Russia's EU window of opportunity

March 7, 2011 - 0:0
The ongoing unrest in Libya may prove a powerful catalyst for improving economic relations between Russia and the European Union. Negotiations on Russia's accession to the World Trade Organization by 2012 have resumed after a long hiatus. And this time it's not the chief Russian negotiator, Maxim Medvedkov, who is talking about Russian membership as an imminent prospect; it's European business leaders. European Commission President Jose Manuel Barroso was unusually sympathetic toward Russia's concerns at a recent meeting in Brussels with Vladimir Putin. The Russian prime minister described as ""expropriation"" the Third EU Energy Package, which obligates Gazprom to take on additional foreign partners it does not need. In today's Europe, it is a serious matter to accuse the government of interfering with private property. Yet, instead of hitting back, Barroso struck a conciliatory tone, and said that the EU understands Russia's concerns and will try to meet Russia halfway. This does not mean, however, that EU leaders have suddenly overcome their negative perception of Russia, which is largely based on Cold War stereotypes. Rather, EU bureaucrats, who have long been living in a world of anti-Russian delusions, have suddenly received a wake-up call in the form of looming disruptions in oil and gas supplies from Libya, Algeria and Egypt. When anti-government rallies in Libya were met with air strikes and Libyan leader Muammar Gaddafi threatened to bomb oil facilities seized by rebel forces, fears of a Russian energy blockade of Europe suddenly seemed misplaced. It is certainly true that Russia wants to receive decent revenues and valuable economic assets in return for its fuel supplies, whether the buyer is Germany, Ukraine or Belarus. But the Russians have no intention of blackmailing anyone - an allegation repeatedly voiced in the European press over the past fifteen years. Now that Brussels is faced with real blackmail from Gaddafi - who, unlike Russian leaders, has not suffered any discrimination from the EU in recent years - European ideologues are finally waking up to reality. The transit disputes with Ukraine have been fully resolved; transit rows with Belarus are possible, but they will be sporadic; the Nord Stream pipeline network continues to expand and is likely to further increase the EU's reliance on Russian natural gas. This is how the Brussels-based newspaper New Europe sums up the current state of EU-Russia economic relations. It also casts the long-overlooked South Stream pipeline in a positive light: South Stream, whose completion looks much more realistic than that of the limping Nabucco, will bring to Europe an additional 33 billion cubic meters of natural gas. And since shale gas has proved a much less accessible alternative for Europe than expected, price competition between shale gas from the EU and Russia is likely a long way off. Small wonder, then, that the United States has decided to meet its European allies halfway and resume talks on Russia's accession to the WTO. Undersecretary of State Judith McHale recently described Russia's WTO membership as a priority of the U.S. government during a U.S-Russian forum in Boston. The importance of this statement cannot be underestimated, since the United States has been, though in a tacit way, the main obstacle to Russia's entry. Until recently, the U.S. strategy has been to show preference to Ukraine on the WTO issue, a source in the WTO headquarters in Geneva explained. This is why Ukraine is already a member. That said, WTO membership has not saved Ukraine from poverty and utility price hikes. It is the strong economies - the ones that are open to their neighbors - that stand to benefit from WTO membership. And Ukraine clearly didn't have this kind of economy under Viktor Yushchenko and Yulia Tymoshenko. As for Russia, it should try to make the most of Europe's current openness to better integrate into the EU economic landscape. This will make it easier for Russia to sell its products on European markets. But it had better act soon, before this window of opportunity closes. (Source: Ria Novosti)