Russia and the EU have chosen peaceful coexistence over confrontation. Moscow has softened its tone with regard to some opponents in Europe and Brussels has shifted its position on last year's war in the Caucasus. The two sides seem to be ready to back their words with deeds. Guide has learned that Moscow and Brussels may sign a partnership and cooperation agreement as early as 2010. If that happens, their relations will be at least as cloudless as before the Caucasus War.
Meeting each other half way
The new European Union members from Eastern Europe were Russia's harshest critics from the start. The Baltic countries demanded from Russia, the legal successor to the USSR, compensation for the "Soviet occupation," while Poland, the Czech Republic and Hungary said they wanted at least apologies for the same period. All of them constantly criticised Russia for lack of democracy and imperial ambitions. The rhetoric as a rule prompted a sharp reaction from Moscow.
However, relations with the relative newcomers to the EU began to improve after Dali Gribauskaite was elected President of Lithuania. The Russian President Dmitry Medvedev personally called Gribauskaite to congratulate her on her election. The Kremlin Press Service reported that during the conversation the two sides said they were ready to move towards a new stage in bilateral relations "on the basis of constructive cooperation." The presidents also agreed to be in permanent contact to solve all problem issues. This was the first official telephone conversation between the Lithuanian and Russian leaders in the last eight years.
Before long, Gribauskaite called Moscow. True, the occasion was not exactly joyous: the Federal Veterinary and Phytosanitary Supervision Service (Rosselkhoznadzor) had warned Vilnius that it would introduce restrictions on the import of Lithuanian dairy products as of August 17 because they contained antibiotics. The "dairy conflict" was soon settled. In late October, after talks in Moscow between Foreign Ministers Sergey Lavrov and Vygaudas Usackas, the two sides said with one voice that it was necessary "to form a positive agenda of relations, prevent unfriendly rhetoric and politicisation of aspects of cooperation".
The mission of settling all the problems with another difficult EU member, Poland, was undertaken by Russian Prime Minister Vladimir Putin. The relations between Moscow and Warsaw soured in late 2004 when Polish President Alexander Kwasniewski took an active part in the "orange revolution" in Ukraine that brought Viktor Yushchenko to power. The conflict reached its peak in 2006 when Russia decided to punish Poland for its "intransigence" by banning the import of Polish meat and Warsaw retaliated by vetoing the Russia-EU negotiations on a new basic agreement.
This year Russian-Polish relations appear to be warming. On September 1, Vladimir Putin visited Poland for the first time in four years to attend a ceremony to mark the 70th anniversary of the start of the Second World War together with other European leaders. On the eve of his visit the Russian prime minister published an article in the Polish newspaper Gazeta Wyborcza which many observers described as a milestone. Putin openly wrote about some unpleasant incidents which had for decades complicated the relations between the two countries: the Molotov-Ribbentrop Pact and the Katyn massacre of Polish officers.
Vladimir Putin described the Molotov-Ribbentrop Pact as immoral and linked the tragic Katyn episode with similar grim episodes that were taking place in the Soviet Union at the time. "The people of Russia, whose fate has been mangled by the totalitarian regime, can well understand the sensitivities of the Poles connected with Katyn where thousands of Polish servicemen are buried," the Russian prime minister declared, but said in the same breath that the Katyn and Mednoye memorials, just like the tragic fate of the Russian soldiers taken prisoner by the Poles in the 1920 war, must become symbols of our common grief and mutual forgiveness." "A new constructive logic is manifesting itself in the Russian-Polish relations today," Vladimir Putin wrote.
Just like in the situation with Lithuania, Moscow tries to link the improvement of relations with Poland with the strengthening of its links with the EU. The prime minister expressed hope that sooner or later a high-level partnership between Russia and Poland would be achieved in the interests of the two peoples and the whole European continent.
The Russian prime minister's statements were not unanimously approved in Poland. Nevertheless, most experts felt that there were signs of a positive shift in bilateral relations, which had been steadily worsening in previous years because of trade and energy wars as well as spy and diplomatic scandals.
True, November saw an incident that nearly derailed the process of reconciliation between Moscow and Warsaw. Speaking in Washington, the Polish Foreign Minister Radoslaw Sikorsky unexpectedly made a strong "anti-Russian" statement and asked the United States to send its troops to his country to ward off possible Russian aggression.
The attack raised eyebrows in Moscow. Sikorsky's Russian counterpart, Sergey Lavrov, even questioned that the Polish minister had actually said what the news agencies reported. "I know Sikorsky, he has always struck me as a person who has experience and who understands the ongoing processes," Lavrov said. "So, before commenting on these remarks I would like to make sure that he has actually made them." In Poland, some experts questioned the rationale of Sikorsky's quest for American military assistance. For example, Polish MP Tadeusz Iwinski suggested in an interview with Kommersant that Sikorsky's remarks were "a not very well thought out improvisation." Later the Polish Foreign Ministry declared that the minister's words had been misinterpreted by journalists - Russian journalists - and demanded a disclaimer.
