Russians angry at still being left in the cold

Date: 23/01/1997

BORIS Yeltsin's pneumonia may cause the EU-Russia summit scheduled for next month to be delayed for the second time in succession but, according to Moscow, the European Union can hardly blame it for the lack of progress in bilateral relations.

When they signed the 'action plan' for Russia last May, EU foreign ministers said they looked forward to strengthening ties from commercial to cultural between the two sides.

In a thinly veiled attempt to assist Yeltsin to hold on to the Russian presidency, they promised to help develop trade links, modernise the country's manufacturing sectors, fight organised crime and work together on disarmament and arms sales.

Yeltsin won the election, but nearly all those initiatives have been put on hold.

Union officials blame the president's feeble grip on government, saying negotiations particularly on sensitive subjects are next to impossible.

Russian officials tell the story differently. Since the action plan was signed, they say, “practically nothing” has been forthcoming from the Union. In nearly every field, Russians are feeling let down by promises of cooperation (not to say funding) which have not materialised.

The action plan itself does not inspire Muscovites. One diplomat described it as a “unilateral paper of the Union, drafted and adopted without any discussion or exchange of opinions with the Russian side”.

He added: “We consider that it would be reasonable, now, to conduct a bilateral dialogue to look at the plan and work out the priorities together, to find specific measures that are possible for both sides.”

That dialogue has begun “to some extent”, he said, citing a few meetings of political directors. “We hope that the vision of dialogue will be realised at the upcoming summit,” he added.

The gap between words and actions on the EU side is all the more galling to Russians because the 18-month-old Partnership and Cooperation Agreement (PCA) which governs bilateral relations and, more importantly, gives Russia some trade advantages is still not in force.

Moscow has ratified the PCA; both houses of the Russian parliament approved it in November and President Yeltsin signed it into law within days. But France, Germany and Belgium have yet to seal the process with ratification in their national legislatures.

“We have promises that it will come very soon,” said the Russian diplomat.

But even the most optimistic Union calendar shows the PCA being applied in the second half of this year, and on a provisional basis only, because Austria, Finland and Sweden were not EU members when the accord was negotiated and so need an additional protocol.

“It is really disappointing, because we have kept our part of the bargain,” said the diplomat.

As the Union charges ahead with accords for countries around the world, Moscow believes it is being treated as a second-class citizen by the EU.

The PCA may offer a full menu of improved ties, but it lacks a key ingredient: it does not make Russia an 'associated' country to the Union. That single word may seem insignificant, but its absence means the country is barred from a variety of political and financial advantages.

It may not, for instance, receive funding from the European Investment Bank. That jackpot is reserved for the countries of central and eastern Europe closely allied with the Union, and also for the North African and Middle Eastern nations which have 'association agreements'.

Russians are miffed that their only financial link with the Union is through the Tacis, or technical assistance, programme for the former Soviet republics. The EU gave the country 631 million ecu worth of Tacis funding from 1990 to 1994. “Tacis programmes are very significant, but they are not financial assistance,” said a Russian official.

The 1997 Tacis budget has not yet been agreed, but when it is decided at the end of this month, the foregone conclusion is that it will not be enough.

Financially, Russia needs a huge dose of medicine.

During Yeltsin's first term of office, gross domestic product fell by 50&percent;, unemployment grew, spiralling inflation swallowed citizens' savings, and the chasm between the haves and the have-nots widened.

Political analysts say a major factor in Yeltsin's election victory last summer was that he finally produced the money for long-unpaid wages and pensions during the campaign, and even gave away cash and gifts.

EU officials should be aware that they might have to step up financial and economic assistance to keep Yeltsin or at least Yeltsin's party in power.

While Moscow says it is not seeking hand-outs to help its balance of payments or current accounts, it makes no secret about wanting a better deal in Europe for its financiers.

“There is a lack of cooperation in banking,” said an official, explaining that Russian banks have only a limited presence in Europe because they have such limited rights here.

Russians are courting Germany, their long-time supporter, in the hope that the situation will improve.

Alexander Lebed, the ousted national security adviser with relentless presidential ambitions, selected Germany last week as the destination for only his third-ever foreign trip, and devoted part of it to meeting German industrialists.

If Yeltsin's health continues to decline, Lebed will become a major concern for the EU.

Chancellor Helmut Kohl and President Roman Herzog declined to meet him on his German tour, and EU officials say they have no dialogue with the man who claims he will win the next Russian elections.

Officially, at least, the Union still has all its eggs in Yeltsin's basket, despite the growing power of regional leaders and even warlords in Russia.

The EU policy of staying out of Russia's internal politics revealed its biggest moral flaw during the separatist fighting in Chechnya. The Union was criticised for signing the PCA even as Russia was killing civilians in the breakaway republic.

Tacis officials hint that they registered “less than approval” with their colleagues at the Council of Europe before it decided to admit Russia as a member a year ago.

Although Dutch, German, British, Belgian, Italian, Swedish and Luxembourgish parliamentarians registered a 'no' when the Council voted on Moscow's application, the EU never stood as a group against it.

But as long as Russia can hold on to the semblance of democracy, the Union dare not rock the boat.

EU officials are happy to see that Communist leader Gennady Zyuganov has been steering his hard-line, left-wing party towards the centre. He supported Premier Victor Chernomyrdin a Union favourite in his bid for the job.

No one thinks Zyuganov actually believes in his new, moderate incarnation, but as long as he feels the pressure to portray himself in this light, the EU should be happy.

Assuming that the EU-Russia summit goes ahead as planned in The Hague on 4 February (it has not yet been cancelled, despite Yeltsin's prolonged stay in hospital), Chernomyrdin will probably attend.

If he does, current Union President-in-Office Wim Kok can be expected to give him a warm welcome, even if EU diplomats do not yet dare tell him they hope he will fill Yeltsin's shoes when the president has gone.