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friends or foes?
A report by The Economist Intelligence Unit
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Russia and the EU:
friends or foes?
Contents
Introduction2
Friends8
Foes 11
Appendix14
Introduction
O n February 27th 2014, only four days after the closing ceremony of the Sochi Winter Olympics,
Russian troops entered the Ukrainian peninsula of Crimea. Russia’s subsequent annexation
of Crimea and its backing of separatist rebels in eastern Ukraine marked a turning point in the
relationship between the EU and Russia: for the first time since the end of the cold war and after a
rehearsal in Georgia in 2008, Vladimir Putin, the Russian president, openly flouted the rules of the
post-second world war global order.
The objectives of Russia’s foreign policy appear to be threefold.
l First, Russia wants to prevent any of the former Soviet countries, which it sees as belonging to its
sphere of interest, from entering Western institutions such as the EU or NATO.
l Second, Russia wants to prove that it is still a major player on the international stage, having lost its
cold-war status as a global superpower and having perceived its treatment in the post-cold war era at
the hands of the US in particular, and the West in general, as a humiliation.
l Finally, Russia wants to see a multipolar world order, one that is not dominated by a single
superpower (the US).
There is very little chance that presidential elections in Russia (in 2018) and Ukraine (in 2019)
will change the essential dynamics of the relationship between the EU and Russia. The Economist
Intelligence Unit believes that Mr Putin will remain president of the Russian Federation until 2024;
that the Minsk II ceasefire agreement will not put an end to the Ukrainian conflict in 2017-22; and that
Russia will retain control of Crimea. The situation in eastern Ukraine now appears to be frozen, which
serves the interests of Russia since it effectively prevents Ukraine from joining the EU and NATO.
As a result, Russia’s relationship with the EU is likely to remain difficult, competitive and conflict-
prone over the next five years. In 2012, 43% of Russians believed that Russia should join the EU,
according to Levada, a Russian polling agency. Only 25% of them still think so today. Relations
between Russia and the EU are in bad shape as 2017 draws to a close.
There is a risk that the current, mainly conflictual, relationship will persist over the medium term.
Russia has more to lose than the EU in the economic, political and diplomatic spheres if this situation
persists or if its relationship with the European bloc deteriorates further. However, for several reasons
outlined in this paper related to shared economic, energy and security interests, there is a chance that
relations could be repaired.
Our baseline forecast is that EU-Russia relations will be an uneasy mix of conflict and co-operation;
there will be periods of high tension, but there will also be instances of the two sides coming to an
agreement and working together. In this White Paper we analyse the key determinants of the EU-Russia
relationship and highlight the points of conflict and of potential co-operation. We also take a closer
look at some of the key protagonists and at the dynamics of their past, present and future relations
with Russia.
2 © The Economist Intelligence Unit Limited 2017
Russia and the EU:
friends or foes?
S ince early 2014 the relationship between the EU and Russia has gone from bad to worse. There
are now few areas of agreement between the two sides. European financial sanctions and Russian
counter-sanctions are likely to remain in place for years. This prevents Russian companies in the
energy, defence and financial sectors from raising funds in European capital markets, while EU
companies cannot export food products to Russia. Even if they were lifted, EU sanctions would have a
long-term impact, since Western companies would remain wary of conducting business in Russia for
many years for fear of a possible snapback of sanctions, as is now happening in Iran.
Furthermore, the EU and Russia disagree on virtually any diplomatic topic, as exemplified in Syria,
where Russia supports the regime of Bashar al-Assad, whereas the EU favours an orderly political
transition. In addition, the EU appears to be increasingly anxious about the recent Russian military
build-up in terms of defence spending and modernisation of the army, as demonstrated by the media
attention around the Zapad Russian military exercise in September 2017. Finally, Russia’s increasing
use of information warfare techniques—which are meant to sow doubt in public opinion in the West in
a way that advances Russian interests—as well as its alleged meddling in recent Western elections have
also contributed to the growing divide between the two sides.
Sergei Lavrov, the Russian minister of foreign affairs, believes would be “at the expense of the Russian
national interest”.
