America and the world into a new era - Part II

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.