Will the EU offer its neighbours more than friendship?

Since the collapse of the Berlin Wall the countries of Europe - with the notable exception of Belarus - have decided, in one way or another, to link their fate with that of the EU.

But as the EU openly questions how much further it can expand, that choice is becoming an increasingly difficult one for the countries of eastern Europe and the Caucasus. Today, a policy of joining the EU is likely to achieve little more than a disenchanted electorate.

Without the prospect of membership the EU has struggled to convince its neighbours to implement substantial reforms or discard vested interests. Eastern Europe is still a major source of smuggling and organised crime.

To redress the balance the German government, which takes over the EU presidency on 1 January 2007, hopes to reform the European Neighbourhood Policy, originally devised in 2003 to extend the rule of law beyond the Union's borders.

Diplomats quip that the policy may have been too successful in convincing countries to develop deeper ties with the EU, but it has largely failed to meet the aspirations of neighbours, particularly would-be member states.

Berlin is now signalling its determination to instigate reform and diplomats say the neighbourhood policy will "definitely be a focus of the German presidency".

By dividing the disparate states that are currently part of the programme into two groups - those which could join the EU, one day, and those which almost certainly will not - Germany hopes to create new degrees of integration.

Sceptics say the plan is simply a way to introduce the concept of a 'privileged partnership' to thwart Turkish membership.

The details are sketchy, but officials say that the policy would offer significantly closer ties for some and would refine existing ties for others.

Under the proposals Algeria, Armenia, Azerbaijan, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, Moldova, Morocco, the Palestinian Authority, Syria, Tunisia and Ukraine will be separated into a north African and an eastern European group. The European states would be able to develop closer ties with the EU than their North African counterparts and than they currently do, but for the foreseeable future this would not mean membership.

Observers question what this would mean for the countries of the southern Mediterranean and Middle East, which under the existing policy have been pressed into accepting the same democratic reforms as their eastern European counterparts. At least six of the Arabic-speaking states are still highly authoritarian.

But on the eastern flank the need to reformulate the policy is clear. Russia's determination to increase its power has convinced many that the EU's offer to its eastern neighbours needs to be sweetened, as experience in Ukraine and Moldova has shown.

Moldova's President Vladimir Voronin says he has no misgivings about orientating his country towards the EU and away from Russia, but this is a little difficult to believe.

Since his decision shortly after 2005 elections to reposition Moldova within the EU's orbit, relations with Moscow - and the country's economy, have faltered.

Voronin's main aim, resolving the conflict with the Russian-backed separatist region of Transnistria by enlisting EU assistance, has been unsuccessful. Russia has banned Moldovan wine, claiming health risks, an export market that accounts for up to 89% of Moldova's wine exports.

The price for Russian gas has increased by 38%, but not before Moscow's state-controlled exporters cut supplies during the winter.

But relations with the EU have scarcely improved. Moldova has struggled to convince the EU to ease, never mind waive, visa regulations for Moldovans.

According to Michael Emerson of the Centre for European Policy Studies, after a couple of years of painful experience the EU has realised its current policies do not work.

The new neighbourhood policy is unlikely to make Voronin's difficulties disappear. But it could make life a little easier both for him and ordinary Moldovans.

Much depends on the EU's willingness to open up and whether leaders such as Voronin are serious about reform.

But the key question which will decide the success of the neighbourhood policy may be whether the EU can tackle the needs of its interlocutors, which means dealing with Russia effectively.

As diplomats from Georgia, Moldova and Ukraine keep on repeating, their principal aim in engaging with the EU is better to balance their relations with Moscow.

Under the existing neighbourhood policy the EU has been reluctant to engage in frozen conflicts and sensitive disputes. It may be time to engage.

Since the collapse of the Berlin Wall the countries of Europe - with the notable exception of Belarus - have decided, in one way or another, to link their fate with that of the EU.