SWEDEN
ESTONIA RUSSIA
LATVIA
DENMARK LITHUANIA
NETHERLANDS
IRELAND
UK POLAND
GERMANY
CZECH
REPUBLIC
BELGIUM SLOVAKIA
LUXEMBOURG AUSTRIA
FRANCE HUNGARY
SLOVENIA ROMANIA
CROATIA
ITALY BULGARIA
PORTUGAL SPAIN
GREECE
MALTA
CYPRUS
Source: Eurostat.
80 80
70 70
60 60
50 50
40 40
30 30
20 20
10 10
0 0
2004 05 06 07 08 09 10 11 12 13 14 15 16 17
Source: Levada centre (http://www.levada.ru/en/ratings/).
Russia’s elite and its people therefore see Russia as primarily a European power whose interests
lie in Europe more than anywhere else in the world. Two other factors may serve to strengthen that
orientation towards Europe. First, the prospect of a rapprochement between Mr Putin and Donald
Trump, the US president, which had been widely discussed during the US presidential election
campaign in 2016, seems to have faded—at least in the short term—owing to intense media scrutiny
of the Trump team’s relations with Russian officials and the anti-Russian sentiment that pervades the
US political and military establishment (as exemplified by the recent imposition of new US sanctions
against Russia).
Second, Russia’s much-publicised pivot towards Asia appears not to be as successful as the Russian
government had originally hoped. Asian countries take only a third of Russian exports, whereas
European countries take more than half. In
Extra-EU imports of natural gas volumes, 2016 addition, despite the fanfare, the Power of
(% share)
Siberia gas pipeline between Russia’s far east
Libya, 1.5 Others, 2.3 and China will not be operating until at least
Nigeria, 2.1
2019. Furthermore, the negotiation of energy
Qatar, 5.8
Russia, contracts between Russia and China has always
38.2
Algeria, been difficult and lengthy. On a political level,
14.3 China does not appear to consider a closer
relationship with Russia—which it sees as
a junior partner rather than an equal—as a
priority. This may be to avoid antagonising
the US.
Norway, Finally, in the energy sector, Russia needs
35.8 Western technology to develop its oil and gas
Source: Eurostat. fields, and it remains heavily dependent on its
commodity exports to Europe—the bloc absorbs the vast majority of Russia’s gas exports—to subsidise
domestic gas prices. This may explain Russia’s efforts to appear as a rational and reliable supplier of
gas: even at the height of the Ukraine crisis in 2014-15 Russian gas supplies to European countries
through Ukraine were never cut. In this regard, liquefied natural gas (LNG) appears to be a growing
concern for Russia, since competition with LNG suppliers such as Qatar, Australia and the US is fierce.
More flexible and sometimes cheaper LNG deliveries to Europe might therefore gradually weaken the
rationale of building massive and expensive gas pipelines between the EU and Russia.
Friends
A mong the few countries in the EU that Russia can count as friends—namely Italy, Greece, Cyprus,
Hungary and, to a degree, the Czech Republic—domestic political concerns have played an
important role in shaping their attitudes towards their eastern neighbour and towards EU sanctions.
By virtue of history, geography, religion, culture and energy needs, some of these countries
(though not Hungary and the Czech Republic) have traditionally had closer ties to Russia. However, in
recent years economic and political difficulties at home and in relations with the EU have been much
more important in shaping their attitude towards Russia and the sanctions issue. Similarly, Turkey’s
efforts to rebuild relations with Russia after the crisis that followed the shooting down of a Russian
plane by the Turkish air force in late 2015 should be seen primarily as a response to difficult domestic
and regional political challenges.
and investment ties with Russia. However, it too has occasionally been an outlier where Russia is
concerned, mainly for domestic political reasons.
In the face of a mounting populist challenge at home the former prime minister, Matteo Renzi,
became an outspoken critic of EU sanctions policy in 2015-16, questioning but not blocking the
renewal of existing sanctions and opposing additional sanctions following the bombardment of Aleppo
in Syria in 2016. His motivation was not so much to cement relations with Russia, but rather to bolster
his domestic political position among a population that had become increasingly disaffected with the
EU and its own political class as Italy struggled through the post-crisis years.
elections that are due to take place in late 2019 but may be held earlier. The elections will be the final
hurdle on the way to achieving Mr Erdogan’s goal of being elected president with executive powers
under the revised constitution approved in a controversial, close-run referendum in April 2017, in
effect paving the way for the establishment of one-man rule.
