EU-Russia in the Aftermath of the Georgia Crisis: Back to Normality?

The European Union (EU) and Russia have resumed the dialogue at ministerial level and are expected to resume talks on a new treaty after they were suspended in September. This positive dynamic shall not be confused, however, with returning to business as usual. A number of issues continue to overshadow their relationship. The financial crisis, in particular, has hit the Russian financial market stronger than the world market. The Moscow Stock Exchange has lost more than 70% since August 2008. Nevertheless we have reached a moment from which the EU–Russia cooperation can either go forward, picking up on the most recent dynamic, or backwards again. It will require strong leadership on both sides to restore a constructive partnership after the 2008 Georgia crisis.

Business as Usual?

On October 8, 2008, the EU–Russia Permanent Partnership Council (PPC) met in Paris to discuss energy cooperation. It was the first meeting at ministerial level to take place since the armed conflict in Georgia in August. It was followed by a ministerial PPC meeting on freedom, justice and internal security issues in Paris and by a meeting of foreign ministers in St Petersburg.

Negotiations on a new treaty between the EU and the Russian Federation suspended in September are expected to be resumed in November after Moscow will have implemented its commitment to withdraw troops from Georgia proper no later than ten days after the deployment of the EU observer mission (EUMM).The next EU–Russia summit meeting is scheduled for November 14 in Nice. Directly one day later the G-20 will meet in Washington to discuss measures against the worldwide financial crisis. Prime Minister Vladimir Putin confirmed the Russian application for WTO membership in the speech given in Moscow on October 27. Russian integration into world economy is continued in this line. Under these conditions the outcome of the next negotiation round about the Georgian Crisis in Geneva could be the litmus test for Russian foreign policy. Meanwhile, some individual EU member states have launched new projects with Russia in diverse areas of cooperation. Particularly new agreements in the energy sector boost the feeling of growing mutual understanding, but not by all member states!

These developments are often taken as a sign of the EU–Russia dialogue’s gradually returning to normality, if not to business as usual. Indeed, there is little or no interest on either side to make this dialogue the casualty of the recent conflict in the Caucasus.

Overcoming the Georgia crisis will remain on the EU–Russia agenda

European policy makers may start to acknowledge that they probably are unable to settle the Georgia conflict any time soon. However, in Georgia, the EU has, for the first time, directly engaged in crisis management in the neighborhood it shares with Russia. The responsibility it has taken on is going to remain with the EU for some time to come. For this reason, the Georgia issue will also remain on the EU–Russia agenda for the foreseeable future. The withdrawal of Russian troops marks only the beginning not yet the end of its tacit and explicit controversy with the EU over the Georgia policy. This controversy is complicated by the liabilities resulting from the conflict, and by the diverging policy objectives pursued by the Russian Federation and the EU.

Russia’s recognizing the independence of Abkhazia and South Ossetia has established a fait accompli that can hardly be ignored even if the EU refuses to accept it. It is naive to believe that the recognition can be reversed any time soon. Both sides will have to learn to live with the ambiguity flowing from the preservation of their legal positions while avoiding any prejudice to final status of the two entities. It is similarly naive to believe that Russian troops will soon withdraw from Abkhazia and South Ossetia to their locations prior to August 7. Their number, clearly exceeding the previous level, is now determined exclusively by the bilateral agreements concluded by Moscow with Sukhumi and Tskhinvali. Furthermore, having accepted to guarantee the non-use of force, the EU has committed itself – willingly or unwillingly – to guarantee the new status quo. Need to explain the EU and Russia diverge on many central issues of further conflict resolution thus making the Geneva talks an uneasy enterprise. This was demonstrated by their failure to properly start on October 15 due to the unresolved dispute over the status of the Abkhazian and South Ossetian delegates. Talks have now been suspended until November 18 – until after the Nice summit meeting which will have to address the issue unless a solution is found at an earlier stage. The EU and Russia also reveal divergent visions of the purpose of the Geneva talks and of the mission of the international observers in the conflict area.
While the EU seeks to bring Moscow and Tbilisi together to overcome the dispute in a difficult and lengthy process and to help restoring the territorial integrity of Georgia, Russia sees Tbilisi as a single target whose rearmament should be prevented through an arms embargo. It has already submitted proposals to this effect within the UN Security Council and the OSCE.

