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After a long absence, we come back with an insightful analysis of the implications of the postponement of the implementation of the Trade part of the EU-Ukraine Association agreement by guest authors from Birmingham University

Rilka Dragneva and Kataryna Wolczuk

Few bilateral agreements have had such a turbulent history and implications as the Association Agreement between the EU and Ukraine. The refusal to sign the agreement by then president Yanukovych triggered massive protests in Ukraine resulting in his overthrow in February 2014. This in turn provoked Russia’s response: annexing Crimea and fuelling separatism in Eastern Ukraine, including direct military incursion in August 2014.

Importantly, the Agreement envisages a Deep and Comprehensive Free Trade Area (DCFTA), which entails tariff changes but also provides for Ukraine’s integration into the EU single market. Russia has objected to both, alleging potential damage to its economy. Clearly, an important aspect of this ‘damage’ lies in the fact that the DCFTA precludes Ukraine’s membership into the Eurasian integration bloc, something which Russia has actively sought and presented as a viable (and indeed preferable) alternative to integration with the EU.

Asserting its independence, Ukraine signed the Agreement in June 2014. Russia’s opposition to it intensified over the summer leading to its delayed ratification. Trilateral EU-Ukraine-Russia negotiations continued against the backdrop of military intervention and threats of a trade war against Ukraine. Indeed, Russia’s demands have been far-reaching including a revision of the already signed agreement. The Russian government has in fact drafted amendments to substantive terms in somebody else’s agreement.

The tri-lateral negotiations resulted in compromise: the Agreement was ratified by the Ukrainian and European parliaments, but implementation of the key trade-related part (the DCFTA), was suspended until the end of 2015 due to ‘Russia’s concerns’. This middle ground is already proving to be unstable, with Russia reinforcing its demands for legal revisions and the exclusion of 2,000 commodities from the free trade regime. To assert its position, it has imposed tariffs with suspended application to mirror the EU’s approach. Furthermore, in a spectacular U-turn, it seems that at least the outgoing Commission President Barroso is not averse to the thought of revising an agreement that has been signed and ceremoniously ratified.

Who favoured this ‘compromise’ and why it was adopted still needs to be fully clarified. EU officials indicate that it was requested by the Ukrainian side concerned about the economic and social implications of Russia’s trade sanctions. Similarly, there was pressure from EU member states putting a premium on ‘appeasement’, or the ‘normalisation’ of relations with Russia and an end to the costly spiral of reciprocal economic sanctions. Despite what is undoubtedly a complex background story, the postponement of the agreement was labelled ‘business as usual’. If anything, the EU’s response to Russia’s pressure for a say on EU-Ukraine’s relations was presented as a success, on the grounds that ratification had taken place without ‘a single word having been changed’. As Elmar Brok, a veteran member of the European Parliament put it:
‘… this process [i.e. negotiations] has been concluded. And the Russians are part of it. They were there for the negotiations. It’s all coming into force. It’s just being implemented incrementally, as is often the case with contracts. From the legal point of view, the whole contract will be enforced in all its details. It’s just that there are often transitional arrangements. That’s normal in business.’

There is no doubt that since the start of the crisis, the EU has found itself in a particularly difficult position where it has tried to balance principles, economic interests and complex constraints. Yet, in opting for this latest compromise, Brussels has performed a U-turn with potentially high and diverse costs without securing a lasting resolution of the core issues in the post-Soviet region. Certainly many – the present authors included – have pointed out the need for a comprehensive overhaul of the EU’s Eastern Partnership policy so as to address a range of serious concerns. However, a last-minute decision announced three days before the Association Agreement’s ratification and taking many top EU officials by surprise hardly constitutes such a review. Allowing Russia to dictate EU-Ukraine relations does not indicate the application of a comprehensive, sustainable strategy. Whether it is born out of a pragmatic trade-off or a tactical retreat, it is a short-term fix based on a set of shaky assumptions. Its far-reaching implications, however, will still need to be confronted.

First, allowing Russia to participate in the EU’s negotiations on a bilateral agreement with another country sets a dangerous precedent. It is a blatant reversal of the EU’s earlier position. It opens a minefield for international lawyers. Even more importantly, it undermines the principle of dealing with Ukraine as an independent country: regardless of its ‘semantic framing’, the EU has accepted Russia’s right to determine the essential terms and the limits of its post-Soviet neighbours’ integration choices. The potential application of this precedent to other neighbours is obvious, but also has implications for relations further afield involving Turkey or China. Importantly, the EU likewise concedes to Russia’s double-standards in international relations: while Putin complains that nobody talked to Russia about the potential consequences of the DCFTA, he conveniently forgets that the Eurasian Customs Union was launched in 2010 with no consultation with the EU and no adequate transitional arrangements resulting in significant damage to EU businesses.

