Friday, 21 December 2012

EUROPE: '' Russia-EU Summit'': Drifting Apart tensions

Russian President Vladimir Putin is in Brussels for a summit with European Union leaders that is expected to focus on Putin's push to expand Moscow energy Gazprom deeper into the EU and a new tariff imposed by the Russians on imported cars and Russia's desire for a visa-waiver for its citizens traveling to Europe.

Two decades after the collapse of the Soviet Union, hopes for a harmonious convergence between East and West have not been fulfilled. The entire European House that Mikhail Gorbachev once dreamt of stands empty today. The difficult relationship between the East and the West is symptomatic of something even greater.

In economic terms, Russia, the world's largest country by landmass, and the EU, the strongest economic bloc, are becoming ever more intertwined. Politically, however, they are drifting further apart. As reliant as each partner may be on the other, they do not appear to have joint plans together for the future.

For Putin, the main issue in Friday's talks is EU energy market regulations intended to boost competition, which Moscow has described as discriminatory against Russia's state-controlled Gazprom gas company. European officials have warned Gazprom that it would have to allow third-party gas producers to use the prospective South Stream pipeline to comply with its new regulations. The EU's Third Energy Package bans suppliers from owning transit facilities such as pipelines.

Russia has argued that South Stream, which will run under the Black Sea and circumvent the US-and the EU-backed Nabucco pipeline project, should be exempt from the market regulations. The pipeline's construction began earlier this month.

Europe gets about two-fifths of its gas from Russia. South Stream, along with the already-operating Nord Stream pipeline under the Baltic Sea, would allow Russian gas to bypass Ukraine and avoid the repetition of supply cut-offs to Europe that came amid Russia-Ukraine pricing disputes.

There is also growing dissonance in the area of economic cooperation. At first glance, things appear to be going swimmingly. Bilateral trade is constantly growing, reaching €309 billion ($409 billion) in 2011. Moscow has helped to shore up the euro during the crisis by holding 41 percent of its €400 billion in foreign currency reserves in the European common currency. Meanwhile, 80 percent of the EU's foreign investment is placed in Russia. An estimated 20,000 EU-based firms have established subsidiaries in Russia.

Meanwhile, 45 percent of Russian exports -- largely oil and gas -- go to the EU. But that's precisely what Brussels would like to see change.

Putin also wants to secure a deal that would see Europe and Russia eliminate visa requirements on both sides for travelers in time for the 2014 Winter Olympic Games in Sotchi. But he has few prospects for his intiative -- the Europeans have been holding back on the proposal for years for political reasons. Russia believes that the "Common Steps Towards Visa-Free Travel" agreement, signed one year ago, provides a roadmap for the lifting of the visa requirement. On the EU side, however, there is only vague discussion of new negotiations.

There are also active disputes over protectionist measures taken by the Kremlin, which has, for example, banned the import of livestock from the EU. In addition, the country also hasn't yet signed a treaty that would provide foreign airlines with flyover rights for Siberia.

Russia and Europe might be close to each other however there is big drift, a lack of trust between them. Cold war resentments are still at play.  In Europe, doubts are growing that Russia really wants to be a "true partner and Europe fears that Russia is fatalistically falling back into its old, anti-Western tradition, on the one hand, Moscow no longer views the West as a model, given the dual debt crisis in Europe and the United States. Moscow views Europe as an industrial museum that is losing the war of innovation., on the other.

On the energy issue, Putin is unlikely to win any concessions for Gazprom as the EU's effort to diversify routes of supply has reduced Moscow's influence.

In Russia, has enough of being lectured about human rights like some kind of school pupil by the West and is shifting toward Asia. In the west, the number authoritarian laws that the Duma, Russia's parliament, adopts, has strengthened the position of anti-Russia hawks Today Russia-EU summit undercores the drifting apart tensions.

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist