EU contemplates 'common market' with Russia

EurActiv
EU News
22 October 2008

French President and EU presidency holder Nicolas Sarkozy yesterday (21
October) unveiled a new cooperation strategy with Russia that would build
stronger economic links between Europe and its largest Eastern European
neighbour.



Background:



Relations with Russia are a divisive issue among the 27 EU members. At the EU
Council on 15-16 October, Italian Prime Minister Silvio Berlusconi went as far
as to consider Russia as a future member of the bloc, despite Moscow never
having expressed interest in joining. Moreover, France and Russia are developing
a strong relationship, both economically and politically ( onclick="javascript:urchinTracker('/Links/www_euractiv_com_en_enlargement_france-russia-business-booming-despite-georgia-crisis_article-175603');"
href="http://www.euractiv.com/en/enlargement/france-russia-business-booming-despite-georgia-crisis/article-175603"
target=_blank>EurActiv 22/09/08
onclick="javascript:urchinTracker('/Links/www_euractiv_com_en_enlargement_france-russia-tune-europe-security_article-176187');"
href="http://www.euractiv.com/en/enlargement/france-russia-tune-europe-security/article-176187"
target=_blank>EurActiv 09/10/08
). 


But the Georgia crisis set a number of EU countries against Moscow.
Poland, Estonia, Latvia, Lithuania, the Czech Republic, Sweden and the UK have
been pressing for sanctions against Russia. 


As a compromise, the extraordinary EU Council on the Georgia crisis on 1
September decided to freeze talks on a wide-ranging partnership and cooperation
agreement with Moscow in response to Russia's "unacceptable" military incursion
in Georgia, delaying possible further steps until a later date ( onclick="javascript:urchinTracker('/Links/www_euractiv_com_en_enlargement_eu-freezes-talks-russia-summit_article-175031');"
href="http://www.euractiv.com/en/enlargement/eu-freezes-talks-russia-summit/article-175031"
target=_blank>EurActiv 02/09/08
). 



Speaking in the European Parliament in Strasbourg, Sarkozy called Russia "our
neighbours" and surprised the audience by alluding to "a common economic space
between Russia and the EU". 


The term recalls the early stages of EU history, which saw the development of
a 'common market' that was subsequently renamed the 'single market' in the
1980s. 


Sarkozy's view of Russia sharing a common economic space marks another step
in his attempt to forge a new relationship with Moscow based on trust and
tighter integration. 


At a recent meeting in Evian, the French president and his Russian
counterpart Dmitry Medvedev voiced similar messages about the need to
reconstruct Europe's security architecture ( onclick="javascript:urchinTracker('/Links/www_euractiv_com_en_enlargement_france-russia-tune-europe-security_article-176187');"
href="http://www.euractiv.com/en/enlargement/france-russia-tune-europe-security/article-176187"
target=_blank>EurActiv 09/10/08
). 


"I don't see Russia as a determined rival to the European Union," Sarkozy
told the Parliament. "I think, on the contrary, that it would be necessary, in
the future, to lay the basis of a common economic space between Russia and the
EU, which will be, by the way, the best way to obtain from them that they get
closer to the values of respect for human rights and democracy which we share in
Europe." 


He added that Europe and Russia needed each other, with Russia possessing the
energy resources and Europe the technology that Moscow needs. 


Transatlantic tensions 


Without directly naming the United States, Sarkozy revealed that
"others" considered military options when the conflict in Georgia erupted
on 8 August, a solution which he described as "madness". 


"Some said, and had [their] reasons to say, that dialogue [with Russia] was
pointless and that the response to military aggression could be military
[response]. Madness!," said the French president. 


He also revealed that the US had opposed his visit to Moscow to broker the
ceasefire agreement on 12 August. "Despite everything, we played hand in hand
with our American friends […] And frankly, looking at the world today, I don't
think it needs a crisis between Europe and Russia. It would have been
irresponsible," Sarkozy said. 


Georgia's military action 'completely
inappropriate'
 


Contrasting the views of Poland, the Czech Republic, Estonia, Latvia,
Lithuania, Sweden and the UK, who tend to see the Georgia crisis primarily as an
aggression by Russia, Sarkozy presented a more nuanced view. He recommended
that "ideology schemes" be abandoned, calling the Russian reaction [to
the attack of South Ossetia capital by Georgian forces] "disproportionate", but
adding that it came as a response to "completely inappropriate action before
that". 