Second, it is not only the inclusion of a third party as such, but also the mode and the professed reasons for accommodating its preferences that are questionable. Russia’s justifications for its ‘trade concerns’, have been highly spurious and are, as Michael Emerson put it, ‘a non-story’. For example the problem of Russia being ‘swamped by EU goods’ can be addressed by the proper application of rules of origin. The EU has been involved in consultations with Russia on the subject for many months now making a strong case as to why the DCFTA need not disrupt existing trade arrangements. It is unclear how fifteen more months of discussions will help resolve a problem that in its essence is neither legal nor technical. Above all, Russia’s concern is a thinly veiled contestation as to who the rule-setter in the post-Soviet space is. Russia principally objects to the EU expanding its regulatory framework – via the Association Agreements – to Russia’s perceived exclusive backyard, the post-Soviet space. This is especially so given the clash of EU policy with the expansion of Russia’s own economic integration project. Faced with a complex bundle of economic and geopolitical concerns, the EU conceded to pressure rather than sound argument.

Third, EU statements on the deal refer to the peace process in Eastern Ukraine, implying that it amounts to a necessary sacrifice for the sake of ensuring a peaceful resolution between the separatists and the Ukrainian government. Its political acceptability is justified against the backdrop of a military conflict in which Russia has been a party. However, Moscow has adamantly refused to acknowledge its involvement, endeavouring to present the conflict as a local, bottom-up rebellion. Securing peace and saving human lives is an objective one certainly cannot disagree with; however, as it stands, the deal offers few guarantees and carries considerable costs. While Russia refuses to acknowledge its role in the conflict, the deal legitimises and validates Russia’s ‘hybrid war’ strategy: by instigating conflict, Russia is able to extract concessions from the EU for the sake of a ‘contribution to peace’.

Fourth, the EU’s actions rest on the assumption of a ‘fixed and stable agreement’, one that reflects and accommodates Russia’s preferences. It assumes that agreements and rules will be implemented. The source of this optimism – given Russia’s track record of behaviour – is unclear. Indeed, it has already been revealed that Russia is not satisfied by the mere delay of the Agreement’s implementation. Furthermore, the consensus on what constitutes ‘implementation’ might be overestimated given Putin’s reference to ‘any legislative implementing acts under the Association Agreement’. There is no reason to assume that Russia’s decision to trigger sanctions will be based more on law and shared understanding than in previous instances. The EU’s longing for ‘business as usual’ obscures the fact that this is the last thing it is and that Russia’s claims are derived not from legal agreements but from claims to a sphere of influence.

Fifth, while the need to ensure the compatibility of the DCFTA with interregional linkages is understandable, the EU has shown a sudden ready acceptance of post-Soviet integration structures. After many years during which the EU had raised valid concerns: for example, about the degree to which the Eurasian Customs Union acts as an economic rather than a Russia-steered, political entity with an unclear division of competences, or the degree to which it contributes to trade liberalisation and WTO commitments implementation. We, amongst others, have criticised the EU’s lack of strategic engagement with the Eurasian project, yet the show of caution has not been entirely unjustified.

If anything, Russia’s policies towards Ukraine amplify these concerns: the Kremlin has in effect (and with its partners’ consent), destroyed the Eurasian Customs Union by imposing unilateral trade measures on Ukraine. Recent statements of Commissioner Füle, however, reveal the EU ‘warming up’ to Eurasian structures, based on a presumed functional and rule-based equivalence of both regimes. While the Eurasian structures certainly contain promise, its actual delivery is circumscribed by a range of problems of institutional design and implementation.

The EU continues to state that regional economic integration frameworks need to contribute to trade liberalisation and WTO compliance. Yet, ironically, Russia’s threats to Ukraine – rather than the success of the Eurasian project itself – might end up earning it external recognition just as these very same threats undermine it internally. Furthermore, while the EU might be willing to enter into a comprehensive free trade area ‘from Lisbon to Vladivostok’, there is actually no certainty that free trade is what Russia wants and pursues.

On balance, it is hard to avoid the conclusion that by agreeing to this pragmatic, ‘principles-lite’ deal, the EU accepts and legitimises a particular way of conducting international relations favoured by Russia. Acquiescence to this pattern of behaviour comes at the very time when Moscow’s actions vis-à-vis Ukraine amount to a shake-up of the international order. The EU’s pragmatism has not been lost on the people of Ukraine, with the prevailing interpretation on social media being one of ‘having been abandoned’. For an outgoing team of the European Commissioners to present this as ‘business as usual’ while leaving a series of ‘landmines’ for future interactions between the EU and Russia should be a source of deep concern. Yielding to Russian anxieties rather than comprehensively addressing existing questions, opens a raft of new issues. They need to be confronted rather than obfuscated behind the rhetoric of normality.

