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The EU and its Eastern Partners: the role of the ‘Russia factor’ - Thoughts related to the Vilnius summit and the Ukrainian ‘NO’

2013.11.28. 14:09 Világgazdasági Intézet

Slow progress within the EU Eastern Partnership (EaP) program and disappointment of all affected partners can be explained by both problems arising on the EU and the Eastern Partners’ side. Besides recent economic difficulties, diverging member state interests and approaches including the ‘South versus East’ problem, shared competencies between EU institutions, uncertainties of conditionality, problems on EU side include some major deficiencies like the lack of incentive of EU membership or the slow progress in the visa-free movement of people,  the  second major issue for most EaPs. All in all the ‘carrot’ offered by the EU is a small one compared to the appetite of the targeted countries. At the same time Eastern Partners can also be blamed since most of them delay in ‘doing their homework’, in transforming their political, juridical or economic systems.

In some cases this ‘delay’, that is the lack of real commitment to doing the homework is greatly influenced by a third factor, namely the forced choice on foreign policy (and foreign economic policy) orientation for which Eastern Partners seem to be either not ready or not dedicated enough. The EU-EaP summit being held in Vilnius just in these days could have been a milestone in this respect. The core of the problem roots in the EU ‘offer’ of deep and comprehensive free trade agreements (DCFTAs) that institutionally exclude the possibility of the Eastern Partner’s parallel economic integration towards East. The first-ever EU EaP Association Agreement including a DCFTA has been expected to be signed in this summit with Ukraine.

Eastern Partners can be divided into two groups. The first includes those partners that declared their willingness to become members of the European Union: Ukraine, Moldova and Georgia. These states have been expecting clear signs, reflecting worthy of their European choice from the EU. The European Neighbourhood Policy (ENP), and particularly the EaP, as the answer to these expectations on part of the EU is probably not convincing enough for them. Meanwhile, their domestic political landscapes have been changing as well. For instance, Ukraine has become a more reluctant or at least hesitating partner, while due to recent domestic political events Moldovan commitment might become also uncertain in the future. Shifts in these two countries are important, since after the initial period when Ukraine was the pioneer country in the Eastern dimension of the ENP, for the past few years Moldova has been seen as the ‘best pupil in the class’, that is the most advanced in rapprochement to the EU. Definitely, now Georgia remains the most determined Eastern Partner. Although members of the second group, Armenia, Azerbaijan and Belarus, have less definite goals and they intend to establish close ties without any real commitment to the EU, the forced choice might be relevant even for some of them in the future.

Based on the analysis of economic links including trade flows between European post-Soviet states and Russia on the one hand, and with the EU on the other, we may draw the conclusion that although Russia still considers itself as the economic centre of the post-Soviet space, this role has been greatly challenged by the growing trade importance of the EU (and others like Turkey or China). Research on other kinds of economic ties such as FDI and labour migration may tincture this picture. While EU capital is dominating, Russia as a source of FDI is also considerable, however, not always so visible. Naturally, the picture is differentiated in individual country cases. Considering labour force movements from individual post-Soviet countries, the EU is a most reluctant partner. Russia has recently launched a policy of differentiation with offering united labour market for some countries ready to join new post-Soviet integrations, while formulating toughening limits to the others. Why are these facts important?

Based on recent strength of economic links between individual EaPs and Russia, it is obvious, that although they have been weakened to a great extent since the 1990’s in several cases they are still strong enough to be a reasonable basis for joining Russia-led post-Soviet integrations. Therefore, the forced choice might be painful. The EU should have taken into consideration this fact to a greater extent than it does. The carrot offered to the Eastern Partners aimed at involving them both into the political association and the economic integration should have been attractive enough and given in due time. Political conditionality, uncertainties of economic benefits of DCFTAs in short and medium term, reluctance to provide mobility to the citizens of EaPs and the lack of really motivating amount of EU financial support led and still may lead in the future  as well to unexpected result: pushing some of the Eastern Partners to look for other integration schemes and partners. Russia is ready to grab the opportunity. Moreover, other major international players (like Turkey, the regional power or  China, the global player) have their economic interests in the region as well, with their ‘offers’ often being without hard ‘conditions’. For all the above reasons, the EU should be more pragmatic when formulating its Eastern Partnership policy, paying much more attention to the ‘Russia factor’. Otherwise it might be a loser due to its slowness, cautiousness and strict set of both political and economic conditions.

Zsuzsa Ludvig

Further reading:

Zsuzsa Ludvig: The EU and its Eastern Partners: Conditionality and Expected Benefits. How does the Russia Factor Matter? Documenti IAI 13. Istituto Affari Internazionali. 9. 11. 2013.

(The blogpost and the study was supported by the OTKA K 105914 research project / A blogbejegyzés és a tanulmány kutatási eredményeit az OTKA K 105914sz. kutatási projektje is támogatta.)

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