want to immediately rule out the possibility of some form of Russian involvement.2 In the final analysis, the EU’s eastern neighbours are also (directly or indirectly) Russia’s neighbours. Both the EU and Russia stand to benefit from a stable border region free of conflict. Our common neighbours also need to strike a balance between charting their own course and maintaining their historically important ties with Russia. For the Netherlands, of course, it goes without saying that countries should ultimately be able to decide for themselves which alliances or partnerships they choose to enter into.

In short, while I believe that the Georgian crisis marks a watershed in our relations with Russia, I am not convinced that the crisis has fundamentally changed the geopolitical situation. The West will continue to uphold the core of the policy it has followed in recent years: that it makes sense to incorporate Russia into established international forums (as with the WTO) or tie Russia to them (as with the EU and NATO). This makes Russia a co-responsible partner, embedded in, and accountable under, international legal rules. We are under no illusion that this will be an easy process; the Netherlands is not naive. Russia will continue trying to shape events to its own advantage. Given the autocratic inclinations of the Russian government, it may well seek to define its relative position in the world (shifting from superpower to mere great power and facing the economic rise of India and China) by emphasising its own grandeur at home and abroad. This will make it a troublesome player in the arena of international politics. Yet Russia no longer has any ideological ambitions or power of attraction; and whatever the extent of its economic and military capabilities, they are too limited to allow it to singlehandedly determine the course of international relations.

In general, the challenge for the West will be to respond in a timely, vigilant and prudent manner to tensions and conflicts involving Russia. This will place high demands on European diplomacy, which where possible should be conducted in tandem with the US. In any case, cooperation between Europe and Russia remains ‘a matter of mutual interest’.

I would therefore like to extend my sincere thanks to the Advisory Council for International Affairs for its work in drafting this solid, considered report. I will draw on its recommendations and conclusions in discussions on the development of EU-Russian relations.

Please accept my best wishes for the success of your symposium on the AIV report on 27 October.

 

Yours sincerely,

Maxime Verhagen
Minister of Foreign Affairs

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1 Armenia, Azerbaijan, Georgia, Moldova and Ukraine. The ENP is also in principle open to Belarus.
2 Russia is already a recipient of ENPI funds.
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