The Future of EU-Russia Relations – just a dream?

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The ground had been well prepared by Dmitry Medvedev who had taken over as president after Vladimir Putin’s sudden heart attack in 2014. The demise of Putin had come as a complete surprise. Most had assumed the teetotal, judo black belt was in good health. Medical experts put it down to stress. The economic slump of 2012-13 had taken its toll on the Russian president who had been re-elected president for the third time in May 2012.

Only weeks after he had moved back into the Kremlin, Putin was confronted with a sharply deteriorating economic situation. The price of oil had fallen to below $80 a barrel which was far below Moscow’s expectations when it came to national budget calculations. By early 2014, a number of state enterprises had gone bankrupt and unemployment soared to over 20 per cent. With its coffers empty, the Kremlin had no money left to pay for social security, resulting in massive demonstrations against the regime. Putin had turned to the EU and China for financial support but could not accept the conditions they wanted. The EU had insisted on an independent judiciary. China had pushed for visa free entry for Chinese citizens to live and work in the Russian Far East. As the demonstrations increased in number, Putin had ordered the army and security services to use force, but the soldiers, many of whom had been unpaid for months, had refused to fire on their fellow citizens. In the middle of the chaos Putin suffered his heart attack.

The real Medvedev

Prime Minister Medvedev was the obvious choice to succeed Putin. He had been president before from 2008 to 2012 and had been upset at being pushed aside by Putin. Now he had the opportunity to be his own man. He appointed well-known liberals to the cabinet: Vladimir Milov for energy and Andrei Illarionov for economics. And to the surprise of many, one of his first acts was to release Mikhail Khodorkovsky from prison. The former oil tycoon had been one of Russia’s most successful and progressive businessmen until he fell out of favour with Putin in 2003. Impressed by his analysis of the need for change, Medvedev nominated Khodorkovsky Prime Minister with a broad remit to lead the campaign to modernise the Russian economy.

Khodorkovsky wasted no time in seeking to settle old scores with his enemies. His first speech was aimed at mobilising the public to accept the need for change. Russia had to move away from its over-dependence on oil and gas. It had to develop a market economy based on the rule of law. There had to be an independent judiciary, freedom of the media and a vibrant civil society. And Russia had to secure the closest possible ties with the EU to help both the modernisation process and to recast the security landscape.

The Khodorkovsky programme was very similar to what President Medvedev had written himself in 2010 seeking to jolt Russia into a new approach. Medvedev had run into a brick wall back then; but now he was fully supported his new prime minister. The transformation did not occur overnight and there were many of the elite who sought to undermine the reforms as their privileges would be affected. But the vast majority of Russians welcomed the new course and many émigrés returned home to take part in what became known as the National Revival.

The new tandem reduced bureaucracy by 10% annually for five years. Regional governors were directly elected once more. New political parties were allowed to be established. The Kremlin stopped interfering in the judicial system and media. And the result was that Russia’s economy began to revive. Oil and gas were still important but the energy sector now had access to EU finance, technology and know-how to help modernise its outdated infrastructure. Russia began to produce quality goods (planes, cars, appliances) and develop a decent service sector. The advantages of WTO membership were finally being felt. The health and education systems were overhauled resulting in a reversal of the catastrophic demographic trend. Russian women began to have babies again.

The changes were also apparent in Russia’s foreign policy. The Medvedev/Khodorkovsky tandem stopped interfering in their neighbours’ affairs. Moscow joined EU sanctions in isolating and then toppling the Lukashenko regime in Belarus. A new start was made with Ukraine and the Caucasus. Russia changed course and pushed successfully for an end to the frozen conflicts in Transnistria and Nagorno-Karabakh. A referendum in South Ossetia and Abkhazia led to a new federal arrangement with Georgia. Russia had also introduced considerable autonomy for its own Caucasian republics, Chechnya, Dagestan and Ingushetia. Putin’s grandiose plans for his Eurasia Union were scrapped. Russia now sided with those pushing for greater democracy in Central Asia. Relations with China were improved. Relations with the US were cordial. Both sides had agreed that there was no need for an anti-missile shield following the democratic revolution in Iran in 2015.

EU bound

The EU had watched these changes with a mixture of surprise and caution. Could this be the same Medvedev who had spoken so nicely about the need for change during his first presidency, but who had failed to achieve anything of substance? Apparently this was the real Medvedev, someone who genuinely believed in the need for change and who was now ready, willing and able to implement change. Another surprising move was Medvedev’s appointment of Igor Yurgens as Russia’s ambassador to the EU. Yurgens, the former director of the Institute for Contemporary Development, was well-known in Brussels and had the credibility to convince the EU that this time Medvedev (and Khodorkovsky) could deliver.

The EU had devoted little attention to Russia after Putin’s re-election in 2012.  Little change was expected despite Russia’s accession to the WTO. The Partnership for Modernisation was little more than bland statements as Putin was clearly unwilling to make radical economic or social changes. Both sides had agreed to downgrade the twice yearly summits to once a year. Even then there was little to discuss. The Four Common Spaces were derided as the four empty spaces.

