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EU enlargement and Eastern neighbourhood policies: how wrong blueprint spoils good policy: Part II

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.

 

 

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