(Reuters) – When Russia wants to get its point across, it tends not to leave room for misunderstanding.
Put out by Europe’s efforts to build closer relations with six countries in east Europe and the Caucasus – former Soviet republics that Russia regards as in its sphere of influence – Moscow has been steadily turning up the heat.
Armenia was the first to cave, turning its back on an “association agreement” with the European Union and agreeing instead to join Russia’s customs union – a trade zone with Belarus and Kazakhstan launched in 2010.
Moscow has also homed in on defense or trade vulnerabilities in Georgia, Moldova and Azerbaijan, although the first two remain likely to move ahead with closer EU ties at a special summit in Vilnius in late November. Belarus, despite friction with Moscow, remains firmly in Russia’s camp for now.
The big question is Ukraine, economically and politically the most important of the partnership countries. Despite pressure on trade, including key gas supplies from Russia, which sees Ukraine as culturally its own, Kiev is determined to look West and seal closer links to Europe next month.
That’s not what Moscow wants to hear, or will accept.
“What we have seen during the past few weeks is brutal Russian pressure against the partnership countries of a sort that we haven’t seen in Europe for a very long time,” said Sweden’s Foreign Minister Carl Bildt last month, describing Moscow’s actions as “economic warfare”.
Russia has said it is merely protecting its interests. “Russia is in no way trying to infringe on anyone’s sovereign right to make decisions about their international activity,” President Vladimir Putin said in September.
Nearly all the partnership countries do the vast majority of their trade with Russia and rely on it for gas. Moscow is concerned about a flood of European goods entering the country if Kiev signs a free trade agreement with the EU.
Trade is particularly sensitive: Russia was Ukraine’s biggest trading partner but not any longer. Now it is the EU, with 27 percent of Ukraine’s exports and 34 percent of its imports, and the volume growing by double digits annually.
Russia is also wary of the EU’s broader agenda. Drawing in countries in the region could over time help Europe secure a degree of influence over vital gas and oil supply routes towards the West at the expense of Russia’s dominance.
As a result, Putin has threatened to impose punitive tariffs and other restrictions on imports via Ukraine if it goes ahead with the EU agreement.
“We would somehow have to stand by our market, introduce protectionist measures,” Putin said last month. “We are saying this openly in advance.
As if to underline the message, Russia has taken steps against Lithuania, an EU member state that currently holds the union’s presidency, imposing extra customs checks on Lithuanian trucks and heavy losses for Lithuania’s large trucking industry.
And in the back of the minds of all the partnership countries is the 2008 war between Russia and Georgia, when Moscow made very clear its power over a former republic.
…REPERCUSSIONS
Both Ukraine and the EU appear determined to seize the moment and sign the agreement, no matter what the reservations. The message that would send to the wider region, including the resource-rich Caucasus, would be a powerful one.
From the EU’s point of view, Ukraine is an opportunity that cannot be missed: Kiev wants closer association and if Europe does not act now, it may well lose it to Russia and the customs union forever, the tide of history ebbing away.
The failure to draw in Ukraine would likely diminish the EU’s sway over other countries covered by the eastern partnership policy, undermining its goals of spurring democratic reforms in the region and safeguarding political stability.
“We cannot accept any attempt to limit these countries’ own sovereign choices,” European Commission President Jose Manuel Barroso told the European Parliament in his annual address last month. “We cannot turn our back on them.”
The hope in Europe is that opening trade routes will improve cooperation on other issues such as security and, over time, demonstrate the benefits of democratic governance.
In the near-term, Europe needs help in addressing crime – countries such as Moldova lie on important trafficking routes towards the EU. In the Caucasus, territorial disputes such as that between Armenia and Azerbaijan could hurt Europe’s energy aims and pull it into conflict with Russia.
“The fundamental interest in the eastern partnership is to have a zone of stability to the east of the European Union and not be faced with state failure … in which case there could be spillover into the EU,’ said Michael Leigh, a senior adviser with the General Marshall Fund in Brussels.
PAY THE PRICE
But for all its planning, Europe also knows retribution, in the shape of an energy squeeze, is likely from Russia.
Moscow, which has a long-standing disagreement with Ukraine over gas, has said it will raise Ukraine’s gas prices and officials do not rule out it doing the same for the EU, which gets nearly 40 percent of its gas from Russia.
Moscow has in the past, during disputes with Ukraine, cut off the flow to EU member states, several of which are entirely dependent on Russia’s supplies, and could do so again.
“We would not be surprised if they play the gas card, it’s among the factors we are taking into account,” said the EU official involved in the Ukraine negotiations.
But the EU’s calculation also is that Russia, which relies on Europe for revenue from its gas, will not impose restrictive measures for very long.
Knowing the immediate retaliatory impact of the association agreement will be felt first in Ukraine, where living standards are well below the EU average, Brussels is ready to take steps to support the country. These include allowing the free-trade benefits to kick in immediately – rather than Kiev having to wait until all 28 EU members have ratified the agreement.
For Ukraine, with its economy based on steel, chemicals and agricultural products, free trade with a bloc of 500 million European consumers and businesses is a huge boon.
But while the association agreement will bring extensive trade benefits and in time a deal on visas, Ukraine is seen as too different in too many respects to join the list of countries in line to join the European Union any time soon.
In that respect, Ukraine faces years in a twilight zone. Closer to Europe, but with Russia breathing down its neck, and a long way from the protective cloak of full EU membership.
Reuters has the full article
