EU speakers stressed that the EU's restrictive
measures against Russia were not an arbitrary punishment, but were instead, a necessary,
moderate and targeted reaction to events in Crimea and the Donbas in 2014.
One speaker pointed out that, in times of
increasing international tension, connectivity could become a divisive factor between Russia,
the EU and China, rather than a potentially unifying one.
The participants agreed that cooperation in the
digital sphere could be advantageous for both the EU and Russia. Both have declared that digital
transformation is a priority and have increased their investment in it significantly.
Both EU and Russian participants felt that the
effect of the new, broad approach of the US sanctions was detrimental and disincentivised
Russian action.
There was a rather sober assessment of the
current state of economic relations at the beginning of the discussion. Whilst the participants
agreed that the economic bond between Russia and the EU is still significant for both sides,
they also highlighted negative aspects and developments. The political context of the economic
relations was particularly important for EU speakers. They stressed that the EU's restrictive
measures against Russia were not an arbitrary punishment, but were instead, a necessary,
moderate and targeted reaction to events in Crimea and the Donbas in 2014. The EU participants
conceded that sanctions slowed down economic relations between the EU and Russia. However, they
were not the only or even the most important problem in this relationship, compared to the
negative investment climate and the lack of rule of law in Russia, which counted for more in the
eyes of European investors. Russian participants, on the other hand, were pessimistic about the
future of EU-Russia economic relations. The EU's share in Russia's foreign trade would
continually shrink in the coming years. This was as much due to Russia's economic reorientation
as it was to political disagreements and sanctions. No one could predict, however, whether this
development would be linear. The Russian and EU participants expressed doubts as to whether
economic relations could be restored to their pre-crisis scope and depth should the political
crisis come to an end at some point.
The Eurasian Economic Union was touched upon in
this context (see EUREN Chronicle no. 5). One Russian speaker asked which of the two narratives
was stronger in the EU debate about the EAEU: that the EAEU was too weak to be an appealing
cooperation partner, or that it was a Russian hegemonic project and should, therefore, be
treated with caution. The response from the EU side was that these were complementary, rather
than competing narratives: the low level of interest and multilateral interaction in the EAEU
convinced observers that there must be a (Russian) political rationale behind the project.
Russian participants agreed it would be "silly to deny" this political rationale in Russia's
approach. However, they argued that there was an economic rationale, too, not only from a
Russian perspective, but also from the perspective of the other member states. The EAEU would
continue to exist and the EU would have to deal with it in the future.
Economic connectivity has become a political
priority for many relevant international actors, as a result of growing global interdependence,
including in the digital sphere (see EUREN Policy Brief no. 3). Reducing barriers to economic
exchange and promoting economic interaction is considered to be an instrument to reduce
confrontation, build confidence, promote cooperation and generate synergies. The concept has
gained more prominence in view of China's Belt and Road Initiative, which is already
transforming economic interaction in Eurasia and Europe. The EU adopted a Euro-Asia Connectivity
Strategy in 2018 that mentioned Russia as a partner. Russia stated in its 2016 Foreign Policy
Concept that the EU remains an important partner in trade and foreign policy.
Participants
identified a variety of geopolitical projects that are related to the notion of connectivity,
from European political and economic integration to the Chinese Belt and Road Initiative to
Russian ideas of Greater Eurasia. These projects are not necessarily compatible. One speaker
pointed out that, in times of increasing international tension, connectivity could become a
divisive factor between Russia, the EU and China, rather than a potentially unifying one.
Another speaker asked how to interconnect the approaches of different international players to
connectivity in a meaningful way. Connectivity, it was stressed, was a rather vague concept and
required specification. In order to do this, the following themes and questions should be
explored: How can relevant state and non-state stakeholders be engaged, particularly in
countries between the EAEU and China? How can the role of rules and sustainability be assured,
as opposed to purely commercial initiatives (that are preferred by China)? How can the
environmental implications of large infrastructure projects be addressed? Moreover, the EU and
Russia should keep in mind rapid technological developments when discussing connectivity,
including in the digital sphere.
Digital transformation implies opportunities and
challenges for both the EU and (see EUREN Policy Brief no. 2). Brussels and Moscow are
developing strategies to address the groundbreaking impact of technological change on
governments, social systems and private businesses. They also have to deal with cybersecurity:
in this area, they find themselves on different sides of the fence more often than not. One
speaker noted that while the EU's focus was on data protection, China and Russia were more
interested in the control, and the US in the commercialization of data.
The participants
agreed that cooperation in the digital sphere could be advantageous for both the EU and Russia.
Both have declared that digital transformation is a priority and have increased their investment
in it significantly. Both lag behind compared to the other players, notably the US and China,
and could benefit from an exchange of experience. At the same time, a lack of trust, arising
from the current political impasse, the securitization of most things digital, and diverging
approaches towards security issues and data protection, present serious and mutually reinforcing
obstacles. Cautious first steps could be taken in the areas of e-commerce, fundamental research
(including under the EU's Horizon 2020 programme) and education. The EU and Russia could pursue
an informal exchange of their experiences on financial cybercrime and cyberterrorism prevention.
One speaker stressed the increasing security threat from lethal autonomous weapons. The EU and
Russia could consider a joint initiative to ban those weapons.
Mutual economic sanctions
need to be taken into consideration as a key variable when analysing economic relations between
the EU and Russia (see EUREN Policy Brief no. 1). However, one participant remarked that, in
hindsight, the focus of the discussion was mainly on EU and much less on Russian sanctions.
Views differed regarding the effects and effectiveness of the EU's restrictive measures against
Russia. Experts agreed (albeit to different degrees) that the effect of the sanctions was larger
on Russia than on the EU. Some participants pointed out that the sanctions had helped to deter
Russian military action in Ukraine. Moreover, sanctions were able to incentivise at least some
of the Russian political elite's representatives, as demonstrated, for instance, by Alexei
Kudrin's repeated calls that Russian foreign policy should aim to reduce the pressure of
sanctions.
The participants assessed that the prospect of
lifting sanctions was low, even if some EU governments and business communities would be willing
to take steps in that direction. Both EU and Russian participants felt that the effect of the
new, broad approach of the US sanctions was detrimental and disincentivised Russian action.
Russian speakers saw a risk that sanctions would either not be lifted or be reimposed once
Russia had complied with the Minsk
Agreements (citing JCPOA and Iran as an example). EU
experts, on the other hand, expressed doubt about Russia's willingness to stick to policy
changes once the sanctions were lifted. This part of the discussion reflected the very low level
of trust that exists in the current relationship. EU speakers questioned the significance of the
EU lifting its restrictive measures (provided that conditions are fulfilled) in light of the new
US sanctions legislation. Russian speakers objected. They were certain that such symbolic steps
would be appreciated by the Russian side.
Experts agreed that neither the EU, nor Russian
or US sanctions were likely to disappear soon. In this situation, Russia and the EU should both
consider low-key measures in order to preserve economic cooperation wherever possible, and
rebuild some of the trust that has been destroyed in recent years. For instance, authorization
procedures could be improved in order to make non-sanctioned trade and investment easier. Both
sides could try to offer more information about sanctions to businesses and maximize the clarity
and transparency of the sanction regulations. With a view to US sanctions legislation, the
experts discussed the possibility of the EU setting up an agency that could not only monitor the
risks emanating from secondary US sanctions, but also help the Commission and national
governments to carry out informed negotiations with US policymakers.