A shorter version of this commentary has been published in The Conversation

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On 6 June, in the municipal house of the city of The Hague, a roundtable debate took place, entitled ‘Towards a new parliament? The European Parliament after the 2014 elections‘. The invited speakers featured both prominent academics like Christophe Crombez (Stanford University/University of Leuven) and Claes de Vrees (Univeristy of Amsterdam), politicians like Wim van de Camp (a Member of the European Parliament from the Christian Democrats), and the expert Tom de Bruijn (former Permanent Representative of the Netherlands to the EU and current member of the Dutch Council of State, also an external teaching Fellow at the Institute of Public Administration). The debate was organized by the Institute of Public Administration of Leiden University and the Standing Group of the European Union of the European Consortium for Political Science Research (ECPR) with the support of the European Commission Representation to the Netherlands, the Dutch Minisitry of Foreign Affairs and the Hague municipality which co-sponsored the debate. The roundtable took place in the large atrium of the municipality, while somewhere upstairs negotiations on the new city government were still under way.

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Most of the public were academics – the debate was part of the 7th Pan-European Conference on the EU – but, quite amazingly, people from all walks of life showed up as well – from secondary school students to journalists to retired civil servants. If anything, the full hall and lively discussion showed that debating the future of Europe with a broader public is not only necessary, but also possible.

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The moderator, Joop Hazenberg, asked a number of questions about the speakers’ assessment of the results of the European Parliament elections, their vision of the future priorities and the future President of the Commission. Then there were questions from the floor.

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Two of the speakers – Crombez and de Vreese were more positive than many may have expected on the entry of populist parties in the European parliament, rightly observing that these parties represent views that also have their place and are healthy for the debate. Van de Camp suggested that low turnout in EP elections is the result of lack of education on the EU in secondary schools, a view which was challenged by a member of the audience who was a secondary school pupil.

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De Vreese shared results from his public opinion work which suggest that even more liberal parts of the Dutch electorate are negative towards some member states citizens. This left the audience wondering what the current views and expectations of the Dutch public are with regard to the Internal market.

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Van de Camp was quite optimistic about Dutch companies taking advantage of the final opening of the market for services, yet did not respond to questions on how this would affect the free movement of labour in the Netherlands. De Bruijn highlighted a common energy policy as an urgent priority for Europe. The questions touched on EMU, human rights and the EU, internal market and the selection of the new Commission president. On the latter, the members of the panel were divided: while Crombez felt that making Mr. Juncker the next Commission President would strengthen democracy in the EU, de Brujin pointed out that Mr Juncker was not even on the list of the European People’s Party candidates. With this, a lively debate was finished as one of the highlights of an even livelier conference. This format mixing politicians and academics and using a public venue seems to hold some promise for all involved: academics, politicians, experts and the public.The very exchange of views is creating a better awareness where democracy in the EU is weak and what we can do to change this.

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Prime Minister Mark Rutte just could not bring himself to muster any real enthusiasm about the EU in his interview last night on Nieuwsuur. Ostensibly the purpose of the interview was to mobilise people to vote in the upcoming European Parliament elections.  At least that’s what I think. Having listened to him, I am not sure what the purpose was. If I had to make up my mind whether to vote or not, based on his arguments, I would definitely stay home.

When asked at the start to say on a nutshel the most important reason why the EU is important for the Netherlands, he waffled on unenthusiastically about the EU helping to create jobs…well, if you organize things well of course and for example…a trade agreement with Canada that would help a lot… Incoherent, unconvincing and down the same perilous road of giving no value driven justification for the existence of the EU beyond trade. Then he said that sovereignity and legitimacy in Europe are vested not in the European Parliament, but in national parliaments. He went on in the same way to drop heavy hints that he also often found the EU too intrusive in domestic affairs.

This from the same Prime Minister who was reported to have strongly advocated the creation of a stronger European Commission competences on national budgets and automatic sanctions for member states that violate common budgetary rules.

So, I guess there is no democratic obligation for the Prime Minister to be pro-European. That’s fine, although I wish that he did not go on TV to make his lack of enthusiasm so painfully obvious just before the European Parliament elections. Also strange if you consider that employers and entrepreneurs have launched a campaign to support the EU, including TV ads and posters and cars everywhere. And the VVD, Rutte’s party, is supposed to be representing the entrepreneurs’ interests to a considerable extent. All of that might be just between him and his party’s support base. But I still cannot get over the hypocrysy of playing the Eurosceptic card at home and advocating all kinds of strengthened oversight measures in Brussels. What does he really believe in?

A guest post by Rilka Dragneva

The death of the Commonwealth of Independent States (CIS) has been foretold many times during its history of (now) more than 20 years. Dissatisfaction with its weak and confusing institutional structure and a failure to promote effective regional integration has become an almost permanent background to its existence. Despite the remarkable resilience of the CIS, there are several signs suggesting that the current crisis is more fundamental and extreme than previous shake-ups.

