Friday, 26 November 2010

Putin suggests an EU-Russia union

Should Russia and the EU link up in a "common continental market?" Vladimir Putin thinks so. The Russian prime minister made the case for such a union in an editorial appearing in a German newspaper yesterday ahead of a two-day visit to Germany. But German Chancellor Angela Merkel quickly made her feelings on the subject known. Asked about Putin's editorial at a press conference yesterday she said she would have to "pour cold water" on the idea when she meets with Mr. Putin, though she said an EU-Russia free trade zone is a possibility.

The idea of a pan-European free trade zone, similar to the North American Free Trade Agreement (NAFTA) struck in the 1990's, has been floated for some time. But Putin's editorial seems to go further than this. "We propose the creation of a harmonious economic community stretching from Lisbon to Vladivostok," he wrote. "The result would be a unified continental market with a capacity worth trillions of euros." He said "the global economic crisis has revealed both Russia and the EU to be economically very vulnerable," adding that Russia is too dependent on its oil and gas exports while the EU is too dependant on imports, and the EU has lost its competitive edge because of de-industrialisation. Linking the two economies, Putin wrote, could solve problems on both sides.

Merkel's reaction was sceptical, noting that the words do not seem to be reflected in Russian policy. "The steps that Russia has taken recently do not point in that direction," she said at the press conference. She was likely alluding to Russia's withdrawal of its application to join the World Trade Organisation under Putin's leadership as he attempted to establish a "post-Soviet" Eurasian customs union with Kazakhstan and Belarus. And of course there are other reasons for Merkel and the EU as a whole to doubt Putin's sincerity when he writes that "In recent years, cooperation on energy issues between Russia and the EU has attracted much attention and, to be honest, has been much too politicized." This from a man who has been repeatedly criticised by the EU for using oil and gas as a weapon against neighbouring states that attempt to diverge from the Russian yoke. Such was the case in the winter of 2009 when Russia turned off its gas pipeline to Ukraine in a political dispute with that country, thousands of EU homes without heat, mostly in Bulgaria and Slovakia.

But relations between the EU and Russia have thawed since those icy days in January 2009. Having abandoned its failed project to create a "post-soviet" free trade zone, Russia has re-launched its bid to join the WTO. On Wednesday Russia and the EU reached an agreement to eliminate tariffs on raw materials such as wood, an important prerequisite for the EU to support Russia's bid. So now that relations are thawing again, and Putin appears to be offering an olive branch to his Western neighbours, has a new era in EU-Russian relations begun? In the short term, talks on ending visa requirements for travelling between Russia and EU member states seem to be progressing again, which would be a big step. But in his editorial Putin urged Russo-EU talks to "think 20, 30, even 50 years into the future." Is it conceivable that in 30 years, Russia could be in a free trade zone with the EU, or even in a common market? In 50 years, could it be part of the EU itself?

The latter suggestion seems extraordinarily unlikely. Russia may be partly on the European continent but its history and its size have always made it a world apart from the rest of Europe. At 142 million, Russia has a population almost 1/3 the size of the entire EU and is more than twice the size of the largest member state (Germany). Geographically, Russia is four times the size of the EU. It's an impossible idea to think the EU could take that on. As long as the EU remains a quasi-federal entity with a economic and political dimension, Russia will never be an EU member state.

But what about an EU-Russia common market? The wording Putin has chosen in his editorial is curious because a common market implies something much deeper than a free trade zone. If the EU were to establish a very involved free trade zone or even some kind of larger common market with Russia, would that undercut the importance and purpose of the EU itself? After all, there are those in the EU (many British conservatives for example) who want the EU to have less of a political dimension and be essentially only a free trade zone. Federalists often worry that when there is talk of expanding the EU or its common market out to large neighbouring countries it is in fact an effort to dilute the EU itself into just a free trade zone. After all, a pan-European free trade zone that encompasses the current EU states plus Turkey and Russia is perfectly conceivable. But a European Union with a political aspect (a parliament, binding legislation, etc) encompassing these states? It's harder to fathom that working successfully. There is always the risk that the extension of just the 'common market' or free trade aspect of the EU to neighboring large states would be a slippery slope to downgrading the whole union to the level of only a free trade zone.

The EU-Russia relationship is always an interesting one to watch. There is plenty of historical animosity there, particularly between the new Eastern European EU states and Russia. But Russia is an unavoidable presence on the European stage, as was proven during the 2009 gas crisis. There are many outstanding issues that the two 'federations' need to work out between each other, a notable one being what to do about the Russian exclave of Kaliningrad that is now completely surrounded by the EU. Energy remains a huge issue between the two, as does cooperation in the Baltic Sea. This new outstretched arm from the Russians, however suspect it may be, may be a sign that those tricky issues are closer to being resolved.

No comments: