America and the world into a new era - Part II

Worries have been growing for some time, but the guns of August dramatically exposed the European Union’s dilemma in dealing with an assertive and energy-rich Russia, especially its foreign and security presence in its eastern neighbourhood.

As Moscow flexes muscles in Georgia and other countries, the EU’s capacity for decisive action is hampered by deep divisions on how best to deal with resurgent Russia. This worries many former Soviet states who fear that, if left unchecked, Russia in its present aggressive mood will sabotage their efforts to draw closer to both the EU and NATO, thereby putting their hard-fought independence and sovereignty at risk.

Already the tough stance taken by the US towards Russia is causing some discomfort among its European allies, highlighting the fissure with the alliance. The war in Georgia marked “the end of the post Cold War period of growing geopolitical calm in and around Europe,” British Foreign Secretary David Miliband warned recently echoing Washington’s concern. He added that Ukraine could be next in line to face Russia’s wrath.

The EU’s so-called “old” member states France, Germany and Italy have historically lobbied for a more conciliatory approach towards Russia, not least because of their dependence on Russian oil and gas resources.

Italian Foreign Minister Franco Frattini said recently the West had made a "mistake" by humiliating Russia from 1991 to 2000, asking Moscow to be "a supplier of energy and welcome our investments" without being given a "political role" in return. "Russia has nourished a frustration which today exploded," Frattini said.

In contrast, “new” formerly communist EU states, including Baltic nations as well as Poland - joined by Sweden and Britain - press for a tougher line on Moscow, arguing that Russia should not be allowed to become the dominant power in the region.

Complicating the picture further are deep divisions within some EU governments over Russia. The schism within the German coalition is most marked, with Chancellor Angela Merkel, who was born in east Germany, much less willing to compromise with Moscow than her Foreign Minister Frank-Walter Steinmeier whose Social Democrat party favours a close partnership with Russia. Steinmeier once served as chief of staff for former Chancellor Gerhard Schroeder, who is now co-manager of a Baltic Sea pipeline project involving Gazprom, the Russian state-owned gas monopoly.

Recently, French President Nicolas Sarkozy and his chief diplomat Bernard Kouchner also appear to be singing from distinctly different song sheets. The French president appears uneasy about ruffling Russian feathers, but known human-rights advocate Kouchner has accused the country of seeking to start another cold war.

Equally critically, Russia’s tough stance casts a question mark over Europe's plans for further expansion into what Russian Prime Minister Vladimir Putin regards as a "post-Soviet space". While EU policymakers have so far only identified western Balkan states as future candidates, the bloc is seeking to strengthen relations with Georgia and Ukraine through an ambitious “neighbourhood policy” which includes the granting of trade and aid concessions and access to easier travel facilities. Russia has made no secret of its wariness of such initiatives.

The stakes are high for the 27-nation bloc. “Should the European Union not be able to find a clear, strong, common position,” on Russia and its eastern neighbours, “we can write off the EU as a political project for some time to come,” says Czech Foreign Minister Karel Schwarzenberg.

EU governments acknowledge that given Russia’s view that the current US administration is too friendly with Georgia, it’s up to Europe to play honest broker. However, to carry weight in Moscow, the Union must speak with one voice - an elusive goal so far.

As illustrated at an emergency meeting of EU leaders in Brussels on September 1, the 27-nation bloc’s efforts to craft a credible policy towards Moscow continue to be trammeled by deep discord due to history, geography and countries’ varied dependence on Russian oil and gas.

EU governments - and members of the North Atlantic Treaty Organization - also disagree on mapping out a long-term strategy for deepening relations with Georgia and Ukraine, two countries which, encouraged by Washington, harbour ambitions of joining both the Union and the western military alliance. France and Germany are lukewarm about opening EU doors to Ukraine, and oppose Washington’s demand to invite them to join NATO.

Although divided, EU leaders cannot be accused of inaction. Sarkozy, current chairman of the bloc, was quick off the mark to broker a ceasefire agreement signed by Russian President Dmitry Medvedev and Georgian leader Mikheil Saakashvili which ended the short but bloody war last month. Several other EU leaders, including German Chancellor Merkel, have also engaged in similarly frantic shuttle diplomacy between Moscow and Tbilisi.

Their efforts have produced few lasting results, however, highlighting what EU officials admit is the bloc’s limited leverage over Russia. Russia not only flouted its own commitment to withdraw their troops from Georgia to their pre-war positions by August 22, despite warnings by EU governments, Russian President Medvedev recognised the Georgian breakaway regions of Abkhazia and South Ossetia, a move condemned by the EU as a breach of international law.

Despite such concerns, however, EU leaders attending the emergency summit in Brussels this week opted for a cautious strategy, shying away from sanctions that would undercut EU-Russia trade or jeopardise EU imports of Russian energy sources.

Europe’s cautious approach is no surprise. Russia delivers over 40 per cent of EU gas imports. A third of Europe's imported oil now comes from Russia, the EU’s third most important trading partner, after the US and China.

EU leaders also rejected calls that they immediately suspend negotiations on an ambitious partnership agreement with Moscow despite demands for such a move by British Prime Minister Gordon Brown. Suggestions that Moscow could be expelled from the Group of Eight industrialised nations or that Europe should boycott the 2014 Winter Olympics in Sochi were rejected. “We don't want channels of communication with Russia to be cut off,” argued Merkel.

In addition, while EU leaders backed plans for a civilian monitoring mission to Georgia, they rejected the deployment of a military peacekeeping force there without an international agreement.

Given such discord, rethinking EU policy towards Russia is likely to be a difficult, long-haul effort, requiring a clear assessment of EU-Russian interdependence. But all the cards are not stacked in Russia’s favour.

While the EU relies on Russian energy and needs Moscow’s cooperation to deal with crisis spots like the Middle East and Iran, Russia is equally dependent on European investments in its energy sector. It needs European markets for sales of its oil and gas. In addition, EU backing is necessary if Moscow is to join the World Trade Organization.

Revisiting EU-Russian relations requires that European governments take concerted action to reduce their dependence on Russian energy by fully liberalising currently fragmented EU energy markets, step up the search for renewables and - in the case of Germany - reconsider their aversion to developing nuclear energy.

Action on the eastern front is needed as well. While quick EU membership is clearly not on the cards for Georgia and Ukraine, European governments must step up their engagement with eastern neighbours, including delivering on their promised support for Georgia’s reconstruction and other benefits.