Assistance from overseas
Special thanks for the improvement of relations between Russia and the European Union are due to the US Administration. In September, President Barack Obama removed the main irritant in Russian-European relations by announcing that the plans to deploy elements of an American anti-missile defence system in Eastern Europe would be revised.
Approaching the ideas of his predecessor George Bush Jr. in a creative way, President Obama dumped the plans for building a radar station in the Czech Republic and an anti-missile base in Poland. Although this turn of events caused a barrage of criticism from Prague and Warsaw, Moscow saw it as a way out of an unpleasant situation for all involved. This was indirectly confirmed by the October visit of the Czech President Vaclav Klaus to Moscow, when more than $1 billion worth of contracts were signed between Russia and the Czech Republic.
Against the generally calm background the strained relations between Russia and Sweden, current president of the EU, strike a note of discord. Moscow is vexed by Stockholm's unremitting criticism of the human rights situation in Russia. Moscow has not forgotten that a year ago Swedish Foreign Minister Karl Bildt was one of the first to describe the events in South Ossetia as an aggression against Georgia, and was sharply critical of the Russian military actions in that country. Sweden advocated the toughest sanctions against Moscow.
Stockholm was one of the initiators of the EU's Eastern Neighbourhood programme that would allocate 350 million euros to six former Soviet republics until 2013 on certain conditions. Moscow sees this as an anti-Russian initiative.
So great was Moscow's resentment of Stockholm's actions that the Kremlin seriously considered not taking part in the Russia-EU Summit traditionally hosted by the country which holds the European Union presidency. Russia said the forum should be moved to what it considered to be neutral Brussels. It was not until late October that Moscow made the "difficult choice" to follow the EU's appeals not to break the European tradition. "Moscow was not sure that the summit would be constructive," the Russian president's aide Sergey Prikhodko said. "The Swedish Foreign Ministry's remarks have not always been correct." In early November, however, Sweden sent a clear promising signal to Moscow by allowing the construction of Nord Stream in its economic zone under the Baltic Sea.
The echo of war
Moscow should not have all the credit for the improvement of the relations between Russia and the European Union.
Brussels decided to play the same game and to soft-pedal on problems connected with Russia. The desire to avoid problems and normalise the relations with Russia was so great that the Europeans even changed some of their views on last year's conflict in South Ossetia.
A year ago it seemed that the August 2008 war with Georgia would tarnish relations between Russia and the European Union for a long time. Last autumn the EU seriously discussed sanctions against Moscow. The only disagreement concerned the severity of the punishment of the Russian Federation "for its aggression against Georgia." In December last year the EU set up a fact-finding commission to work out a common assessment of the conflict. Moscow expected the worst results.
However, the report of the commission headed by Heidi Tagliavini, which was made public in late September, came as a pleasant surprise for Russia. The key conclusion was that it was Georgia that had started hostilities. "The shelling of Tskhinvali by the Georgian armed forces during the night of 7 to 8 August 2008 marked the beginning of the large-scale armed conflict," the report says. Moreover, the commission declared that the Georgian claims that Russia had started a full-scale military invasion of South Ossetia before August 8 were not substantiated.
Thus the report overturned the main argument that Tbilisi used to justify its attack on South Ossetia. "It is not possible to accept that the shelling of Tskhinvali with GRAD multiple rocket launchers would justify the requirements of having been necessary and proportionate in order to defend those villages. It follows from the illegal character of the Georgian military assault that South Ossetian defensive action in response did conform to international law in terms of legitimate self-defence," the Tagliavini commission concluded.
Moreover, EU experts described as illegal the attack of the Georgian troops on Russian peacekeepers, describing the actions of the Russian side to repel the attack as legitimate self-defence.
Moscow did not conceal its satisfaction with the EU Commission's findings. "Who was the first to start? The report gives an unequivocal answer to that question. It was the attack of the Georgian forces, on Saakashvili's orders, on Tskhinvali on the night of August 7 to 8 that marked the start of hostilities," said Vladimir Chizhov, Russia's representative to the EU. "The efforts of the EU commission have not been in vain: any thinking person will arrive at the conclusion that the aggression against South Ossetia was unleashed by the current Georgian leadership. At the end of the day this is the main result of the work of the Tagliavini Commission," the Russian Foreign Ministry declared.
Other findings of the Commission were downplayed in Russia. Although the report says unequivocally that Russia's claim about the humanitarian character of its intervention is unacceptable ("Russia has objected to any justification for the NATO Kosovo intervention as a humanitarian intervention. It can therefore not rely on this putative title to justify its own intervention on Georgian territory"). The Commission challenged the claim that the Russian troops were protecting Russian citizens in South Ossetia. In the Commission's opinion, although that problem is not treated in international law, the actions to protect citizens should be limited to ensuring their security or evacuation. "In the case at hand the action was not solely or exclusively focused on rescuing and evacuating Russian citizens, but largely surpassed this threshold by embarking upon extended military operations over large parts of Georgia. Consequently, the Russian military action outside South Ossetia was essentially conducted in violation of international law," the report says. The Russian side described these findings as "drawbacks" which could not "overshadow the main conclusion, i.e. that Tbilisi is to blame for the aggression against peaceful South Ossetia and Georgian actions were totally illegitimate."