But after the sudden change in Russia’s leadership the EU stepped up its interest and involvement in Russia. The Partnership for Modernisation started to produce results. European companies began to invest once again in Russia, secure in the knowledge that there was the rule of law. Russians flocked to European universities and an increasing number of Europeans went to study in Russia. There was even a revival of interest in Russian language studies. Tourism increased as a result of the new friendly approach of the Russian authorities. This prompted the EU to finally abolish visas for Russians in 2018, the date of the new Partnership and Cooperation Agreement. The negotiations for the PCA had lasted more than a decade with many hurdles along the way. The new agreement contained a clause in which the EU reaffirmed Russia’s European vocation. This was the language used for other countries seeking to join the EU.

Russia now had a fixed goal just as Poland, Hungary and others had in the mid-1990s – EU membership. The Copenhagen criteria had been circulated to all Russian ministries by Khodorkovsky who had set up an inter-ministerial team to monitor progress towards meeting EU membership requirements. Some areas such as abolishing state subsidies and introducing a new competition policy had been very difficult. But the slimmed down bureaucracy was motivated by the exciting new goal, and to the surprise of most observers they not only pushed through the necessary legislation but also oversaw its implementation. Bureaucrats were now well paid and mostly non-corrupt. This was regarded as a major achievement by all.

Poland and other new member states had sent teams of experts to Russia to help with the modernisation process and to assist ministries prepare for EU membership. President Sikorski and President Medvedev had formed a close friendship. Trade between Poland and Russia had boomed and there were more flights between Warsaw and Moscow than any other EU capital except Berlin.

The new Russian government had not only applied to join the EU but NATO as well. This would have been impossible under the Putin regime but it was one of the first moves by Medvedev when he returned to the Kremlin. In a visit to Brussels he recalled the desire back at the Lisbon summit in 2010 to establish a genuine NATO-Russia partnership. This, he acknowledged, had not taken off but now the new democratic Russia wanted to play its full part in European security. There would be no more attempts to divide and rule; no more attempts to push the US out of Europe. Russia wanted to join the alliance as a demonstration of its commitment to Western values. The Russian request met little resistance among NATO members, delighted at the fundamental changes that had taken place in Russia. A target date of 2020 was agreed for Russian membership.

No looking back

2020 was also the year of Medvedev’s re-election. Having stood aside in 2012 he was constitutionally entitled to two more terms. With Khodorkovsky as his running mate (designated to continue as prime minister), Medvedev won a comfortable victory on the first ballot. Shortly after the elections Russia was formally admitted into NATO at a special summit in Moscow. In his speech President Medvedev looked forward to welcoming Ukraine, Georgia and a democratic Belarus into NATO in the near future.

With NATO membership out of the way, Russia concentrated 100 per cent on preparations for EU accession. Negotiations opened in 2020. The twinning programmes between the EU member states and Russian ministries and regions were extremely important. Russian officials undertook three month stages in ministries in Berlin, Prague, Budapest, Madrid and Paris. Swarms of recently retired EU officials helped Russian officials in the finer arts of the common agricultural policy, regional policy, environmental policy and so on. The EU, prompted by the European Parliament, provided a 100 million euro facility to assist the pre-accession process.

The accession negotiations were long and difficult but not as long as the negotiations had been with Turkey, which finally joined the EU in 2018. Russia asked for and secured a limited number of delays with regard to the compliance with EU environmental and social policies. Russia also had to break up its gas giant Gazprom. Medvedev, as the former head of Gazprom, had tried to protect the conglomerate but it had already run afoul of EU competition policy and a break up was inevitable.

The EU had also changed as a result of the 2011 euro-crisis. The eurozone countries had formed an inner core which had moved forward towards a fiscal union dominated inevitably by Germany. The eurozone had increased its membership despite losing Greece in early 2012. Sweden, Denmark, Poland, the Czech Republic, Hungary, Latvia and Lithuania were all members of the inner circle. There were also signs of a change of heart in the UK, whose economy had declined steadily in the past decade. The new British Prime Minister, Nick Clegg, was contemplating a dual referendum on membership of the euro and Scottish independence. The Scots had already voted in favour of independence in 2018.

The EU President, Carl Bildt, combined the old offices of President of the Commission and President of the Council. This had been a major step forward in reducing the democratic deficit within the EU. In the first Europe wide elections for “President of Europe” in 2022, Bildt had defeated the socialist and liberal candidates by a clear margin. Bildt had worked hard to improve EU-Russia relations, a task made much easier by the path being followed by the Medvedev-Khodorkovsky tandem in Moscow.

With the historic signing ceremony over, Bildt hurried to the airport as he had to fly on to China for a meeting of the G3. The US, China and the EU had started these informal meetings a few years ago as the G20 had proved ineffective in dealing with the major global challenges. As the plane approached Beijing after crossing the Eurasian heartland Bildt woke up with a start. Had he been dreaming?

Fraser Cameron is the Director of the EU-Russia Centre, a Brussels based organisation focusing on relations between Russia and the European Union.

This text originally appeared in New Eastern Europe 1(II)/2012