The EU-Russia Review: Issue two. A report commissioned by the EU-Russsia Centre, November 2006. Egmont European Affairs Publication, 2006

This second issue of the EU-Russia Centre Review is devoted to the future of EU-Russia relations. There is hardly a more important subject for the EU than the relationship with its large neighbour and the important policy areas that include political and security cooperation, trade and economic affairs, energy, justice and home affairs, education, culture, science and technology. It is no secret that both the EU and Russia have been disappointed with progress under previous agreements. Both the 1997 Partnership and Cooperation Agreement (PCA) and the 1999 strategic partnership have failed to live up to expectations. In the negotiations which the EU hopes to start with Russia early next year, there is an opportunity both for stocktaking and to move forward into a broader framework for a deeper partnership. But what type of agreement should replace the PCA and what are the implications? This is the theme of the article by Sami Andoura and Marius Vahl who consider a number of options including abandoning the PCA, extending it or replacing it with a new type of agreement. In discussing the alternatives the authors examine the legal basis for any accord and their analysis quickly reveals the complexity of the issue of the treaty article on which the EU should base the new agreement. They conclude that the perennial question of the competence of the EU and its member states inevitably arises as the EU is likely to seek a comprehensive, mixed, multi-pillar agreement that will require ratification by all 25, (soon 27) member states and the European Parliament. Katinka Barysch touches on the prospects for the common economic space. She also argues that progress in EU-Russia relations has been frustratingly slow and outlines the thinking behind the move towards establishing the common economic space. Initially, a working group report led to the adoption of the four common spaces at the 2003 St Petersburg EU-Russia summit. Then further road maps were developed and endorsed by the 2005 Moscow summit The author notes the limited achievements in the field of regulatory convergence, but insists that this is a key point for future cooperation. She also argues that a common economic space could help Russia diversify away from its current over-dependence on oil and gas in its economic structure. She reaches the conclusion that the problem is that the EU has limited means to influence Moscow to move in this direction and Moscow has no say in the formulation of EU rules and regulations. Russian perspectives on the future of EU-Russia relations are reviewed by Nadia Arbatova. She argues that the relationship is at a crossroads, and there are two possibilities - each going their own way or coming together to seek a partnership of equals. Russia is still searching for its true identity, while the EU itself is suffering an identity crisis as a result of difficulties with the constitutional treaty. Nevertheless, the author is confident that there will be a new extended treaty, as this possibility is supported by the Kremlin, leading ministries and business. The birth of a new strategic partnership between the EU and Russia could help lead towards a more open and transparent Russia. Arkady Moshes takes stock of the cooperation between the EU and Russia in foreign and security policy. He argues that, while it may look good on paper, the reality is different, with very little practical cooperation between the two sides. The author attributes this to a number of reasons including the lack of consensus within the foreign policy elite in Moscow, the impact of EU enlargement, differences over the shared neighbourhood and doubts about the EU as a cohesive actor. Moshes argues that the list of shared foreign and security policy interests between the EU and Russia is very long and if the internal problems on both sides could be overcome then cooperation could grow quickly. However, based on present trends this area is unlikely to be at the forefront of the relationship. Andrew Monaghan covers a rapidly growing priority area in the relationship, namely energy. He details the concern in the EU after Russia’s behaviour towards Ukraine in January 2006 and the veiled threats that Russia could easily divert its oil and gas supplies to Asia. The author argues that Russia is unlikely to try and blackmail the EU as it needs Europe for finance and technology to renew its outdated infrastructure. Asia is not, he believes an alternative to Europe, given the lack of pipelines to Asia and concerns about China. Prospects for closer EU-Russia energy cooperation are fairly good but several problems must be tackled, including Russian accession to, or observance of, the Energy Charter, more transparency in both cases and measures to ensure the sustainability of Russian gas supplies. Above all, he states, the EU needs to establish an internal energy policy if it wants to pursue a coherent external energy policy. Mark Entin reviews the rather limited cooperation between the EU and Russia in the fields of education, culture, science, research and technology. Both appear to be aware of existing problems and several working groups and commissions have been established to consider ways to expand cooperation. One of the main problem areas is the non-recognition of Russian degrees in the EU. Another issue hindering contact and progress, is the dismal lack of EU students studying Russia. But the author concludes on an optimistic note, believing that the potential in these areas is very high. Olga Potemkina assesses cooperation in the sensitive areas of justice and home affairs. She notes that this is a rapidly growing area of interaction even though this is not a priority in the current PCA. She discusses the prospects for visa-free travel between the EU and Russia and notes that both sides have a vital interest in tackling issues such as terrorism, drugs, human trafficking, etc., together. The author also notes the inherent problems of the Russian judicial system, still struggling to reform itself into a genuine independent structure. Finally, Marie Mendras argues that President Putin's Russia is authoritarian and clannish, controlled by powerful elite groups with little real interest in promoting a more open relationship with neighbouring Europe. She believes that the EU's inability to forge a common foreign policy towards Russia hinders progress still further and is a result of its lack of commitment, energy and invention. Older member states are criticised as reluctant to provoke the Putin administration, and this lack of any real engagement makes it easier for Russia to hide behind a curtain of isolationist rhetoric, designed mainly for home consumption. Any fresh impetus will have to come from the new, more outspoken and critical, EU members who are not afraid to bring issues to the table. The collection of articles in this Review provides a comprehensive overview of the state of EU-Russia relations on the eve of momentous negotiations to replace the PCA. They are all tinged with a healthy dose of reality, pointing to the opportunities to develop a new and genuine strategic partnership – if the necessary political will is there on both sides. It is to be hoped that our political leaders seize the opportunity.