Firstly, the present crisis focuses on a founding member of the CIS, Ukraine. It is important to remember that the very CIS formula came into being at the secret Belovezhskaia Pushcha meeting between Presidents Yeltsin, Kravchuk and Shushkevich of 8 December 1991 in order to accommodate Ukraine’s refusal to participate in a reformed Union,[i] and was very much ‘thrust upon’ the other former Soviet republics. Arguably, Ukraine was instrumental in shaping the design and ultimately the limits of the CIS in its gradual institutionalisation in the early 1990s. It did not sign the Charter of the CIS in January 1993 but took an active role in its drafting and, as President Kravchuk stated, considered itself a ‘member of the CIS, actively participating in its improvement’.[ii]

In March 2014 the Ukrainian authorities announced the termination of their presidency of the CIS and their intention to leave the organization altogether. Indeed, a bill on the denunciation of the CIS Founding Agreement was introduced into the Rada by MP Boris Tarasyuk. Georgia had withdrawn from the CIS previously, in August 2008. In legal terms, both countries’ membership was of a peculiar nature, as neither had fully met the conditions of the Charter requiring 1) participation in the founding agreements of December 1991 (fulfilled by Ukraine but not by Georgia), and 2) ‘assuming the obligations under the Charter’ within a year of its adoption (fulfilled by Georgia but not by Ukraine). Nonetheless, the importance of the withdrawal of a founding member of the organization could not be overstated in the CIS world of ‘casual legality’ but high political symbolism.

Secondly, Ukraine’s pending withdrawal rests on a charge that the CIS and its institutions have failed to address the Crimean crisis, that, in other words, rather than exercising its most basic function of promoting dialogue, the peaceful resolution of disputes and cooperation, the CIS has turned into Russia’s puppet. In the beginning of March 2014, the Ukraine had called for an extraordinary meeting of the CIS Foreign Ministers Council in Kiev to discuss the crisis. The request was denied by the Committee of Permanent Representatives, which instead approved an alternative proposal for a meeting of deputy Foreign Ministers in Minsk. This was deemed as unacceptable by Ukraine, which challenged the de jure as well as de facto ability of the CIS to function.

Indeed, it is clear that the multilateral structures of the CIS have been marginalised and that the response to the crisis has been driven by one-to-one dialogue at the highest level. When the Foreign Ministers Council met in Moscow on 4 April, it dealt with the vacant presidency of the CIS, but did not engage in any formal Ukraine-related effort. In fact, the principal decision-making bodies of the CIS, the Councils of Heads of State and Government, have not held a formal meeting since 25 October 2013 and 20 November 2013 respectively.

According to the Moldovan Foreign Minister Natalia Gherman, Ukraine’s March request was supported only by Kishinev; in a recent interview she noted that the situation called for a ‘very thorough analysis and evaluation of what has happened within the CIS’. Other leaders were predictably more restrained. The Belarusian President Lukashenka recently described the situation as ‘not very simple’, but proceeded to reject a break-up of the organization despite half-heartedly acknowledging problems. Meanwhile, as argued by Farkhad Tolipov, Russia’s disregard of multilateralism was not lost on the Central Asian countries.

President Putin held a meeting with the Presidents of Armenia, Belarus, Kyrgzstan, Russia and Tajikistan on 8 May 2014 – all of them members of the Collective Security Treaty Organization. Rather than a formal gathering of the organization, this was a ‘talking down to’ at Russia’s invitation, and Kazakhstan’s absence is yet to be deciphered. Nonetheless, the meeting betrayed the concerns of even loyal supporters of the Russian position – like Armenian President Sargsyan – about the need for more coordination and multilateralism in responding to foreign policy crises.

Thirdly, the Ukraine crisis challenges the very premises of the post-Soviet settlement: the principles of national sovereignty, independent statehood, and territorial integrity embodied in the CIS founding agreements. As Tolipov notes, unlike the Crimean case, the secession of South Ossetia and Abkhazia from Georgia in 2008 did not lead to annexation by Russia. And while the fact of Crimea’s annexation has largely been accepted by the CIS member states, their reaction has not been as definite, unambiguous and resolute as Russia might have wanted. Certainly, for many of them – especially those with a sizeable Russian minority – the post-Soviet settlement is not a safe and secure option anymore.

Fourthly, Russia’s specific interest in the CIS is not easy to fathom. While Ukraine has certainly been very selective in its participation in the organisation,[iii] Russia has been discerning too: for example, it never ratified the 1994 and 1999 Free Trade Agreements concluded within the organisation. In March 2005, Putin stated that ‘the CIS never had any supertasks (sverkhzadach) of an economic nature, any integration tasks in the sphere of economics’. As Tolipov aptly points out, in his 18 March 2014 speech, Putin delegitimized the CIS even further: by arguing that Ukraine’s secession from the Soviet Union was illegal, he also challenged the very legality of the Commonwealth. Perhaps not incidentally, Putin’s latest address to the Federal Assembly, on 12 December 2013, mentioned the CIS only in relation to educational cooperation. Putin’s recent agenda has focused primarily on building a Eurasian (Economic) Union, implying the hollowing out of previously important organizations, such as EvrAzES. While some continuity will be provided within the Eurasian Economic Union, the future status of non-Customs Union members of EvrAzES remains unclear.