EU-Russia Treaty talks to proceed? 


Answering a question from Annemie Neyts-Uytterbroeck, a Belgian liberal MEP,
Sarkozy made no secret of his wish for EU-Russia talks on a wide-ranging
cooperation agreement to proceed, despite continuing tensions in
Georgia. 


"Russia stopped its tanks 40 km from [Georgian capital] Tbilisi as we asked
them. Russia withdrew its troops to positions before the 8 August crisis.
Russia allowed observers, including EU observers, to deploy. And Russia,
more or less willingly, goes to the Geneva negotiations. If with all this we
suspend the EU-Russia summit, who would understand anything of European policy?
Nobody," said Sarkozy. 


EU member states decided at a summit in September to make the start of the
talks conditional on Russian troop withdrawing completely from the positions
prior to the August invasion. 


Javier Solana, the EU's foreign policy chief, recently said he hoped a
decision to start the talks could be agreed before an EU-Russia summit on 14
November ( onclick="javascript:urchinTracker('/Links/www_euractiv_com_en_enlargement_eu-russia-pact-hold-georgia-talks-collapse_article-176445');"
href="http://www.euractiv.com/en/enlargement/eu-russia-pact-hold-georgia-talks-collapse/article-176445"
target=_blank>EurActiv 16/10/08
). 


Britain is said to reserve judgement over progress made in the Georgia
post-crisis settlement talks currently taking place in Geneva. 


Lithuania had recently raised objections to starting talks on the new
EU-Russia treaty, as the former Soviet Republic wants Russia to pull out more
troops from Georgia's breakaway regions of South Ossetia and Abkhazia. 


Russia kept some 2,500 soldiers in the two regions before the conflict, and
has now more than 7,000 in both territories, which it had recognised as
independent nations. 


But Sarkozy suggested that the decision to start the talks could be taken
without unanimous support from the 27 EU member states. 


"We took the decision not to suspend talks, but to postpone them.
Had we decided to suspend them, we would need a European Council decision by
unanimity to restart talks. I think this would have been politically
embarrassing. The decision to postpone allows us to continue the talks without
expressing any assessment," he explained.  


Positions:



EU External Relations Commissioner Benita Ferrero-Waldner
made a speech in the European Parliament on 21 October on EU-Russia relations,
recalling that the Commission was in charge of making an assessment of the EU's
self-interest in the relationship ahead of the EU-Russia summit. 


Ferrero-Waldner said economic and trade relations between the EU and Russia
were getting stronger, explaining that Russia was the EU's third most
important trading partner and growth rates were up to 20% per year.
Energy is a major factor, but there is impressive growth in services too,
she revealed. 


With its recent high growth rates and emerging middle class, Russia is an
important emerging market right on EU’s doorstep that offers opportunities,
notwithstanding the effects of the present financial crisis, Ferreo-Waldner
said. She added that the EU was a major investor in Russia, accounting for
80% of cumulative foreign investment, while a significant share of Russian
foreign reserves are in euro, making Russia one of the largest holders of
euro-denominated assets in the world. 


Polish MEP Janusz Onyszkiewicz, who is also rapporteur on
EU-Russia agreement, opposed Sarkozy's views on Russia: "We should remember that
there was a Russian incursion into Abkhazia at the time of the South Ossetia
invasion yet no one could claim that there was any kind of Georgian provocation
in Abkhazia to prompt this reaction from the Russians, as some might argue with
regards to South Ossetia. This is a clear indication of pre-meditated aggression
that the Russians have previously denied […] Medvedev talks of creating a new
common security area from Vancouver to Vladivostok. Yet we already have the
Charter of Paris. Why else would the Russians push for this other than to hold a
veto in this area?" 


Next steps:




  • 10 Nov.: GAERC (General Affairs and External Relations
    Council) to discuss relations with Russia. 
  • 14 Nov.: EU-Russia summit in Nice. 
  • 18 Nov.: Geneva talks on post-conflict settlement in
    Georgia to resume. 

 




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