The EU sees the mission of EUMM and of other international observers (the OSCE and the UN) to monitor the implementation of the cease-fire by all parties, to enable the return of displaced persons and, to this end, to reach out to Abkhazia and South Ossetia.

Moscow proceeds on the basis that the international observers shall focus on Georgia only and, for that reason, their area of operation shall be restricted to Georgia proper.

The Medvedev-Sarkozy accord of September 8 clearly limits the EUMM’s area of operation to Georgia proper meaning. Similarly, Moscow is not prepared to allow additional OSCE military observers to operate in either Abkhazia or South Ossetia. Due to the lack of consensus, their mandate has not yet been approved. In October 2008, the mandate of the UN military observer mission in Georgia (UNOMIG) could only “technically” be extended for four (instead of six) months after Moscow had insisted on renaming it into a mission in Abkhazia.

From the Russian perspective, the return of refugees is, for now, only negotiable as far as South Ossetia is concerned. Their return to Abkhazia is off the agenda.

No one should expect fast progress in the debate over regional security and the return of refugees comprising the mandate of the Geneva talks. However, the issue will be hard to isolate from the EU–Russia dialogue at the political level particularly since several member states insist that negotiations with Russia shall only resume after progress has been achieved in handling the Georgia crisis.

It is unlikely that outsourcing the issue to experts, diplomats, or senior officials would prevent the EU–Russia dialogue from becoming hostage to developments in the South Caucasus. This aim can only be achieved if strong political leadership is manifested by both the EU and Russia. Thus Georgia is going to remain an issue on the agenda of the forthcoming EU–Russia summit meetings.

Uncertainty over WTO accession complicates the deal with the EU

The Russian WTO accession is among the casualties of the recent Georgia crisis. Although talks within the multilateral group on the terms of the Russian accession continued in September, the crisis has generated numerous obstacles so that the accession procedures are now unlikely to be completed by the end of 2009 as was expected before. By reconfirming the Russian position in his speech, Putin has probably given a new drive to the talks.

The US Senate is no longer ready to abolish the Jackson-Vanick amendment that has restricted trade with Russia since the early 1970s, thus making the ratification of the Russian accession unrealistic any time soon. Furthermore, the final report of the WTO multilateral group on Russia depends on the consent of Georgia. Yet in late spring this year, Georgia stopped discussing the modalities for a joint customs control at the Russian borders with Abkhazia and South Ossetia after Moscow had granted both provinces de facto recognition in April 2008, four months before the armed conflict in the South Caucasus. Now, after their formal recognition, it is going to be even more difficult to obtain the required consent of Tbilisi.

The European Union has limited possibilities to influence the process of the Russian accession to the WTO since it has only few open issues with Moscow, such as the rising taxation of the Russian timber exports. The Russian bargaining with the group of the major agriculture producers over the size of allowed subsidies and the Georgia issue represent the most difficult obstacles to be removed.

Although the issue of WTO accession is not directly linked with talks on a new treaty between Russia and the European Union, the lack of progress at the WTO headquarters in Geneva will seriously affect them. As Fraser Cameron points out in the previous Spotlight Europe issue on EU–Russia relations (Spotlight Europe: EU-Russia), Russia was “not to enter the WTO by the time the next agreement is negotiated [...] the agreement would have to include economic clauses based on WTO rules in order to regulate trade relations between the partners until Russia would enter the trade organisation”. This option does not fit into the current Russian understanding of the format of the new treaty, which is supposed to be a framework document leaving detailed regulation to sectoral agreements. However, since the current Partnership and Cooperation Agreement is the single most important instrument to govern terms of trade between Russia and the European Union, it would either have to be continuously extended until Russia becomes member of the WTO (earlier it was supposed to be replaced by the new treaty), or the provisions of its economic titles would have to be rewritten in a separate trade accord to enter into force no later than the PCA expires. Mention Putin’s remarks this week that he still favours WTO entry.

The political climate is still not conducive for a fast repair of the EU–Russia relations

The Georgia crisis has deeply affected the approaches towards Russia within the European Union. The EU has managed, at every stage and not without difficulty, to reach consensus on how to deal with the crisis. It has explicitly refrained from adopting any sanctions and, instead, has offered cooperation in overcoming the crisis. However, it would be wrong to assume that business is as usual. Talks would resume against a more complex background than at the time when they should have been launched. And this new complexity will be less conducive for a fast progress. The coalitions of enthusiasts and sceptics of the new treaty have not changed significantly over the Georgia crisis. However, it has become more difficult for the enthusiasts to overrule the sceptics. The very concept of a “strategic partnership” with Russia has meanwhile become rather unpopular within the EU. The EU has yet to complete its Russia policy review – the second one within the last twelve months. Thus, despite the resumption of talks, the EU–Russia relations are still at a point from which they can either go forward, picking up on the current positive dynamic, or backwards. In order to help it to go forward, it will require not only the good will but also a strong leadership on both sides to steer the process of restoring a constructive partnership.