Yet, despite Russia’s fairly opaque position on the CIS, it has developed a key interest in the 2011 Free Trade agreement, and particularly in its perceived incompatibility with Ukraine’s signature of the Deep and Comprehensive Free Trade Agreement with the EU. In a newly discovered concern for legality (and in contrast with previous casual attitudes to CIS agreements and, indeed, Putin’s above-mentioned statement on the organisation’s limited economic role), Ukraine was accused of violating Article 13 of the 2011 CIS FTA.

It is evident that despite Foreign Minister Sergei Lavrov’s assurances of ‘not keeping anyone in the CIS by force’, Ukraine’s possible exit from the organization needs to be viewed in the context of the ‘carrot and stick’ policy employed in securing Putin’s geopolitical vision. Given the ‘variable geometry’ principle in signing agreements in the CIS, a withdrawal from the 8 December 1991 Agreement would not automatically imply an exit from other arrangements. Indeed, the stated intention of the Ukrainian Foreign Ministry is to analyse individual agreements and determine ‘the feasibility of Ukraine’s further participation’ in them. Yet, this decision might require a more complex cost/benefit calculation. As Viktor Medvedchuk, a well-known protagonist of Russia’s interests in the country noted: ‘Ukraine’s withdrawal …will lead to a sharp decline in investments in the Ukrainian economy from CIS countries, primarily Russia. Ukraine’s withdrawal from the organization will also mean leaving the CIS free trade zone’. Thus, Ukraine’s approach of selective withdrawal from its CIS commitments might not work without advances in the geopolitical, EU-Russia stalemate resulting from the current crisis.

What does all this mean for the CIS? Is a regional crisis of this depth and magnitude likely to doom it as an organisation? This author’s bets – at this stage in the developments surrounding the Ukrainian conflict – are on its survival. Firstly, the resilience of the CIS is embedded in its extremely loose institutional framework and the ability of its members to define their membership as they see fit. In fact, in comparative terms, the CIS is the ultimate institutional chameleon. Secondly, in the two decades of post-Soviet regional integration, Russia has proved that it rarely ‘keeps all its eggs in one basket’. It has invested in a range of regional organizations, and despite the current salience of the Eurasian Economic Union, there is no reason to assume that other vehicles will not be assigned appropriate uses. Currently, the CIS is also the only Russia-centred grouping incorporating countries like Azerbaijan and Turkmenistan. Thirdly, the long-term tendency of region-level post-Soviet institutional development has been one of strong continuity. Organisations are frequently and incrementally reformed or renamed, but rarely completely reinvented, as aptly demonstrated by the evolution of the Eurasian Customs Union’s institutional regime.[iv] Thus, it is unlikely that the CIS will disappear without a fundamental and deep reform of the underlying political, economic and socio-legal orders within the majority of its member states. Nonetheless, there is little doubt that recent events will significantly deepen the crisis of purpose and credibility the CIS had been experiencing beforehand.

This analysis has been first published here in the blog of the Centre for Russian and Eastern European Studies of the University of Birmingham, on 12 May 2014

[i] E Walker, Dissolution: Sovereignty and the Break-Up of the Soviet Union (Rowman & Littlefield, Oxford, 2003)

[ii] Diplomaticheskii Vestnik, 3-4 (1993): 42

[iii] R. Dragneva and A. Dimitrova, ‘Patterns of Integration and Regime Compatibility: Ukraine between the CIS and the EU’, in K. Malfliet, L. Verpoest & E. Vinokurov, eds., The CIS, the EU and Russia: Challenges of Integration (Palgrave/Macmillan), 171-201

[iv] R.Dragneva and K. Wolczuk, ‘Commitment, asymmetry and flexibility: making sense of Eurasian economic integration’, in R. Dragneva and K. Wolczuk, eds., Eurasian Economic Integration: Law, Policy and Politics (Edward Elgar 2013), 204-221

Antoaneta Dimitrova:

From our archives: The highlights from the thesis that has been a joint winner of the Brasz prize for best thesis in public administration:

Originally posted on eurosearch:

With this new series, we aim to present the highlights of promising research conducted by Master’s students at the Institute of Public Administration. As we all know, Master’s theses an range from a simple exercise in independent research to interesting and innovative research that often represents the first steps of a young scholar. While we do not claim the findings of such theses take on board all the debates in the scientific community as a PhD thesis is expected to do, we expect their insights and conclusions can inspire new debates.

Today, the first summary of findings offered, is based on a Master’s thesis just defended in our institute, by Nina Straathof. The thesis asks the question whether internet use by governments, in the form of e-participation initiatives, contributes to reduction of corruption. The research uses the United Nations index for e-participation to define (changing) levels of e-government and World…

View original 269 more words

Part II of the analysis by Klaudijus Maniokas and Darius Žeruolis

The Ukrainian story and the Eastern Partnership Summit in Vilnius

The still unfolding Ukrainian story is a good demonstration of the strengths and failures of the EU‘s neighborhood policy. Eastern Partnership Summit in Vilnius at the end of November 2013 did not result in the signature of the Association Agreement with Ukraine. EU leaders have indeed tried hard to persuade the Ukrainian President to sign, but at the end he instead chose the Russian offer of financial help. Far from being a failure of the EU alone, this refusal of Yanukovych unleashed the biggest protests in Ukraine since the Orange Revolution in 2004. They could result in a change, which will probably be more important than a formal signature of the Association Agreement. Most likely, much of this agreement under Yanukovych would have become yet another Potyomkin village, a fake. EU insistence on the European norms and consistency of the approach won hearts of many Ukrainians and still proves attractiveness of the EU.

