The Eurasian Union: Competition or Partnership with the EU?

Not so long ago, in 2008, during a routine Bergedorf round table on “Europe’s East between Brussels and Moscow,” the Swedish diplomat and expert Anders Aslund suggested that Russia essentially has nothing to offer the former Soviet Republics in the area of integration because it does not belong to any significant defense or economic union.[1] That situation has recently changed—the Belarus-Kazakhstan-Russia Customs Union began functioning in 2010. The three countries should have a common economic space by January 1, 2012. And last summer, agreement was reached on the next stage: by 2013 the trilateral economic association will transform into the Eurasian Union—a highly integrated supranational association.

Vladimir Putin described the main features and prospects for the future Eurasian Union in an article entitled “A New Integration Project for Eurasia.” Considering Putin is by far the candidate most likely to win the upcoming presidential election, the article can be considered a policy statement regarding the priority given integration processes in the post-Soviet space for Russia’s foreign policy and economic actions in the coming years. That is actually how most observers see it, both in Russia and abroad.

The Eurasian Union can be a real alternative to the European integration plan for CIS countries, and it thus is a direct competitor to the EU’s Eastern Partnership (EP). But the development of integration processes in the post-Soviet space constitutes only part of the project—it proposes to cooperate with the European Union simultaneously, but on a global level, within the framework of Greater Europe. The question is, which of these two political scenarios will the EU prefer?

The main objective pursued by the European Union today as part of Eastern Partnership is “political association and economic integration” with partner countries. That, in fact, means the development of cooperation according to a formula proposed by Romano Prodi when the European Neighbourhood Policy (ENP) was in its formative stages—the idea of sharing “everything but institutions.” However, the EU has encountered several difficulties in achieving that goal. First, there was the “crisis of interest” among the partner countries, what the Hungarian analyst Attila Agh has called the “carrot crisis.”[2] Some of the countries participating in “Eastern Partnership” want to expand relations with the EU, but on equal terms and not as a target of a Europeanization policy. Others are actively seeking European integration and are willing to cooperate based on the principles and conditions put forward by Brussels, but they require clear confirmation of their prospects for accession to the EU as full-fledged members, which the EU cannot offer, at least at the current stage. Second, in expanding relations with countries in Eastern Europe and the Caucasus, the EU has to exercise extreme caution and limit its activities in order to avoid damaging its relations with Russia, which has been very wary of the Eastern Partnership from the outset. In addition, consensus is lacking within the EU on matters affecting implementation of the ENP. The rivalry between the eastern and southern areas of its neighborhood policy means that most decisions in this sphere are a compromise and are quite watered down.

It is here that the main weakness of the EU’s “Eastern policy” resides, not insufficient funding. The EU is quite capable of offering its partner countries adequate financial inflows in the form of loans and investments by accumulating funds from various sources, in addition to funds provided directly to implement the ENP and EP. But financial support alone cannot bind the partner countries to the EU. Political action is also needed, and stances taken both by the partner countries and Russia prevent that.

Despite EU’s statements that the Eastern Partnership is not directed against Russian interests, EU-Russia political relations in the post-Soviet space have already implicitly moved onto the geopolitical plane and begun to resemble a competition for influence. As Kristi Raik, an expert at the Finnish Institute of International Affairs, said in her recent paper, “The Eastern Partnership has always been as much about geopolitical interests (albeit not explicitly stated in the official rhetoric) as about the EU’s noble wish to build on the success of Eastern enlargement and spread democracy further to the East.” We might respond with a very simple argument—if the EU and Russia were not competing for influence in the post-Soviet space, there would be no reason for the already commonplace “policy of balance” that is being pursued by the individual partner countries in order to get as many trade preferences as possible from both sides.

Ukraine is the most obvious example of this competition. It had a choice of integration futures—either a free trade zone with the EU or a customs union with Russia, Belarus and Kazakhstan. The outcome remains unclear despite the fact that negotiations on an association agreement and a free trade zone with the EU are scheduled to wrap up in December.