Brussels tried to moderate Moscow's joy over the Tagliavini Commission findings. "The document is not a report on behalf of the EU, a source in the European Commission told Kommersant. It has been ordered by the European Commission and it has no legal force." However, our source had to admit that "the EU will be guided by the findings of the report in determining its line on last year's conflict and its aftermath." Moscow chose to regard that as its achievement too.
Meanwhile, as Guide has found out, Moscow and Brussels intend to move on from friendly signals to each other to practical steps. Guide's sources at the Russian President's Administration and the Russian Foreign Ministry indicate that as early as 2010 the long-awaited Partnership and Cooperation Agreement which the parties have struggled to sign over the past several years will finally be signed. "The delay was connected with the reform of the EU and the uncertainty over the Lisbon Treaty, a high-ranking Russian diplomat told Guide on condition of anonymity. We hope that after the reform of the EU the negotiating process will gather the necessary momentum. I do not rule out that we will be able to reach an agreement by next year."
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Direct speech
How Russian business feels in the EU
Viktor Vekselberg, Chairman of the Supervisory Board of the Renova Group of companies:
"The appearance of Russian capital in Europe, especially big Russian capital, causes surprise and an inadequate reaction. Along with trade barriers which of course exist to varying degrees, I think we do not always meet with a proper political reaction to various manifestations of the participation of Russian capital in major European companies."
(June 4, 2009, Petersburg International Economic Forum).
Vagit Alekperov, President of Lukoil:
"We wanted to expand in Poland, but we were turned down. From the beginning of our presence in Poland we have met with a negative approach to Russian business. That is why we decided not to have our processing operations here."
(October 14, 2009, interview with the Polish newspaper Dziennik Gazeta Prawna).
Dmitry Sterzhnev, Director-General of Evrokhim:
"There is one fundamental thing that is being used in our relations and that we think to be extremely negative and unfair, and that is the so-called ‘gas corrections mechanism', that's when European producers launch an anti-dumping investigation into energy-consuming goods or fertilizer. The mechanism being used is not quite correct in legal terms, in addition to being discriminatory."
(June 2009, Petersburg International Economic Forum)
Alexei Miller, CEO of OAO Gazprom:
"The signing of the declaration (on the modernisation of Ukraine's gas transportation system - Guide) behind Russia's back was a political mistake and it cannot be implemented without the gas supplier. The declaration challenges not only the spirit of cooperation in the framework of the January gas accords between Russia and Ukraine, but also the spirit of cooperation in the energy field between the European Union and Russia."
(April 3, 2009, in a meeting with the management of the companies E.ON, ENI and GDF Suez)
Vitaly Saveliev, Director General of Aeroflot- Russian Airlines:
"I see no prospects for Aeroflot going into Europe. Nobody would welcome Aeroflot there. European laws will not allow us there."
(September 16, 2009, Reuters interview).
Direct speech:
How European business fares in Russia
Antoine de Saint Affrique, Executive Vice President of the British Dutch Company Unilever:
"The biggest cause of concern is the new customs clearance rights and the tariff policy of the Russian Federation in the period of 2010-2011. It is a source of concern for investors like us because imports of raw materials will become more expensive. It will be more difficult to export from Russia."
(June 4, 2009, Petersburg International Economic Forum)
Tony Hayward, Chairman of the Board of the British Oil and Gas Company BP:
"BP's partnership with Russia is highly successful. But I have to say that of late we have seen the emergence of a new form of protectionism in the energy sector. It is often called ‘resource nationalism.' It seeks to bar foreign investments from government assets"
(June 4, 2009, Petersburg International Economic Forum).
Kari Jordan, head of the Finnish wood-working concern Metsaliitto:
"Timber trade came to a halt in practice after the customs duties were raised (from April 1, 2008 - Guide). Finland has to buy timber from South America. The closure of some enterprises in Finland has affected the Russian economy. You have thousands of idle jobs."
(October 25, 2009, the St Petersburg Forest Summit).
Gianni van Daalen, Regional Vice President of the German Hotel Network Kempinski in Russia:
"For us Russia is a European country. Business here is the same as in any other European city. The language barrier is a bit of a problem because many Russians do not speak foreign languages. The devaluation of the rouble is another problem."
(April 2009, interview with the journal of the European Business Association in Russia).
Bernard Meunier, Director-General of the Swiss Company Nestle in Russia:
"The main problems we face are characteristic not only of our sector, but of all the spheres, and that is understaffing. The second critical factor is national infrastructure, including delivery. All the ports, airports, roads and customs offices are full of goods. No major investment was made in these spheres for more than 30 years."
(June 2008, interview with the journal of the European Business Association in Russia).
Olga Berezintseva; Vladimir Solovyov