This also demonstrates the positive impact of the Eastern Partnership in terms of density of the relationship between the EU and Ukraine as well as other EaP countries. Since the launch of the Eastern Partnership, this relationship has reached many dimensions far beyond trade and diplomacy. It is about visa-free regime and mobility in general, which are so much valued by people in in the EaP countries. On the other hand, it is also about various infrastructure projects, economic relations and civil society. The problem is, however, that this increasing density of the relationship is not turning into the sufficient influence and impact of the EU over these countries. Thus Yanukovych decided not to sign the Association Agreement, and Armenia withdrew too. European Union lacks any impact on Belarus and the situation with democratic procedures and institutions is worsening in the region. EU‘s engagement is also not being felt in terms of financial investment from the member states’ companies.

Therefore there is also not so much positive side of the whole story. First, it seems that nobody in the EU is able to understand motivation of the current Ukrainian leader and his entourage. Though nobody expected meeting the EU requirements for signature by Ukraine to be an easy ride, most of the EU leaders and diplomats nevertheless were expecting an eventual signature of the Agreement in Vilnius. However, post factum most of them would have agreed that Yanukovych came to Vilnius without any intention to sign. Where then have all the investments into knowing Ukraine, such as sixteen meetings with Yanukovych held by the high representatives of the European Parliament Kwasniewski and Cox gone? Was this effort enough? The main value added of the Summit in Vilnius was probably in showing of how little most of the EU leaders knew or cared about Ukraine and the Eastern side of Europe. As one of them confided afterwards, the Ukrainian President behaved as a visitor from a different civilization. He and the EU leaders spoke different languages and, as one diplomat noted, Yanukovych did sense that he does not belong to the European club.

This lack of knowledge and intelligence is also quite obvious in the ongoing story of protests in Kyiv and the EU‘s stance towards the unfolding developments there. The EU‘s stance towards Russia and its policy towards Ukraine too was and is far from what it ought to be. The EU denounced aggressive, but successful Russian policy to dissuade Ukraine from signing an agreement with the EU. While the EU rightly refused to engage in the bidding game over Ukraine, its policy remains rather passive. Instead of actively shaping the events, the EU appears to limit itself with a kind of monitoring. Apart from several high level visits, including visits of Catherine Ashton (whose attention to Ukraine and the region is just a small fraction from the resources spent on Iran and Middle East in general) and the statements of the EU External Affairs Council, there seems to be very little of active engagement policy through the political parties, opposition movement, media, economic elite and other means. To put simply, the EU both lacking the active policy tools and is shy to use them.

The EU is failing to properly address Russia. There is a growing consensus about increasingly negative role of Russia in the region. This awareness is a certain achievement, but, as with the whole Eastern Partnership policy in general, it so far has not been translated into any clearer policy and action. EU obviously has only limited tools to address Russia and its influence in the Eastern Partnership region, but on the other hand is also not trying to create them.

There are many factors behind this reluctance to active engagement. One of them is clearly a past success of the enlargement policy based on a soft power of attraction. It is a cosy excuse not to engage into a fight and instead to indulge oneself with a praise of own beauty and virtue.

Assessment of the possibilities and potential of the EU to transcend the limits of its splendid soft power so that it acquires a certain harder shape is beyond the remit of this essay. Instead, we focus on what is already under disposal of the EU as it is. One of such tools is the Association Agreement. Ukraine‘s recent complaints about its costs have been dismissed by the EU far too quickly and easily. We also think that part of the Ukrainian problem is an unfavourable cost-benefit ratio of the deal proposed by the EU.

Association Agreement: a well-intended, but nevertheless bad deal?

EU’s Association agreement of a new generation with the so called Deep and Comprehensive Free Trade Agreement in its core was supposed to be a major if not the main tool of the Eastern Partnership Policy. The mere promise of the conclusion of such an agreement meant to encourage the Eastern Partnership countries to reform. It has offered a liberalized trade regime with the European Union and gradual convergence of the regulatory regimes in the aspiring countries to the EU standards. In the regulatory scope, ambition and detail it went far beyond any existing association agreement of the European Union. The agreement initialled but not signed with Ukraine is almost 1000 pages long and includes annexes with the references to the concrete EU legal acts and/or their provisions. In such a way implementation of the agreement meant to create a stable and EU-like regulatory regime, which was supposed to boost investors’ confidence and lead to lower risk and higher investment and thus economic growth in general.

