The Russian challenge

by Katinka Barysch

Published in Yale Global, 3 October 2008

The US and Europe increasingly seem at odds over an assertive Russia, flush with oil money, strong militarily and ambitious with an educated, nationalistic population. This two-part YaleGlobal series explores the implications for Europe, the US and the world. In the first of the series, Katinka Barysch, deputy director of the European Centre for Reform notes many common interests held by the US, Russia and Europe. Because of geographical proximity and ample trade relations, Europe tends to be cautious in its approach with Russia, Europe’s reliance on negotiations and a tough approach from the US complement each other. Barysch points out that transatlantic unity is essential in trade, NATO and global governance. Europe is realistic about aggression in its neighborhood, moving carefully because the costs of conflict would be immense. – YaleGlobal

The American response to Russia's invasion of Georgia was swift, tough and coherent. Europe's reaction, on the other hand, seemed dithering and divided. This general impression left some observers to predict a transatlantic split between US cold warriors and European appeasers. Fears of a transatlantic falling-out are exaggerated but Washington, Brussels and the other European capitals need to align their strategies how to deal with a more assertive Russia.

It’s true that some US officials made more hawkish statements in the aftermath of the Georgia war. "Today, we are all Georgians," proclaimed Senator John McCain in Tbilisi. Secretary of State Condoleezza Rica warned that Russia could be on a "one-way path to self-imposed isolation and international irrelevance," putting the country's applications for the World Trade Organization and the Organization for Economic Cooperation and Development on hold. In Europe, meanwhile, Italian and German political leaders pleaded for continued engagement with Russia.

But many moderate, or realist, voices emerge in the US. And extremely critical statements come out of Poland, Estonia, Sweden, the UK and other European countries. Because the EU consists of 27 sovereign countries, its internal divisions are much more visible than those between, say, the US State Department and the White House.

More importantly, those who compare the immediate US reaction with the European one miss the point. The US administration has openly backed Tbilisi. The EU has been more reluctant to take sides. After the August invasion, this caution paid off because the EU – through current President Nicolas Sarkozy – could offer to serve as mediator. Backed by an angrily growling America, the EU's mediating role was all the more effective. The Americans found it easier to be firm and critical because they could rely on the EU to do the negotiating.

Nevertheless, there’s scope for a transatlantic rift over Russia – especially if Moscow's attempt to tighten its grip on the neighborhood does not stop at the border of South Ossetia and if the more hawkish McCain wins the election.

With a relationship so much more intertwined, Europe’s approach to Russia will always differ from the American one. The US does not trade much with Russia and has limited direct dealings. US-Russia relations are arms-length and strategic. The EU gets more than 40 percent of its gas and a third of its oil imports from Russia. For Russia, the EU is by far the biggest and most lucrative market. There are 2,000 kilometers of common border and a potentially explosive shared neighborhood. Russia's elite has businesses in Germany, holiday homes in France and offspring in English schools. The Europe-Russia relationship is immediate, multi-faceted and messy.

Therefore, if tensions between Russia and the West continue to deteriorate, the Europeans and the Americans would react differently. The US response would be fast and focused on its military strength in Eurasia. The EU would struggle to maintain unity, although it did a good job at its September 1 emergency summit on Georgia. Its focus would be on reducing dependence on Russian energy, drawing Ukraine, Moldova and other eastern neighbors closer to the EU, and putting the European operations of Gazprom and other state-owned Russian companies under greater scrutiny.

Nevertheless, there are areas where transatlantic unity is needed in face of a more aggressive Russia, including trade, NATO and global governance.

Trade: The EU has not threatened to block Russia's WTO accession. It has a strong interest in getting Russia to respect international trade rules and submit to the WTO's dispute settlement procedures. It is rightly reluctant to use an already weakened WTO to make a political point. Moreover, blocking the negotiations would have little immediate consequences: Russia's accession is in any case some time off because of Moscow's increasingly erratic trade policy, US refusal to repeal the Jackson-Vanik amendment and vetoes from WTO members Georgia and, possibly, Ukraine.

Going beyond that, economic sanctions are almost a non-starter for the Europeans. The EU is in no position to replace Russian energy supplies in the foreseeable future. Fully aware that this dependence is mutual, Moscow has been notably careful not to mention energy in its angry exchanges with the West. The EU could try to limit Russian sales of non-energy goods or keep Russian investments out. But in the absence of a UN mandate, such steps would violate the EU's own rules for openness and non-discrimination. Most Europeans think that the more integrated Russia is into the international economy, the less likely it is to turn into an angry and isolated autocracy.

NATO: For numerous Americans, the Georgia war is good reason to get Georgia and Ukraine into NATO as quickly as possible. Most Europeans are not so sure. Some fear upsetting Russia. But most point to the distinct lack of enthusiasm that most Ukrainian voters and politicians exhibit towards joining the alliance. And they worry about sending soldiers to defend a country led by someone as hot-headed as Mikhail Sakaashvili. Central and Eastern European countries have traditionally been strong supporters of further NATO expansion. Now they worry that the resolve behind Article 5 may become diluted. Poland and others already call for "Article 5 plus" guarantees from the US.

Some Europeans are more sympathetic to the idea of a pan-European security forum – not in the form proposed by Russian President Dmitri Medvedev, a fairly crude attempt to split Europe from the US. But some kind of dialogue will be needed, on issues such a new arms limitation treaties, Eastern Europe's other “frozen” conflicts – Transdnistria, Nagorno-Karabakh, perhaps Crimea – the Balkans and the Black Sea region, or the risks attached to militarization of the Caucasus. A strong push for Ukrainian and Georgian NATO membership at the December summit would make Russia recoil from any such dialogue.

International organizations: Long before the Georgia war, Senator McCain advocated throwing Russia out of the G8. The idea chimes with his plan for a League of Democracies, and it makes Europeans queasy. They hope that Russia will satisfy its craving for international respect through membership in global clubs rather than flexing military muscle. Most Europeans are also convinced that the world's most pressing problems – climate change, terrorism, the proliferation of nuclear weapons – must be addressed by all countries working together, not only those that practice democratic pluralism and liberal capitalism. Many would therefore support expansion of the G8 to include China, India, Brazil, South Africa and maybe others. If the current G7 members pushed for this expansion while at the same time sidelining Russia, Moscow would take note.

Europeans have no illusions about the nature of the Russian regime. The share of those worried about Russia's authoritarianism and its use of the energy weapon is higher in Germany than it is in the US, according to the latest Transatlantic Trends survey. But the Europeans often draw different conclusions from the same analysis because the costs of a breakdown in relations between Russia and the West would be so much higher.

Katinka Barysch is deputy director of the Centre for European Reform in London.

Centre for European Reform © CER 2008