EU-Russia relations, May 2001

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Publication Date 19/05/2001
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The seventh EU-Russia Summit, following the entry into force of the Partnership and Co-operation Agreement in 1997, took place in Moscow on the 17 May 2001. The Summit was an opportunity for the two sides to reaffirm the importance of strengthening a long-term strategic partnership based upon the principles of democracy, respect for human rights, rule of law and the market economy. The Summit followed a meeting between President Putin and the Heads of State and Government of the European Union on the fringes of the European Council in Stockholm on 23 March 2001.

Background

In the 1950s and 1960s the old Soviet bloc roundly criticised the European integration process as an instrument of American capitalism and the European Community seen as the economic foundation for the development of NATO. There were regular predictions from the Soviet Union that the contradictions of capitalism would lead to the collapse of the EC. However, as the years passed, the realisation that the European integration process was advancing at a steady rate led to a reassessment.

Commentators interpreted a remark by President Brezhnev in 1972 on the realities of Europe as an implicit recognition that the EC was here to stay. In 1973 initial contacts took place between the EC and the Council for Mutual Economic Assistance (CMEA, sometimes called COMECON). These initial contacts led to nothing of substance as the two sides disagreed as to what should be achieved. The Soviet Union wanted a substantial EC-CMEA basic agreement, while the EC wanted only a framework agreement between the two organisations, and to negotiate detailed trade and co-operation agreements with the individual Member States of the CMEA.

It was only in the 1980s after the coming to power of President Gorbachev in the Soviet Union that serious exchanges began. One of the major factors in the growing rapprochement was the need for the Soviet Union, and also its Eastern bloc neighbours, to develop more extensive economic relations with the countries of EC to help their own struggling economies. In June 1988 a Joint Declaration was signed in Luxembourg between the EC and the CMEA marking a mutual formal recognition between the two organisations (Official Journal L157, 24.6.88, p35).

During the negotiations leading up to the Joint Declaration the European Commission had insisted that the EC should be allowed to develop relations with the individual countries of Eastern Europe. The CMEA countries accepted the policy of 'parallel normalisation' in 1986 and during the next two years parallel negotiations were conducted with a number of CMEA members. In June 1988 the Soviet Union (along with other Eastern bloc countries) announced the decision to accredit diplomatic missions to the Community.

A trade and commercial and economic co-operation agreement was concluded with the Soviet Union in December 1989 (Official Journal L68, 15.3.90, p3)

Relations between the EC, the Soviet Union and the other countries of the Eastern bloc were thus already developing before the dramatic events of 1989. However the events of the second half of that year transformed the situation and raised a whole series of new questions and issues about the relations between the EC and its neighbours to the east. This In Focus feature concentates on the development of relations between the EC/EU and the Soviet Union/Russian Federation.

While the EC quickly moved into the business of helping the reconstruction of the countries of Eastern and Central Europe through such initiatives as the PHARE programme, there was an initial reluctance to extend this assistance to the Soviet Union. However, at the European Council in Dublin in June 1990 the European Commission was asked to prepare proposals covering short-term credits and longer-term support for economic structural reform.

The major step forward in relations between the European Union and the Russian Federation was the signing in 1994 of a Partnership and Co-operation Agreement (PCA), which came into force in 1997. The objectives of the PCA are:

  • to provide an appropriate framework for the political dialogue between the Parties allowing the development of close relations between them in this field
  • to promote trade and investment and harmonious economic relations between the Parties based on the principles of market economy and so to foster sustainable development in the Parties
  • to strengthen political and economic freedoms
  • to support Russian efforts to consolidate its democracy and to develop its economy and to complete the transition into a market economy
  • to provide a basis for economic, social, financial and cultural cooperation founded on the principles of mutual advantage, mutual responsibility and mutual support
  • to promote activities of joint interest
  • to provide an appropriate framework for the gradual integration between Russia and a wider area of cooperation in Europe
  • to create the necessary conditions for the future establishment of a free trade area between the Community and Russia covering substantially all trade in goods between them, as well as conditions for bringing about freedom of establishment of companies, of cross-border trade in services and of capital movements.

Separate PCAs have been signed with many of the republics of the former Soviet Union.

The PCA with Russia has led to intensified relations between the EU and the Russian Federation since 1997 under the following headings:

  • Trade: Most Favoured Nation treatment and the elimination of quantitative restrictions
  • Political dialogue: Increased and institutionalised dialogue at all levels
  • Economic and legislative co-operation: Broad co-operation in sectors such as science and technology, energy, transport and the environment
  • Justice and Home Affairs: Cooperation to prevent illegal activities, including cooperation to combat trafficking in drugs, money laundering and organised crime
  • Institutions: Summit, Co-operation Council (ministerial level), Co-operation Committee (senior official level), Sub-Committees on technical issues

The EU's TACIS programme of technical assistance is a central aspect of the implementation of the PCA agreement. Through this programme, and others, the EU is the largest provider of economic and technical assistance to Russia.