To sign an agreement of this kind would be logical for countries having an EU membership perspective, such as the Western Balkan states. Paradoxically, they have much weaker agreements in their scope and ambition as the scope and ambition there are built through the accession track. For countries like Ukraine the EU regulatory standards have hardly been goals in themselves. And this should not be surprising, as the EU regulatory framework has never been intended to serve as a developmental framework. By its nature, it is a result of long years of slow and occasionally painstaking negotiations between the EU member states over externalities of cross border cooperation. The EU acquis communautaire reflects the preferences of rich consumers’ societies, which are willing to pay for high protection from health, safety, environmental and other risks. This protection is costly, and so are costly environmental, consumer safety and other standards contained in the Association agreement.

Provisions of Association Agreements as such therefore cannot be sufficiently motivating factors. Their current form was shaped by the EU‘s trade power and willingness to project the EU regulatory regime worldwide. In short and medium term it is beneficial to the EU and might be beneficial to many, but hardly to all third countries.

Association Agreements in their current form were developed building by and large on the enlargement template and unfortunately without a serious consideration about how they could be implemented in the Eastern neighbourhood. Despite many calls and internal discussions within the European Commission after the big bang enlargement in 2004, the EU institutions have not yet reviewed the acquis to establish its core with a clear developmental value, that is, providing advice on the sequencing of change for the aspirants who start approximation from significantly lower levels of development than those in the EU. During negotiations with Eastern neighbours the content of legally binding EU norms was mainly left to the DG Trade of the European Commission to determine. And there is no evidence to state that this selection was made with due sensitivity to development and foreign policy objectives of the EU.

What could be done: moving away from the acquis

In order for its enlargement and Eastern neighbourhood policies to become effective, the EU should abandon its current theory of change, which is based purely on EU’s attractiveness and develop more nuanced paradigm, especially towards the laggards of Western Balkans and Eastern partnership countries.

First, moving away from the acquis, the EU should emphasise more issues related to state building, fundamentals of market economy and investment promotion. The start of large scale transposition of the EU norms during the fifth EU enlargement into Central Eastern Europe coincided with accession negotiations, while the beginning of negotiations was conditioned by achievement of a functioning market economy status by the candidates. Out of the list of current candidates, potential candidates and Eastern neighbours, by the most recent Bertelsmann foundation transformation evaluation and European Commission stringent assessment only Iceland and Turkey are functioning market economies. In terms of maturity of their democratic credentials, none of them, save Iceland, qualify as democracies in consolidation, while their performance ranges from hard-line autocracies (such as Belarus and Azerbaijan) to defective democracies (only Serbia and Montenegro are approaching the category of consolidated democracies). Consequently, the focus on the first two Copenhagen criteria and addressing the issues of socio-economic development, which do not directly feature in them should outweigh the acquis. The EU has already started changing the emphasis, for example, during the visa liberalization negotiations with Western Balkan countries and Eastern partners as well as by frontloading chapters covering the rule of law, judiciary and fundamental rights, and justice, freedom and security (known as the “new approach”) in the accession negotiations with Montenegro and stating clearly that progress in these and flanking policy fields will determine the overall pace of accession negotiations. While this is welcome and necessary, in many countries it alone will not be sufficient to ensure stability and lasting continuity of reforms.

In potential candidate and Eastern partnership countries elections and therefore public administration too are still affected by the winner takes it all approach. The EU could and should do more in changing this situation by ensuring fair legal processes and vigorously protecting European integration professionals in the public administrations from unjustified dismissals. This is not least necessary in order to protect the European tax payer investment provided through the various forms of technical assistance and twinning. It is also about limiting the state capture. It could be the main goal and even a new theory of change of the EU. A post visa liberalization agenda of state building closely linked to monitoring of commitments of aspiring countries could provide sufficient motivation for aspiring countries for implementation.

Second, in order for EU to be successful, in some weaker potential candidate and Eastern partnership countries the European Commission will no longer be able to exercise its role as an arbiter of the progress made against the Copenhagen criteria. It will have to complement this role by active engineering on the ground, i.e. to become a player and a broker and to facilitate the necessary changes on the ground, through micro-management, where and when necessary Determination and efforts in 2012 – 2013 by the European Commission in assisting the Albanian government to meet the requirements for the candidacy status and the negotiating process with Montenegro are the first examples of such boundary crossing by the European Commission to assume the player status too.

Third, for its technical and financial assistance to become really effective, the EU needs to begin planning long-term to support the agents of change and be able to respond to rapidly evolving needs. Here there is much to be learned from the USAID and Nordic agencies for developmental assistance – for example, SIDA or DANIDA. Also, it should ensure availability of various rendered expertise after the end of the projects. Almost nothing remains of various project products and websites in particular afterwards. The EU delegations should ensure that all accumulated materials are available publicly and freely.

Fourth, the EU representations in the capitals of aspiring countries should be made up to the task. In their daily work, they seem to be hindered by still existing division between the EEAS and Commission’s delegates and lack of motivation and determination to make a difference. Staffing policy should suit the concrete challenge too. For example, if Bosnia and Herzegovina’s internal divisions can be solved at all, they should be tackled by political heavyweights enjoying full support of the member states and determined to achieve the results.