The Eurasian Union project actually puts this competition between Russia and the EU in the open by acknowledging the existing political landscape. In fact, as noted above, the process had already begun with the establishment of the Customs Union. But the Customs Union is not in itself a full-fledged alternative to European integration. In fact, it can only compete with the free trade zone that the EU has offered to the partner countries. Obviously, the participants in the Eastern Partnership see the free trade zone agreement as only a small, initial, part of the European integration process. A full-fledged economic union, which the Eurasian Union should become, is a more serious project. It is intended for long-term development and is fully capable of competing with the attraction that the EU holds for integration by opposing its almost irrational appeal as a “space of peace and prosperity” with much more openness and real economic benefits in the foreseeable future.

However, it would be too superficial and essentially wrong to perceive the new integration project as being intended primarily to compete with the EU. Moreover, that reading would take us back to the logic of the Cold War, which is perhaps more understandable and familiar but, as political experience in recent years has shown, is totally counterproductive. The Eurasian Union project actually brings to the surface the ongoing “quiet” struggle of geopolitical interests in the post-Soviet space, but at the same time it offers the European Union a way out of what is virtually a stalemate. The current situation is complicated by the fact that neither side—neither the EU nor Russia—can abandon its interests in Eastern Europe, the Caucasus and Central Asia. Likewise, however, neither wants to exacerbate bilateral relations, which this conflict of interests may do sooner or later. That is the reason for the EU’s rhetoric about how the Eastern Partnership is not directed against Russia and the extremely cautious strategy for implementing the project that makes it look almost like a failure, and Russia’s seemingly indifferent reaction to the EU’s policy in the post-Soviet space. The new integration project is addressed to the EU no less than to the CIS countries. The absence of Russian intent to cut itself off or stand in opposition to anyone is strongly emphasized. On the contrary, the Eurasian Union should become part of a Greater Europe, which means maintaining Russia’s commitment to all its previous proposals for cooperation with the EU. The creation of a common economic space from Lisbon to Vladivostok for the EU can solve the problem that the EU took on in expediting the establishment of free economic zones with the Eastern Partnership countries, particularly that of market expansion, which is so necessary to the stalled European economy. Obviously, access to the new markets would be on terms less attractive to the EU because it would need to negotiate with a large supranational union rather than individual countries, most of which are economically rather weak; but the opportunities afforded could compensate for all of the benefits lost in the short term.

In his book “The Cold Friend: Why We Need Russia,” German Russia expert Alexander Rahr noted that each new Russian president began his term in office with an offer to cooperate with the West, but the West has always been skeptical.[3] If Putin is elected president, the Eurasian Union project can be considered a continuation of this tradition and another offer in the same vein. But his proposal is different because it is coming from a country that considers itself not only capable of dialogue as an equal but of competing successfully with the EU if necessary. This time the EU will find it more difficult to evade the issue because the Eurasian Union is no longer simply a plan but a project that is being implemented. And should it succeed, the EU will have to choose: either openly compete with Russia for influence in post-Soviet space, which would not benefit either side; or jointly seek opportunities for true cooperation and ways of creating a common economic space on the continent.

Vasily Fedortsev, Cand.Sc. (Politics), Senior Fellow of the Euro-Atlantic section of the Russian Institute for Strategic Studies.
1. Europas Osten zwischen Brüssel und Moskau. Bergedorfer Gesprächkreis 2009. Hamburg: Körber-Stiftung, 2010.

2. A. Agh. “Regionalisation as a Driving Force of EU Widening: Recovering from the EU ‘Carrot crisis’ in the ‘East,” Europe-Asia Studies, Vol. 62, No. 8, 2010.

3. A. Rahr. Der kalte Freund. Warum wir Russland brauchen. Die Insider-Analyse. Munich: Hanser, 2011.

Source: New Eastern Outlook

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