Eastern Partnership in times of coronavirus
The COVID-19 pandemic affected global markets in a very similar way to the 2008 financial crisis. According to the International Monetary Fund (IMF), the 2020 outlook does not project three per cent growth anymore, but a sharp contraction of the same number (minus three per cent), which will be worse than the loss in 2008.
It is a clear threat for financial stability across the globe. Furthermore, it is important to emphasise that crisis management opportunities differ from region to region, creating greater challenges for countries lacking financial liquidity. Financial reserves are necessary to help the banking system and small businesses to survive the temporary setback. Eastern neighbours of the European Union have to tackle economic challenges: they look for help in any form of financial assets either coming from the East or West. Rivalry for the friendship of Eastern countries is anything but new in the imminent neighbourhood of Russia. The fate of this geopolitical game fundamentally depends on the success of recent crisis management efforts. In the meantime, Russia’s intentions to exploit every situation are to be expected – for instance, the frozen conflicts in Georgia and Moldova or the recent situation in eastern Ukraine. However, the Eastern Partnership still exists and, as recently noted on the pages New Eastern Europe: “[Russian] efforts to derail and destroy it have clearly failed.”
The European Union uses a hybrid approach in terms of its development policy. EU activities are based both on a communitarian perspective (local ownership) and liberal modernisation (deregulation, support of democracy). A mixture of modernisation by democracy building and maintaining stability by giving economic support is a compromise. Coercive diplomacy and withholding financial assets to enforce democratic reforms is not what most EU members and Eastern Partnership (EaP) states are looking for now. The EaP is increasingly heterogeneous and inclusive, supporting not just the front-runners, but all six countries. As Petras Auštrevičius recently said, “There is not only one category, or a one-size of partnership fitting all countries, and the EU shall remain open-minded” for every kind of co-operation with these countries. Armenia, Azerbaijan and Belarus might not seek EU membership, but they still maintained their partnership.
Moreover, we have to realise that, despite Carl Bildt’s and Radoslaw Sikorksi’s efforts in 2009, the EU’s ambition towards the Eastern Partnership has never been high. In the period of 2010 and 2011, the EaP budget peaked around 600 million euros per year. To put it into perspective, resources for the common agricultural policy (CAP) for Poland exceeded 12 billion euros annually. Nevertheless, due to the expected economic hardships caused by the coronavirus pandemic, all foreign aid and development projects are essential for these countries, regardless of how little funds are available.
The European neighbourhood and enlargement policy is now represented by a Hungarian diplomat, Olivér Várhelyi, a vocal supporter of integration with the Western Balkans and someone who is fairly enthusiastic towards the EaP. According to Várhelyi, the European Commission has taken numerous actions on different levels such as responding to immediate needs, providing basic equipment to build healthcare infrastructures, and long-term economic help to provide financial liquidity. Assistance deployed to Ukraine, Georgia, Moldova and some countries in the southern neighbourhood totalled to 3.3 billion euros.
Fighting the immediate consequences of COVID–19, the EU introduced an emergency support package of 80 million euros and 883 million euros for medium-term support of economic recovery. Armenia received 92 million euros for its immediate needs. Elderly people in Shirak, Tavush and Lori regions received humanitarian aid packages. Azerbaijan received 14 million euros in the form of direct aid, and with the help of EU funds, the Vocational Education Schools in several regions purchased equipment to produce personal protection garments for medical staff. Belarus has been the beneficiary of60 million euros to support its short-term needs. Thanks to EU cross-border co-operation projects linking communities in Belarus, Ukraine and Poland, emergency medical services were available to help doctors in hospitals. Georgia received 183 million euros for immediate needs and started more EU-funded projects to produce safety equipment. A Georgian producer of medical textiles has produced 40,000 medical robes within a week after he was able to purchase 12 additional needlework machines. EU projects in Moldova were already in progress providing protection equipment such as gloves and masks for vulnerable people and medical staff; the country also received 87 million euros of direct financial support. In Ukraine, the EU supported resilience building, helped the transition to online education, and supported the fight against disinformation campaigns. Kyiv also received over 190 million euros in financial assistance.
The COVID-19 crisis might bring about significant changes in some of the front-runner countries. The virus revealed the vulnerabilities within Ukraine because oligarchs could not overcome the crisis, and highlighted its remaining dependency on Russia. Russians continue to interfere into the matters of Abkhazia and the Tskhinvali Region (so-called South Ossetia), and the chaos created by the pandemic helped Russian services kidnap opposition figures and supersede the situation little by little. Georgians also fear a possible Russian meddling in the upcoming elections.
The potential drop in domestic support for Putin could be a problem for Eastern Partnership countries as we might witness a more aggressive Russian foreign policy as a result. The same fears arose in Moldova, which was badly affected by the virus – the death numbers are fifteen times higher than in Georgia. In the meantime, pro-Russian political parties were looking for a loan agreement with Russia to finance liquidity problems. The Constitutional Court declared the loan invalid, partly because of its appendix related to Gazprom demands related to gas consumption in Transdniestria and Russia’s idea to finance it with Moldovan public money. The upcoming elections in Moldova will be critical both for Moscow and Brussels. The margins are only about five to ten per cent: public opinion on the Russian loan deal and Transdniestrians with Moldovan passports will probably decide the fate of the next government.
COVID-19 in itself will not change anything in the region, but it can facilitate existing processes in every single EaP country. Therefore, the EU shall be extremely anxious to maintain good relations and remain a strong and credible partner of the eastern neighbour by supporting their economic recovery.
Péter Stepper is a research fellow of the Antall József Knowledge Centre (AJKC) in Budapest and a senior lecturer at the National University of Public Service (NUPS). The views and opinions expressed in this article are those of the author and do not necessarily reflect the official position of AJKC and NUPS.
This text is part of a special expert survey titled “Geopolitics and coronavirus” co-financed through an agreement with the Eastern Europe Department at the Polish Ministry of Foreign Affairs.