Fifth, as it is difficult now to change the already negotiated agreements, which have been also initialled with Moldova and Georgia, their implementation could still be geared towards the parts directly related to developmental aims and towards development in general. Procedurally, it should be possible to achieve this focus through jointly developed and agreed Association Agendas specifying implementation priorities and further policy and legal act-specific analysis of the cost-benefit ratio.

Focus on the socio-economic fundamentals is relevant to Western Balkan countries too, but especially so to Albania, Bosnia and Herzegovina and Kosovo, where issues of fiscal sustainability and economic governance are urgent in order to make them less reliant on foreign aid and afford the cost of acquis communautaire. Recent protests in Bosnia are a vivid demonstration of this need.

The European Commission’s intension to deepen the dialogue on economic governance with enlargement countries in order to assist them to fully meet the economic criteria and thus to enhance their competitiveness and job creation, is a step forward. Finally, EU cannot promise membership to any third country that it wants to influence. A passive attitude suggested by the seeming success of the EU enlargement policy could be counterproductive, as it may lead to disillusionment with the EU. Soft power of attraction has to be paired with a harder power of persuasion and dissuasion as well. Domestic change in the EU neighbourhood requires both.

 

 

A post in 2 parts, by Klaudijus Maniokas and Darius Žeruolis,

EU enlargement policy is an important tool of the EU‘s foreign policy. However, its limitations are increasingly obvious and it is hardly a recipe for a successful EU foreign policy in general. It is still important in Western Balkans where a number of countries are showing willingness to change at a prospect of the EU‘s membership. This policy is a glue which holds the region and some of its states together. Croatia‘s success also demonstrates viability of the membership offer. Montenegro and Turkey made a step forward in the second half of 2013. The next shooting star of the enlargement process is Montenegro. Under the Lithuanian Presidency of the EU Council it made big progress in accession negotiations by opening another five chapters, including the most difficult ones related to fundamental rights and judiciary. This is a real demonstration of the magnetic transformative power of the EU and confirmation of the “New Approach” in accession negotiations. Serbia formally began accession negotiations on 21 January 2014 and could be reasonably expected to advance fast. With opening of the chapter on regional policy and co-ordination of structural instruments in November 2013, accession negotiations with Turkey have resumed after more than a three-year break. In December 2013 the Council once again made it clear that without full and non-discriminatory implementation of the Additional Protocol to the Association Agreement towards all Member States and normalisation of relations with the Republic of Cyprus by Turkey, it will not be possible for the Council to unfreeze certain negotiating chapters and to advance negotiations significantly. However, the resumption of negotiations, along with implementation of the Positive Agenda of 2012 could bring the needed boost and keep Turkey interested in  coming closer to the EU. The EU also began negotiations on Stabilization and Association Agreement with Kosovo. This will certainly keep the necessary pressure to continue with state building and necessary reforms, although these are still early days of the integration process in Kosovo in view of the distance to be covered towards full membership in the EU.

Progress in 2013 in the remaining candidate and potential candidate countries or around them was less pronounced. The new Icelandic government decided to put the accession negotiations on hold. Albania made progress towards a candidacy status, but the EU was not convinced and postponed its decision to June 2014. Progress in FYROM and Bosnia and Herzegovina hinges on the high level dialogues, but without tangible success or even the prospect thereof.

Overall, EU enlargement is advancing, but the limitations of this policy are becoming more obvious as well, especially when it is judged against more difficult cases. Some EU member states are becoming hostile to the EU enlargement policy. As a consequence, decision to grant EU candidacy status to Albania was postponed again, despite the positive recommendation of the European Commission.

Albania‘s case also demonstrates limited ability of the EU to induce change. Regrettably, the EU did not have enough tools to stop the new Albanian government from politically motivated lay-offs of civil servants. This is an important negative feature of the policy, which has wider implications towards the EU foreign policy in general.

First of all, this policy is passive towards the domestic ingredients of change. The EU seldom if at all engineers them, because EU policy makers tend to overestimate the attractive power of the EU. Unfortunately, they have got accustomed to assume that a certain opening of the relationship with the EU or upgrading of its status in itself is sufficient to make a lasting impact on the neighbourhood countries or, more widely, on the external world. This assumption is increasingly incorrect as there are more external players and more divergent internal incentives in the aspiring countries.

This is obvious in Western Balkans, but it is even more so in the Eastern neighbourhood. The current EU‘s stance towards Ukraine is a case in mind. While EU was right refusing to play a bidding game with Russia, a more active EU stance towards Ukraine and other Eastern partners is necessary. It is not enough to open a prospect of association and free trade, it is important to help to offset Russia‘s influence and help to solve the main developmental problems of this region. This, inter alia, includes a reassessment of the cost and benefits of the current association agreements. They should be commensurate to the issues of socio-economic development faced today by the South-Eastern and Eastern neighbourhood and made lighter in their regulatory burden.

A shorter version of this post has appeared on Europe’s World  and can be read here. Part II of this commentary will appear here on eurosearch shortly.

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