At this year’s St. Petersburg International Economic Forum, the primary focus of attention has been how to restore Russian-EU relations to some degree of normalcy.
Russia and the EU raised the problem of lifting sanctions on Russia at the 2016 St. Petersburg International Economic Forum. Photo: Vladimir Smirnov / TASS
June 16 marked the beginning of the annual St. Petersburg International Economic Forum (SPIEF), which is celebrating its 20th anniversary this year. With the President of the European Commission Jean-Claude Juncker attending the conference (despite resistance from the U.S. and some European countries), one of the key topics of discussion is the current crisis in the relationship between Moscow and Brussels and whether it is possible to find a way out of this confrontation that is hampering both sides’ economies.
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“The price we pay is high,” says Rainer Seele, chairman of the executive board and chief executive officer of OMV AG, president of the Russian-German Chamber of Foreign Trade, and one of the participants of the Valdai Discussion Club meeting at the Forum. Pointing to the slump of exports, imports and jobs in the EU on the one hand, and recession, inflation and decrease in the living standards in Russia on the other hand, he has no doubt about the huge potential both partners have for one another.
As Seele points out, Russia’s huge market for EU goods and services presents a number of opportunities for European companies. To make a revival of cooperation possible, it’s necessary to rebuild mutual trust, Seele suggested.
“We have seen in the past 45 years, [dating back to] when we signed the first contract, Russia was always a reliable supplier of gas,” Seele noted, stating that Europe needs more gas from Russia and the rebuilding of the relationship is vital for both countries.
Alexander Medvedev, deputy chairman of the management committee of Russian energy giant Gazprom, shares this view and added that Russian and EU economies are dependent on one another. He also criticized one of the five principles presented in March by the EU Foreign Affairs Council, which states that the EU aims to strengthen internal resilience in energy security and other area. This implies limitations for Russia-EU energy cooperation, but to what extent will this resilience develop?
No one knows, said Medvedev. Looking into the potential ways out of this situation, he believes that large joint energy projects, like the Nord Stream 2 gas pipeline, and their great economic potential could ensure that cooperation resumes and these projects will become a reality.
Sanctions are something that businesses do oppose: in Germany, for instance, 88 percent of companies want sanctions on Russia to be lifted as soon as possible, according to a 2016 poll. But political rhetoric does not let economic pragmatism prevail: Current reports are that sanctions on Russia are most likely to be prolonged for another six months as early as next week.
Juncker, who took part in the Forum’s opening ceremony along with Secretary General of the United Nations Ban Ki-Moon, was also scheduled to meet with Russian President Vladimir Putin in St. Petersburg to discuss sanctions. He was very open in sharing his take on the current state of Russia-EU relations with the participants of SPIEF 2016.
According to him, due to historical and geographic proximity between Russia and the member countries of the EU, it is simply impossible to ignore the necessity to resume dialogue and cooperation. “We should talk with Russia and its people. For some it might be a radical idea, for me – it’s common sense,” he said.
The real problems that do exist in the relationship between Moscow and Brussels should not be ignored, but should be tackled urgently in order to focus on a “better future of our countries and peoples,” Juncker stated.
Following from his remarks, the necessary prerequisites to ensure at least the possibility for normalization of relations should be the implementation of the Minsk Agreements and mutual respect for international law.
Hubert Vedrine, speaking as a past foreign minister of France (1997-2002) during the session of the Valdai Club session, argued that the Ukrainian crisis put the countries 25 years back. What needs to be done is to build relations that will work. So many opportunities were missed, so many mistakes were made that had serious consequences for both sides, he argued.
“The Minsk agreements are the goal but now there is a situation when Russia says it is not going to act until the sanctions are lifted, while the EU is saying that they will only lift them when the agreements are implemented. I might exaggerate a bit, but I see the situation this way,” Vedrine remarked. “We need to be careful in taking steps that would involve all actors and make it possible to move forward.”
As follows from the official Russian position, expressed at the conference by Russian Foreign Minister Sergey Lavrov, the implementation of the Minsk agreements seem to be just another pretext to maintain the conflict in Ukraine. While the large part of the agreements should be implemented by the new government in Kiev, Russia for some reason is responsible, says Lavrov. This situation is obviously more favorable for Kiev than for Moscow.
According to him, the logic of confrontation in Russian-European relations emerged long before the events in Ukraine and the goal to contain Russia was in place for quite a while. If we look at the timing of the introduction of sanctions, this is quite evident, explained Lavrov.
“A large part of the sanctions was imposed after the Malaysian airplane was downed over Ukraine. No one said that an international investigation should be carried out, only Russia insisted on it, but the sanctions were imposed promptly,” said Lavrov. “It looked like it was just a pretext to impose sanctions.”
The next round of sanctions was imposed in September 2014, three days after the Minsk Agreements were signed. They were welcomed by everyone, but then-Chairman of the European Council Herman Van Rompuy without consultations with other EU leaders put them in place anyway, according to Lavrov. After Minsk 2 was adopted, the sanctions were prolonged.
The first steps to bring the relations back to life, including a more comprehensive dialogue on important issues, should be an inventory of the current state of Russia-EU relations. Both sides need to overview the general level of cooperation and analyze each sector of interaction.
Concluding his remarks, he said that “Russia is sometimes accused of not wanting to talk to the EU but rather with specific countries. But what can we do? We can’t move away from Europe, but if the European Commission has frozen its own channels with us, of course, it’s natural that we talk more with national governments.”