A further major development was the adoption in June 1999 of a Common Strategy between the European Union and Russia. 'Common Strategies' are a new EU mechanism established by the Treaty of Amsterdam, 1997 to ensure co-ordination of all activities of the European Union and its Member States with third countries. The Common Strategy with Russia was the first time this new device has been used and aims to combine EU and Member State actions in the following areas:

  • Consolidation of democracy, rule of law and public institutions
  • Integration of Russia into a common European economic and social space
  • Stability and security in Europe and beyond
  • Common challenges on the European continent (environment, crime etc).

Each EU Presidency sets out a work plan for the implementation of the common strategy. The current Swedish EU Presidency (January-June 2001) work plan is available. Priorities include:

  • reinforced political and economic dialogue
  • the strengthening of civil society
  • the fight against organised crime
  • the environment
  • disarmament and non-proliferation
  • support for Russia's efforts to meet the requirements for WTO membership.

The European Union's relations with Russia will also be further developed in the context of the Northern Dimension Action Plan, especially in regard to the environment and nuclear safety, the fight against organised crime, and the situation of Kaliningrad, June 2002.

The EU represents Russia's largest trade partner, accounting for 36.7&percent; of Russia's imports and 33.2&percent; of its export trade. Fuel and other primary products forms the bulk of Russian exports to the EU, while finished industrial products form the bulk of exports from the EU to Russia. There is a marked trade imbalance in favour of Russia, due to the substantial export of fuel to the EU.

The election of Vladimir Putin as President of the Russian Federation in March 2000 has further helped the development of relations between the EU and the Russian Federation. While relations between Russia and the United States are still extremely important there is a discernible Russian tactic to build up closer co-operation with the EU for political, economic and security reasons. An article by a Russian foreign policy expert in the Financial Times on the 18 May 2001 said: 'Mr Putin is probably the first Russian leader since the tsars who seems seriously intent on bringing Russia closer to Europe, if not into Europe'.

Historically, culturally and, increasingly, economically Russia is close to Europe, However, there are counter trends. Many Russians don't feel that the West generally should be too closely embraced and have been suspicious of the expansion of NATO to include some of the countries of the former Eastern bloc. Russia is also sensitive to western criticism of its actions in Chechnya and on issues such as the freedom of the media.

EU-Russia Summit, Moscow, 17 May 2001

While no formal decisions were taken at the 7th EU-Russia Summit in Moscow a Joint Statement issued after the meeting suggested a considerable degree of convergence on a range of issues.

We, the leaders of the Russian Federation and the European Union, having assembled in Moscow for the seventh Summit since the entry into force of the Partnership and Co-operation Agreement (PCA), reaffirm the special importance that we attach to the strengthening of our long-term strategic partnership based on the principles of democracy, respect for human rights, rule of law and market economy. Our aim is to foster economic growth and prosperity, social development, a clean environment and strengthened security and stability in Europe, on the basis of shared values.

Since the last EU-Russia Summit in Paris 30 October 2000, we have further developed and intensified our dialogue and co-operation. This has allowed us to concentrate our common agenda on a number of key priorities. These include dialogue and cooperation on security issues, stimulating trade and investment, developing cooperation in the context of the energy dialogue, reinforcing our dialogue on Justice and Home Affairs and strengthening our cooperation on environment and nuclear safety as well as in the field of science and technology. The meeting in Stockholm on 23 March 2001 between the Heads of State and Government of the European Union and the President of the Russian Federation provided a new dimension to our dialogue at the highest level.

European Commission Prodi was said to have encouraged the Russians to use the Euro in international trade and its reserves, instead of the US dollar.Certain commentators have begun to discuss the issue as to whether Russia should seek eventually to join the European Union: while for some on both sides that is not a realistic or desirable prospect, the intensification of relations, it has been suggested, should lead to a more informal concept such as a 'common European space' and serious attempts by Russia to align such features as technical standards with the EU.

Further information within European Sources Online:

European Sources Online: Topic Guide:
- Country information: Russia

European Sources Online: European Voice
- 20.11.97: Frosty climate for Russian talks- 4.12.97: Call for tough stance with Moscow on overflight charges- 14.5.98: Quiet revolution away from the spotlight- 10.9.98: Russian crisis hits EU meat export market- 1.4.99: Russia seeks Kosovo talks under cooperation deal- 12.5.99: New strategy for relations with Russia- 6.1.00: Commission drafts sanctions against Russia over Chechnya- 20.1.00: Russia threatens retaliation if Union imposes trade sanctions- 17.2.00: Fears raised over cut in Russian steel quota- 6.4.00: EU maintains tough stance on Moscow- 25.5.00: Union seeks to use summit to influence Russian reforms- 6.7.00: Moscow set to receive frozen aid- 26.10.00: Bid to bridge the reality gap with Putin- 2.11.00: EU-Russia summit, Paris, 30.10.00- 11.1.01: Sweden hopes to use its time at the EU helm to forge closer relations with Russia- 18.1.01: Sweden to seek backing for targeted EIB loans to Russia- 1.2.01: Court of Auditors attacks EU's food aid programme to Russia- 1.3.01: Moscow talks aim to ease enclave plight- 22.3.01: Putin plea for investment- 17.5.01: Russia set for deal with EU to dispose of nuclear fuel rods

