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CEPS European Neighbourhood Watch. Issue 44
www.ceps.eu/files/NW/NWatch44.pdf
Editorial by Michael Emerson: «Closing down on 2008»
December saw high level meetings of the EU, NATO and the OSCE, as each defined its closing positions on this tormented past year, with all parties reflecting now on how the great financial crash is going to affect the wider European order.
OSCE scored absolute zero, since its ministerial meeting in Helsinki failed to agree any concluding declaration, with Russia blocking proposed language that it saw as targeting itself.
NATO hardly scored better, diverting the question of the Georgian and Ukrainian aspirations for membership action plans into language about Annual National Programmes, leaving it anyone’s guess whether this was just relabeling the MAP process, or retreating from Bucharest, or just obfuscation of the status quo.
The EU did several things. Its last summit of the year saw Ireland sketch the way for it to have a second referendum to ratify the Lisbon Treaty, and President Sarkozy push the 27 into agreeing an important climate change ‘20/20/20’ commitment. It renewed its security strategy, with a document that only really amounts to an updated description of the status quo with vague pointers into the future. More significant was the Commission’s Eastern Partnership document, which will fall to the Czech presidency next year to deliberate on. Here the main innovation was the proposal for an elaborate regional-multilateral dimension to be added to the previously bilateral mechanisms of the neighbourhood policy. This is for 5? partner states, Ukraine, Moldova, the three South Caucasus states, with Belarus as the ?. The initiative reflects how the Russian invasion of Georgia ‘helped’ solidify the will of the Commission and member states to propose an arrangement that brings the Eastern neighbours together without Russia, unless there is agreement to invite Russia to join as a third party on an ad hoc basis. The heterogeneity of the Eastern neighbours means that this regional multilateralism is unlikely to develop at all strongly, and the EU will not on the whole want to adopt the ‘Russia-as-threat’ doctrine as strongly as some of the new member states.
The key country among the Eastern partners, Ukraine, is itself in deep trouble: governmental instability, financial vulnerability, and now another year end crisis over its gas price and debt to Gazprom. The
technical obsolescence, depreciation and governance of this gas route through Ukraine are all in need of radical action to which the EU as well as Russia and Ukraine should contribute. The price dispute shows the need for greater transparency over precisely the ‘European’ reference price for gas, and what this will become in the next year since it is said to be indexed with a half-year timelag on the price of oil. But the price formula is kept secret by both Gazprom and the EU gas importers. This allows Gazprom in its current ‘public diplomacy’ to be saying that while Ukraine today pays $179 per thousand cubic metres, the EU will be paying $400 in the first half of next year. But what will the EU be paying if the oil price stays around $40? The EU’s gas import price is a matter of legitimate and major public interest, and the formula for its fixing should be published. The trunk transit gas pipeline itself needs to be subject to corporate restructuring, for example awarding its management through a long term concession to a three partner consortium (Russian, Ukrainian, European) – a subject to which we must return next year.
Moscow has two facts to reflect upon. The first and most urgent is its economic situation, the second its foreign policy brand. The year end is dramatic and ominous for Russia’s economy. With the oil price bubble pricked, its finances are in big trouble. This is time for Russia to reflect upon being a more genuinely cooperative partner on the European stage. The Eastern Partnership scheme would not have materialized if Russia’s leadership had not branded its foreign and security policies as threatening in the eyes of its EU and non-EU neighbours, albeit in different ways and to different degrees. Brands take time to be built up, and a poor branding in particular will only be corrected with sustained and credible action. Against this background President Medevedev’s plea to create a new pan-European security architecture, after the war in Georgia and now after a failed OSCE ministerial, looks inadequate and implausible.