The way forward

Our analysis stipulates that both the EU and Russia are confronted not with the technical task of resuming the dialogue and talks on the new treaty but with a more fundamental challenge to restore trust and constructive partnership. In order to meet this challenge they should significantly strengthen communication at all levels rather than decrease it. They should re-engage in an open dialogue instead of purely bargaining over the wide variety of controversial issues well beyond the agenda for a new treaty.

This is one more call on the Russian Federation - to realize that it cannot afford to maintain good relations with the European Union without developing good relations with the Russia-critics within the Union and in our shared neighbourhood. This is particularly true against the background of a strong impetus towards the further consolidation of the EU provided by the current international financial crisis.

Indeed, the effect of the worldwide financial crisis on Russia should provide a strong additional incentive for Moscow and the EU to work much closer together. But there are voices in Moscow who interpreted the financial crisis as a crisis of the Putin system, i.e. the system based on the social agreement with the majority of the society which is supporting the system as long as economy grows. The tensions of the last months have unsettled the people.

The European Union should remain open for dialogue even though it repeatedly seems difficult to be conducted. Both sides also need to address the agenda of the Geneva talks in good faith. They should seek solutions not create problems.

While the issue of the independence of Abkhazia and South Ossetia does not seem to be solvable any time soon, they should rather focus on ways to improve the situation on the ground without prejudicing any decisions of the status issue.

Security in the region could best be addressed not by talking about disarming Georgia or withdrawing Russian troops back home but by designing a sub-regional confidencebuilding and arms control regime to prevent a repeated escalation of the conflict. Any arrangements to this effect should be made verifiable by an international observation mission to be allowed to operate in a security area on both sides of the conflict line. As the conflict in Georgia has caused much concern in other parts of Europe, restoring transparency and trust in the whole of Europe has to be dealt with as an urgent issue. No one would now expect Russia to return to the CFE regime. It also needs to be recognized, however, that the Georgia crisis has seriously damaged the prospects for the Adapted CFE to be ratified any time soon. Therefore, in order to save transparency of military activities in Europe crucial for maintaining mutual trust in Europe, it would be highly important that Moscow sends a positive sign by resuming participation in the annual data exchange.

Meeting these challenges would require political wisdom and strong leadership both from Moscow and the European Union. The forthcoming EU–Russia summit meeting in Nice on November 14, 2008, has thus an important mission to help mutual relations to further recover. The G-20 meeting on the following day will be directly linked with the talks about Georgia in Nice and those in Geneva on November 18, 2008 The meeting in Nice should not pretend to return to business as usual but rather concentrate on identifying common ground on the hard issues of the existing divergences in order to send a strong message that the EU and Russia are serious about their partnership.

No one should expect all outstanding issues to be resolved by the end of 2008. The challenge of managing EU–Russia relations will, therefore, require continued strong leadership from the incoming presidencies of 2009 – the Czech Republic and Sweden.

Cornelius Ochmann
Dr. Andrei Zagorski

The Authors
Cornelius Ochmann, Russia-Expert, Bertelsmann Stiftung, Berlin
Andrei Zagorski, Leading Researcher and Professor, Moscow State Institute for International Relations, Moscow

For Further Reading:
Cooperation between the European Union and Russia: A Matter of Mutual Interest, Advisory Council on International Affairs, No 61, July 2008 (http://www.aiv-advies.nl).
Anne Harmaste, The European Union’s policy towards Russia since 2004 and the Estonian-Russian relationship in this context, Tallinn, International Centre for Defence Studies, 2008 (www.icds.ee).

Kontakt:
Cornelius Ochmann
Programm Europas Zukunft
Bertelsmann Stiftung
Telefon: 0049 30 52 00 99 102
Fax: 0049 52 41 81 681 198
Email: cornelius.ochmann@bertelsmann.de
Internet: www.bertelsmann-stiftung.de

№11(27), 2008