Mending fences

The annual summit between the European Union and Russia, which took place on Wednesday, was described by European Commission President Jose Manuel Barroso as "one of the best meetings we have had."

But, apart from a surprise and welcome announcement that Russia now aims to cut its carbon dioxide emissions by 20 percent to 25 percent - up from an earlier target of 10 percent to 15 percent - little of substance emerged from almost five hours of talks in Stockholm.

Earlier in the week the EU and Russia agreed an early warning system designed to give notice of energy supply problems. But at the summit the 27-nation bloc failed to receive assurances that Russia would refrain from cutting off gas supplies, as it did in January following a dispute between Moscow and Kyiv over transit payments.

Last week Russian Prime Minister Vladimir Putin raised concern in European capitals when he said Russia was prepared to close the valves again if Ukraine failed to pay for its natural gas or illegally siphons gas from the pipeline. Meanwhile, a suggestion from Putin that the EU should lend a billion dollars to Ukraine to help finance secure deliveries has been dismissed by European leaders.

With a quarter of the EU's gas coming from Russia, and most of that piped through Ukraine, the two-week shutdown left millions of people in eastern Europe without heat and forced factories to close.

Although the EU wants to diversify its energy supplies, its reliance on Russian gas is likely to become further entrenched with the building of two multi-billion euro gas pipelines, which will bypass Ukraine: the Russian-backed South Stream and North Stream pipelines. Both projects are seen as rivals to the EU's planned Nabucco pipeline to bring gas to Europe from Central Asia.

Security of energy supplies

The EU is now hoping that bilateral talks between Russia and Ukraine, which got underway in Yalta on Thursday, will avert a possible new conflict disrupting supplies of Russian gas.

Ukrainian Prime Minister Yulia Tymoshenko and Putin brokered a deal last January ending a conflict over gas pricing. But relations between Russia and the former Soviet republic have slid further in the run-up to Ukraine's presidential election, slated for January 17, and the outcome of the talks is difficult to read according to analysts.

The gas deal between Russia and Ukraine has become mired in infighting in Ukraine between Tymoshenko and her rival, President Viktor Yushchenko. Although Ukraine has so far settled all its bills on time, Tymoshenko has conceded that meeting the monthly gas payments is a struggle.

At the EU-Russia summit there was no movement from Russia on issues such as human rights, in spite of the European Parliament last week calling on Russia to improve its act on this and other issues such as the status of the occupied Georgian territories of Abkhazia and South Ossetia. For its part Russia is likely to have been disappointed by lack of progress over its wish to secure visa-free travel for its citizens.

WTO accession expected soon

More positively, Russian President Dmitry Medvedev indicated his country was committed to joining the World Trade Organization (WTO). Russia is currently the world's largest economy outside the Geneva-based WTO and has been negotiating membership for 16 years. The issue of Russian membership of the international trade arbiter is considered vital to the EU, which is Russia's largest trading partner with annual trade last year amounting to $382 billion.

Medvedev said a much-delayed new strategic partnership agreement between Russia and the EU would be agreed soon to replace a previous agreement that expired at the end of 2007.

Emissions cuts

Russia's offer to up its goal of cutting carbon dioxide emissions to between 20 percent and 25 percent below 1990 levels by 2020 is likely to have been gratefully received by the EU which has been leading calls for emissions cuts ahead of next month's round of climate negotiations in Copenhagen.

Russia's upwardly-revised pledge could prove useful in putting pressure on other heavily polluting industrialized and emerging countries like the US, China and India to make similar offers.

Russia's increased goal will actually allow it to increase emissions because the country's emissions have fallen sharply since the collapse of the Soviet industrial base since 1990. Russia claims it will meet its new commitment by improving the energy efficiency of Russian factories by 40 percent.

Low expectations

In spite of the lack of significant breakthroughs to come from this week's summit there is little doubt that relations between the EU and Russia are finally on the mend. Relations hit a low over the last year following the August 2008 Georgia-Russia war and the disruption to Russian gas exports last winter.

According to Arkady Moshes of the Finnish Institute of International Affairs the mood of this week’s summit was "significantly more positive" than previous years and belies the lack of concrete agreements.

"In terms of commitments it is true that nothing much was achieved, but nothing much was expected anyway," he said. "The Russian leader spoke with the EU in the sort of language that the EU likes to hear - particularly with regard to the fact that Russia is serious about joining the WTO. At the same time Barroso spoke the language that Medvedev likes to hear. For example that the EU is ready to assist Russia with modernization plans."

Moshes said he was optimistic that differences over the issue of visas could be resolved "once security issues have been addressed." Recent research by Moshes into attitudes to the liberalization of visa policies in European capitals had revealed that EU states were "not negative."

"Concerns about the possibility of illegal Russian labor migration are actually very low," Moshes said.

The appointment of an EU council president and foreign policy head, as envisaged by the Lisbon Treaty, which comes into force in December, would lead to a more coordinated approach to negotiations between the EU and Russia, according to Alex Nice of Chatham House.

Until now the relationship has been piecemeal. Whereas some countries, particularly Germany, have favored rapprochement through economic ties, other countries, such as the UK and some of the newer EU member states, have been more cautious.

"Economic engagement is to be encouraged as long as EU standards of transparency and the rules of the game are observed," Nice said.

Nice said he was not surprised at the lack of any progress by Russia on human rights. Despite frequent comments by Medvedev that he was in favor of liberalization, freedom of speech continues to be routinely suppressed and there have been no improvements to human rights since Medvedev came to power 18 months ago.

The EU was unlikely to extend visa-free travel to Russian and Ukrainian citizens, Nice said, but liberalizations of red-tape would improve relations.

Bilateral relations between a number of EU countries and Russia have improved significantly in recent weeks. Earlier this month saw the first visit to Russia by a British foreign secretary for five years.

Russia's relations with Sweden have also been strained since Sweden's Foreign Minister Carl Bildt compared Russia's military deployment in Georgia last summer with Hitler's invasion of countries in central Europe.

Sweden's recent decision to back the 8 billion euro ($12 billion) North Stream pipeline is believed to have improved the mood ahead of this week’s summit. The 1,200-km pipeline is designed to pump some 56 billion cubic meters of gas a year from the Russian Baltic port of Vyborg to the German port of Greifswald and is expected to come on stream in 2012.

Author: Mark Latham

Editor: Sean Sinico