For similar reasons, Mr Erdogan and the AKP have executed a hard rightward shift on the Kurdish
issue both in Turkey and in the surrounding region, notably in Syria and more recently in Iraq.
Having spent two-and-a-half years in peace negotiations with the jailed leader of the outlawed
Kurdistan Workers’ Party (PKK), the government is once again engaged in a war against the PKK and a
clampdown on Turkey’s pro-Kurdish political opposition. Both began in mid-2015, after the AKP lost its
parliamentary majority in the June general election. Presenting itself as the only guarantor of security
and stability, the party won the second general election in November 2015 and restored its majority.
It is in this light that Turkey’s restored relations with Russia should be viewed. When Turkey downed
the Russian aircraft in late 2015, the government was supporting Syrian rebel forces fighting the
Russian-backed regime of Bashar al-Assad in Syria. Since last year Turkey has abandoned its calls for Mr
Assad to be removed, but in return it is hoping that Russia will use its position in Syria to prevent the
emergence of an extended autonomous Kurdish region in the country. That may be wishful thinking
on Turkey’s part. Russia maintains close ties with the Kurdish People’s Protection Units (YPG), the
US-backed PKK affiliate fighting Islamic State in Syria. When the Kurdistan Regional Government
in northern Iraq held an independence referendum on September 25th, Turkey threatened it with
economic sanctions and military action. Russia’s response was more measured, stating that it
supported Iraq’s territorial integrity but was respectful of Kurdish national aspirations—a view that is
entirely unacceptable to Turkey, but one which it has refrained from criticising.
Foes
to boost its defence systems. In response, the Russian Ministry of Foreign Affairs issued a statement
arguing that the missile defence systems violated the Intermediate-Range Nuclear Forces (INF) treaty.
More recently, relations with Russia have also been strained following the decision by the Romanian
Ministry of Foreign Affairs to refuse permission to Dmitry Rogozin, a Russian deputy prime minister,
to overfly Romania in July. Mr Rogozin, who is among the Russian officials banned from entering EU
territory or airspace, had planned to fly over Hungary and Romania in a civilian airliner to visit the
pro-Russian president of Moldova, Igor Dodon. Russia responded by temporarily banning pork imports
from Romania.
An easing of tensions between Romania and Russia in the coming years is unlikely.
(FCO) is expected to publish its analysis of how the UK would impose sanctions post-Brexit by March
2018. The UK might leave the European Convention on Human Rights after Brexit is completed. This
might damage the UK’s credibility in raising human rights concerns with Russia.
Post-Brexit rapprochement?
A lot may depend on who leads the UK post-Brexit. After Theresa May succeeded David Cameron as
prime minister following the Brexit referendum in 2016, the newly appointed foreign secretary, Boris
Johnson, stated that he wished to normalise relations between the UK and Russia. Mr Johnson has
since stepped back from this stance and reverted to a hawkish rhetoric on Russia. He was, for example,
vocal in alleging that Russia sought to conduct a coup in Montenegro in late 2016. However, were he
to become prime minister in a post-Brexit Britain, Mr Johnson might again make overtures to Moscow.
Mrs May, by contrast, is unlikely to change her hawkish position. In 2017 relations between the UK
and Russia became even more tense when in a meeting with the US president, Donald Trump, Mrs May
called for sanctions on Russia to be continued, and at a meeting with the Ukrainian president, Petro
Poroshenko, she stated that Britain was ready to support Ukraine in the event of a Russian attack.
A lot may also depend on how relations between the US and Russia develop. This would also probably
affect the UK-Russian relationship post-Brexit. Mr Trump has drawn criticism for favourable comments
that he has made about the Russian president, Vladimir Putin. In January 2017 the then president-
elect said in an interview that he would like to “make some good deals with Russia” and implied that he
would consider lifting sanctions on Russia in exchange for an agreement on nuclear arms reduction.
However, Mr Trump has been constrained in seeking a rapprochement with Moscow by the “Russiagate”
investigations in the US into alleged Russian meddling in the 2016 US election.