Further information can be seen in these external links:
(long-term access cannot be guaranteed)

Sweden: EU Presidency website
- Focus on economic cooperation during Putin's visit, 2001

European Commission: DG External Relations
- The EU and Russia
- Background Note on the EU-Russia summit, May 2001
- Delegation in Russia

European Commission: Press and Communication Service: RAPID
- 28.11.97: Press Release: Entry into force of Partnership and Co-operation Agreement with Russia
- 27.1.98: Memo: EU-Russia relations, May 2001
- 3.9.98: Press Release: The situation in Russia
- 27.3.00: Press Release: Message by Commission President Romano Prodi to Vladimir Putin, President of the Russian Federation
- 4.12.00: Press Release: Signature of an Agreement on Scientific and Technological Co-operation between the European Community and Russia
- 17.1.01: Press Release: Commission launches debate on impact of enlargement on Kaliningrad
- 18.1.01: Speech: The EU and Russia: The way ahead (+ Summary)
- 15.5.01: Press Release: EU/Russian Federation Energy Dialogue on track

Further Press Release and related sources can be found by a search. Insert 'Russia' in the keywords field and choose the date period to be covered.

Council of the European Union
- EU-Russia Summit, London 15 May 1998: Joint Statement (not available)
- EU-Russia Summit, Vienna, 27 October 1998: Joint Statement
- EU-Russia Summit, Moscow, 18 February 1999: Joint Statement
- EU-Russia Summit, Helsinki, 22 October 1999: Joint Statement
- EU-Russia Summit, Moscow, 29 May 2000: Joint Statement
- EU-Russia Summit, Paris, 30 October 2000: Joint Statement
- EU-Russia Summit, Moscow, 17 May 2001: Joint Statement

North Atlantic Treaty Organisation
- NATO-Russia relations, 2001
- Partnerships: NATO-Russia

BBC News
- 1.12.97: EU and Russia boost ties
- 5.9.98: EU ministers to discuss Russia crisis
- 6.9.98: EU: no bail out for Russia
- 9.10.98: EU president talks tactics in Russia
- 10.10.98: Russia asking EU for winter food supplies
- 29.10.98: Britain and Germany call for common EU strategy towards Russia
- 9.11.98: EU backs Russia food aid plan
- 20.1.99: EU and Russia sign food aid deal
- 5.2.99: EU postpones Russia aid
- 22.10.99: EU and Russia row over Chechnya
- 17.11.99: EU officials condemn Russia over Chechnya
- 9.12.99: Analysis: EU searches for action plan
- 21.1.00: EU freezes financial aid to Russia
- 6.4.00: EU to raise Russia concerns
- 7.4.00: EU keeps pressure on Putin
- 29.5.00: EU aims to boost Russia ties
- 29.5.00: EU and Russia hail closer ties
- 10.7.00: EU to unblock aid to Russia
- 19.9.00: Russia 'could join EU'
- 21.2.01: EU urges Russia on conflict resolution
- 30.3.01: Russia facing meat crisis
- 5.4.01: Russia ready to cooperate with EU
- 6.4.01: EU, Russia cooperation against organised crime
- 17.5.01: Putin faces EU concerns
- 17.5.01: Russia and the EU deepen ties
- 17.5.01: Russia eyes the European family

FT.com
- 14.2.01: Call to make Kaliningrad mirror Hong Kong- 22.2.01: Moscow unveils its proposals for missile defence system- 9.4.01: Russia and the EU: Intense suspicion gives way to support- 19.4.01: EBRD aims to focus on former Soviet Union- 18.5.01: Building bridges with Brussels

The Guardian (To find full text of article use 'Advanced search' on homepage.)
- Prodi invites Russia to dump dollar for euro

Program of New Approaches to Russian Security (PONARS)
- Russia and the European Union: The Northern Dimension, 2000
- Russia and the European Union: The Case of Kaliningrad, 2000
- EU Enlargement in the Baltic Sea Region and Russia: Obvious Problems, Unclear Solutions, 2000
- Why the United States Should Cede its Russia Policy to Europe, 2000
- Further papers

Further and subsequent information on the subject of this In Focus can be found by an 'Advanced Search' in European Sources Online by inserting 'Russia' in the keyword field.

Ian Thomson
Executive Editor, European Sources Online
Compiled: 19 May 2001

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