2013: A sink or swim year for the Eurasian Union?

Photo : World Economic Forum. Vladimir Putin, Prime Minister of the Russian Federation captured during the ’Opening Plenary of the World Economic Forum Annual Meeting

A recent article in The New York Times titled “Dealing With the Real Putin” claimed that Russian President Vladimir Putin is primarily focused on internally strengthening Russia.

While Putin’s annual message to the Federal Assembly in December had a strong focus on domestic, internal issues, I believe it would be naive to think Putin is no longer interested in “foreign policy adventures,” as the writers state.

Today, EU-Russian relations are going through somewhat rocky patches, with the two unable to see eye-to-eye on a number of different topics. On the one hand, EU-Russian relations have been plighted by disputes over several issues that have had a negative impact on the negotiations for a new, enhanced agreement. Meanwhile, on the other side of the Atlantic, US President Barack Obama is now talking about “resetting” the “reset” on relations with Russia. Differences in opinion on Syria, Iran and other global issues continue to cause tensions.

In fact, 2013 seems set to be an important year for Russia in terms of its efforts to tighten links, both politically and economically, between itself and the states of the former Soviet Union, the neighborhood in which Moscow likes to believe it has a right to special influence. Yet, with the rise of China and interest in former Soviet states from other players such as the US, the EU, India and even Turkey, Russia is increasingly finding itself having to elbow others out of the way.

Armenia, Azerbaijan, Georgia, Moldova and Ukraine are negotiating Association Agreements and Deep and Comprehensive Free Trade Agreements (DCFTAs) with the EU. While these agreements do not offer prospective EU membership — although some of these states would very much welcome that — they will bring about much greater levels of political and economic association and integration between the EU and the partner state.

As an “alternative,” Russia came up with its own integration project: the Eurasian Union. Unfortunately, the Eurasian Union has not generated a great deal of excitement, even though Russia has actively highlighted the short-term economic benefits, including cheaper gas, when underlining that the EU’s DCFTAs offer no short-term benefits. Yet, these states seem savvy enough to realize that the principal benefactor would be Russia and are therefore prepared to go the long haul with the EU, which will eventually bring them much bigger economic gains, including economic integration into the world market.

Indeed, 2013 could prove to be a sink or swim year for the Eurasian Union, not least because Association Agreement and DCFTA negotiations with Armenia, Georgia, Moldova and Ukraine are on track to be finalized, and, in the case of Ukraine, possibly signed. Once these agreements are signed and implemented, it would be impossible for these countries to also join a Russian economic area.

Ukraine is at the core of the battle. Kiev is the most important country in this region and is therefore key to the success of either the EU’s Eastern Partnership policy or the Eurasian Union. While Ukraine has initialed the agreements with the EU, signatures have remained elusive due to democratic backtracking and a lack of reform efforts in the country. The EU has now laid out a number of criteria for Ukraine to meet ahead of the Vilnius Eastern Partnership Summit in November. Russia has been actively lobbying various areas of influence in Ukraine, but Ukrainian leadership has not yet cracked.

The South Caucasus will also be a stage for Russia in 2013. Many interesting events will take place there: All three countries will have presidential elections and make important decisions on energy projects for Azerbaijan’s Shah Deniz II gas field, and Georgian Prime Minister Bidzina Ivanishvili may face difficult choices in trying to mend fences with Russia while maintaining Euro-Atlantic integration as a priority and simultaneously holding together his Georgian Dream coalition, which looks increasingly shaky. Moscow, which has increasingly discovered soft power, will have ample opportunity to try to influence developments.

While Moscow’s efforts to reassert itself go against the tide, it is not ready to give up on the idea of creating a bloc of Russian-dominated countries between the EU and China, no matter how unlikely that seems.

Amanda Paul is Policy Analyst and Programme Executive at EPC

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