How to Tempt Russia's Modernizers

The article first appeared in OpenDemocracy.


As European Union and Russian leaders meet tomorrow, Tuesday, for a bilateral summit, they find their checkered relationship in the midst of yet another reversal. After the early post-Soviet chaos and the belligerent posture under President Vladimir Putin, the buzzword these days is modernization.

In June this year, the EU and Russia launched a “Partnership for Modernization”, aimed at “advancing economies” and “bringing citizens closer together”. At the summit this week, Russia is set to receive European backing on a prize that has eluded Moscow for almost two decades: membership in the World Trade Organization, which is now in sight for 2011.

Beneath the headlines, however, Europeans have good reasons to be cautious about Russia’s modernization. At home, President Dmitry Medvedev’s many fine sounding words have not materialized into much action. Attempts at economic reform have largely been limited to the launch of much maligned “innovation projects".

The problem may well be that Medvedev’s liberal agenda lacks a power base beyond his loyal inner circle. Medvedev is widely regarded as the junior partner of a political partnership with Prime Minister Putin. The economic crisis has also to a certain extent worked against him, strengthening the more hard-nosed segments of the Russian ruling elite, together with their fondness for state capitalism. The populist tone of Medvedev’s state-of-the nation address last week would appear to confirm the weakness of his position.

There is no denying, however, that the Westpolitik of the Medvedev-Putin ‘tandem’ represents a more nuanced balancing act. The reset with the United States is real and has resulted in a more cooperative posture with Washington on a whole range of issues from Iran to Afghanistan. Russia has now agreed to cooperate, albeit somewhat grudgingly, on the missile defense shield in Europe.

Moscow has also reconciled with some of its European neighbors, most notably Poland. Just a few days ago, the Russian Duma voted a bill acknowledging Stalin’s responsibilities in the 1940 massacre of some 20,000 Polish officers in Katyn.

In truth, then, Europe has failed to grasp the foreign policy potential of Russia’s modernization. Ill-conceived as it may have been, Medvedev’s call for a new security architecture in Europe was motivated by the inadequacy of existing frameworks. Yet the Europeans referred the Russian proposal to the OSCE—one of the very frameworks that need reform—and in so doing effectively brushed it aside. Moreover, despite the prospective green light on the WTO, German Chancellor Angela Merkel rejected recent suggestions for a free trade area between the EU and Russia.
"The EU remains Russia’s largest trade partner and the main importer of its hydrocarbons. No matter Moscow’s posture, this interdependence constitutes a huge leverage"

Despite such difficulties, however, the prospective WTO deal offers a very direct clue as to how Brussels can and should pursue broader objectives in its Russia policy.

Back in 2004, the EU gave a resolute push to Russia’s WTO membership through another bilateral deal in which, among other things, dropped demands the liberalization of Russia’s gas monopoly, Gazprom. A surprising development followed a couple of months later, when Russia — after a period of long opposition — unexpectedly ratified the Kyoto Protocol on climate change. Russia’s ratification was decisive in obtaining quorum for the treaty. In other words, in exchange for a European concession on trade, Moscow made a significant contribution to one of Europe’s key foreign policy priorities.

This kind of log-rolling between unconnected issues can be replicated to advance relations in a whole host of dossiers: from climate negotiations, which are again in a quandary, to more contentious aspects of energy cooperation. This, at least is what EU officials privately hope.
Clearly, the “Europeanization” of Russia — assuming it ever started — is now long over. At the same time, the EU remains Russia’s largest trade partner and the main importer of its hydrocarbons. No matter Moscow’s posture, this interdependence constitutes a huge leverage.

The EU can do business with Russia without selling short the values upon which it was founded. Pragmatism is what the Kremlin has always demanded of Brussels. And it is only with a heavy dose of pragmatism, that Europe can hope to entice Russia to some of its cherished goals.