Appendix
Table 1
National political system ties with Russia
Colour key: Green: unfriendly towards Russia. Red: friendly towards Russia
Q7 - Relations with Q8 - Sanctions Q9 - Support for Q12 - Party Links
Russia Ukraine
Hungary -0.98 -0.97 0.88 -1.96
Austria -0.78 -0.76 -0.62 -1.45
Greece -1.34 -1.22 0.01 -1.84
Slovakia -0.76 -0.94 0.07 -0.92
Bulgaria -0.56 -0.47 -0.14 -1.66
Czech Rep. -0.43 0.24 0.59 -0.49
Finland 0.37 -0.15 0.62 -0.55
France -0.35 0 0.18 -0.21
Italy -0.2 -0.4 0.61 -0.93
Sweden 0.95 0.73 0.67 0.73
Poland 2.12 1.78 1.69 1.34
Malta 0.3 0 2 -0.57
Denmark 1.37 0.75 0.81 0.48
Romania 1.4 1.48 1.95 -0.32
Spain 0.04 0.52 0.59 -0.24
Germany 0.49 0.8 0.68 0.64
Belgium -0.02 0.21 0.74 0.78
Netherlands 0.02 0.18 0.7 0.87
Portugal -0.3 0 1.08 0.54
UK 1.59 1.58 1.6 2.02
Slovenia 0.24 2.33 2.29 0.68
Estonia 2.05 1.84 2.32 1.08
EU average 0.238 0.342 0.877 -0.09
EU north 0.976 0.82 1.055 0.753
EU south -0.107 0.118 0.794 -0.484
North-south difference 1.083 0.702 0.261 1.237
Source. European Council on Foreign Relations - Fellow travellers: Russia, anti-westernism, and Europe’s political parties
Link: http://www.ecfr.eu/page/-/ECFR225_-_FELLOW_TRAVELLERS_ANNEX2.pdf
Item scores range from +3 to -3 (in extreme cases -4), with +3 representing the most pro-Western score and -3 the most
anti-Western score.
Q7. Relations with Russia. Pro-Western scores regard Russia as a revisionist power intending to change the current
European order, while anti-Western scores regard it as a ‘normal’ great power with ‘legitimate’ interests in its
neighbourhood or even as a strategic partner and ally, particularly in the ‘fight against terror’.
Q8. Sanctions on Russia. This is a follow-up to question 7. The pro-Western scores state that Russia needs to be punished
for its ongoing violations of international law, while the anti-Western scores want lift sanctions as quickly as possible for
the sake of own economic interest as well as to forge ties with Russia.
Q9. Support for Ukraine. The pro-Western scores state that every country has the right to choose its alliance and role model
for social, political, and economic modernisation – as long as Ukraine is committed to Westernisation it deserves support.
The anti-Western scores deny this, stating that Moscow’s interests in the neighbourhood come first, and that great power
interests come before self-determination.
Q12. The party’s links to Russia. The pro-Western scores distance political parties from the Russian regime, and/or they
support Russian civil society and opposition movements. On the anti-Western side, parties either promote Russia’s
economic interests, are a mouthpiece of Russian propaganda, or cultivate close ties with the Kremlin.
Table 2
The public’s view of Russia
(% of total)
Very favourable Somewhat favourable Somewhat Very unfavourable DK/Refused
unfavourable
France 5 31 38 24 2
Germany 4 23 53 14 6
Greece 14 50 23 8 5
Hungary 3 36 38 10 13
Italy 5 30 39 15 11
Netherlands 2 13 41 41 4
Poland 2 19 44 25 10
Spain 8 19 35 25 14
Sweden 2 16 49 29 4
United Kingdom 4 22 35 24 15
Turkey 6 26 25 37 6
Source.Pew Research Center - Publics Worldwide unfavorable toward Putin, Russia
Link: http://www.pewglobal.org/2017/08/16/publics-worldwide-unfavorable-toward-putin-russia/
Answers are in percentages
Table 3
The public’s view of Russia
(% of total)
Major threat Minor threat Not a threat DK/Refused
France 45 39 14 2
Germany 33 53 12 2
Greece 24 24 50 3
Hungary 28 45 22 6
Italy 31 35 25 9
Netherlands 44 44 10 2
Poland 65 25 5 5
Spain 47 28 18 6
Sweden 39 52 8 1
United Kingdom 43 41 10 6
Turkey 54 25 15 6
Source.Pew Research Center - Publics Worldwide unfavorable toward Putin, Russia
Link: http://www.pewglobal.org/2017/08/16/publics-worldwide-unfavorable-toward-putin-russia/
Answers are in percentages
© The Economist Intelligence Unit Limited 2017 15
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