Russia needs to accept the fact that a grand integration of the EU and the Eurasian Economic Union is not going to happen anytime soon.

Russian President Vladimir Putin, right, and President of Kazakhstan Nursultan Nazarbayev, left, during the 2016 St. Petersburg International Economic Forum. Photo: RIA Novosti

Giving up illusions is always painful. Today this process is in full swing in the West as well as in Russia. The U.S. and EU elites are increasingly convinced that Moscow refuses to be part of the global liberal order. By the same token, Moscow is looking to redefine its identity and mission, which had previously presumed strategic partnership with the Euro-Atlantic community.

This disillusionment took hold against the backdrop of the Ukrainian crisis, which defeated the old hope for a Europe without borders and dividing lines. Today hardly anyone in the expert community doubts that the Ukrainian crisis has dashed all hopes for the Greater Europe concept, probably, for decades to come.

Apparently, it has also defeated the “Wider Europe” as European Commission President Jean-Claude Juncker has already declared a ban on EU enlargement until the 2020s. But it is hardly imaginable any government among the Eastern Partnership countries could join the EU in the foreseeable future. On the other hand, there is almost ubiquitous consensus in the West nowadays that the Eurasian Economic Union (EEU) represents a competing project to the EU, not a supplementing one.

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It seems there is currently only one format that deals with the idea of “integration of integrations” between the EU and EEU. It is an unofficial discussion panel comprised of experts from the Eurasian Development Bank (Russia, Kazakhstan) and International Institute for Applied Systems Analysis (Austria). Even those optimists concede that any cooperation agreement between the EU and EEU is improbable until the mid-2020s.

At the level of political statements, the EU refused to have any official dealings with the EEU, leaving without reply a letter that was sent by Eurasian Economic Commission laying out possible areas for dialogue and cooperation.

“Disintegration” – not “integration” - gaining momentum

The gap between Russia and the West seems to be helplessly widening. Moscow insists that getting back to “business as usual” is impossible and that what’s needed is a “big renegotiation” of security rules in Europe.

Meanwhile, the West presses Russia to surrender its ambitions and obey the rules of the world order de facto established after the fall of the Soviet Union “without prior arrangement.” That is, to abandon any ambition to participate in setting the new rules in Europe, leave this “headache” to the West, and scale back Russian interests in the neighboring countries.

Today, proponents of the “integration of integrations” in Europe (from the East as well as from the West) argue the need to “separate the sheep from the goats,” i.e. the economy from politics. That is a great idea, but unfortunately, unattainable any time soon.

Some hope that as the acute phase of the Ukrainian crisis passes, politics will intervene less with economy and trade. According to that narrative, politics will at the end of the day stop blocking integration that is driven by business interests. The European Union needs high-skilled labor, raw materials and energy, which members of the Eurasian Economic Union are eager to provide, being hungry for investment capital and leading technology to modernize their economies.

But this purely functionalist narrative seems too abstract. International relations experts have proclaimed the “return of geopolitics” only in recent years. However, as a rule, politics, economics and security interests have never been separated from each other.

In this regard, it is no coincidence that the NATO infrastructure was left intact in Europe after the Warsaw Pact – NATO’s “sibling alliance” - had been disbanded. Any deep and comprehensive trade bloc comes with arms and military guarantees. This is especially the case of the deep NATO-EU bond, not to mention that it helps to maintain discipline among U.S. allies and build trust among EU founding states.

Probably this partly explains why the EU and Russia have been talking the same talk but meaning different things while discussing integration at least up until 2008.

Moscow was dreaming about a Greater Europe as an economic union with a common indivisible security space and several sovereign poles operating within this “version of Europe” (a vision that closely resembles the “Europe of nations” of former French President Charles de Gaulle).

Meanwhile, the EU meant Wider Europe, implying expansion of its own standards, values and political structures, which the countries standing in the way, including Russia, should accept as “the only game in town.”

These differing visions of integration became apparent over the course of the Ukrainian crisis. Although, even earlier, it became more or less clear with Russian President Vladimir Putin’s Munich speech in 2007 and the Russian-Georgian war in 2008.

“Integration of integrations” – not here, not now

Hence we ought to take into account all three factors – politics, economy and security – trying to understand whether an “integration of integrations” is possible in the foreseeable future (assuming that the Ukrainian crisis is somehow resolved).

In economic terms, the basic integration framework is a free trade area. However, EEU members will not benefit from it. The EU will export more goods with high added value as a result of lifting tariffs with the Eurasian Economic Union, which is a good thing for the EU. On the contrary, EEU member countries will continue to export raw materials and energy, which are already subject to relatively low tariffs under the rules of the World Trade Organization (WTO).

Additionally, EEU industry will face increasing competition in domestic markets as the EU market is more than two times bigger (500+ million consumers) and possesses advanced technology. Recent research shows that launching a free trade area between EU and the EEU is not even expected to have a positive effect on EEU countries’ GDP.

In theory, this contradiction could be solved through additional agreements between the EU and EEU on investment flows or technology transfer. However, there is little hope that the EU will provide high-tech “Lend-Lease” for the Eurasian Economic Union.

It is not just the international competition for lucrative markets of high added value. When dealing with strategic investment and technology transfer, national politics inevitably comes into play, as we have seen many times over the 2000s, when Russia-EU relations qualified as a “strategic partnership,” but some big investment projects did not work out.

Trust and confidence is the basic currency of politics, and precisely these components have been shattered in relations between Russia and the West. It is difficult to believe trust could be restored in the foreseeable future.

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Two post-Soviet decades have passed with continuous attempts by Moscow to promote a common security system in Europe, including the proposal to turn the Organization for Security and Cooperation in Europe (OSCE) into a backbone security organization for Europe in 1994, Putin’s proposals in 1999-2000, and the rolling out of a draft of European Security Treaty by then-President Dmitry Medvedev in 2008-2009. 

All those initiatives were widely interpreted in the West as controversial attempts by the Russians to split NATO. It was understandable during the Cold War era. However, after several giant conciliatory gestures from Russia – ranging from German unification to closing the Lourdes intelligence facility near Havana, Cuba in 2002 – those arguments have become obsolete.

But now, precisely as American diplomat George Kennan foresaw in 1998, Russia’s adverse reaction to NATO enlargement is exploited to reanimate those arguments. Hence today it seems impossible to build relations between the EU and EEU on the expectation that indivisible European security can be reached in the foreseeable future.

It does not mean both sides should close the door to dialogue. On the countrary, dialogue is more important than ever. But one should not have high hopes for its results and set realistic goals. Russia has already sent a clear message it does not seek integration as part of throwing itself into the Western embrace. But coexistence and even cooperation in some areas is imaginable in the long run.

Economy of scale still matters. EEU states still need technology, markets and investment. Therefore, the EEU is actively establishing negotiating units to forge regional trading agreements with neighbors in the South and East.

Russia needs to get accustomed to a new reality: The nation is different and will not integrate with Europe over the course of a decade or two. Perhaps realizing that fact will open a way for a negotiation on the rules of the game. But hardly any realist expects it to happen anytime soon.

The opinion of the author may not necessarily reflect the position of Russia Direct or its staff.