Ladies and Gentlemen,
Allow me to begin by quoting the Ancient Greek poet Hesiod: “A bad neighbour is a misfortune as much as a good one is a blessing”.
The European Union has indeed become a good neighbour for Russia – one with which we are welded together geographically, closely interlinked economically and share a common cultural heritage and a civilizational perspective. In short, we are and will continue to be strategic partners.
The potent dynamics of our thriving relationship have once again been reaffirmed at the 29th bilateral summit in Saint-Petersburg earlier this month. Just as importantly, the summit has ensured a “seamless transition” in Russia-EU personal contacts at leadership level following Vladimir Putin’s return to the post of President.
True, the European Union is facing daunting difficulties. The sovereign debt crisis has undercut economic growth of affected states, severely tested the European social welfare model and brought the North-South fault lines inside the EU sharply into focus. Nowhere across the EU is this more obvious than here in Greece. Support for the EU project sagged as fringe parties, which at times parade dangerous ultranationalist and even racist slogans, were gaining public favour. The crisis has dealt a painful blow to the EU self-image as an oasis of stability and prosperity, and now it is increasingly being viewed by outsiders – at least temporarily – as an area of economic turbulence.
Nevertheless Russia remains confident that EU member-states will ultimately be able to overcome current calamities and possibly emerge even more integrated than before. The European project has been known to thrive on crises. The current one may be no exception. Over the past two years the EU has undertaken significant steps to reinforce macroeconomic governance, reinvigorate the Stability and Growth Pact, upgrade financial firewalls and oversee financial markets. The Commission has received unprecedented supervisory powers. A banking union appears to be underway and a full-scale fiscal union is slowly coming within reach. These decisive actions have partially restored market confidence and are sending encouraging signals to the outside world.
Russia is already doing its utmost in assisting the EU in overcoming the current complications. In spite of the crisis our trade volumes soared to a record-breaking 307 billion euros in 2011. Over 40 percent of Russian foreign currency reserves are nominated in the single European currency. Russia remains Europe’s number one energy partner with a steady, reliable flow of oil and gas gushing into EU markets, industries and households. The launch in November 2011 of the “North Stream” gas pipeline across the Baltic Sea as well as the planned construction of the “South Stream” will further bolster EU energy security for decades to come. We are actively contributing to the international community’s response to the Eurozone crisis through the G-8, the G-20 and the IMF.
We Russians have always acknowledged the merits of European integration and have drawn upon this unique experience in working towards enhanced integration in the post-Soviet space. On January 1st the Single Economic Space between Russia, Belarus and Kazakhstan came into existence with a joint Eurasian Economic Commission broadly following in the footsteps of the EU communitary tradition. The processes of European and Eurasian integration are natural, inclusive and mutually reinforcing. Most importantly, they are both based on WTO rules and norms. Far from detracting from each other - as some would have you believe - they tap into the vast economic and human potential of the European continent to create a common area of economic prosperity, political stability and social justice.
It is our ambition to translate the lofty language of the 2005 Russia- EU Roadmap for the Common Space of External Security into decisive action by engineering ever closer links between these projects of regional integration with the long-term objective of creating what President Vladimir Putin referred to as an “economic community from Lisbon to Vladivostok, a common market worth trillions of euros”.
Naturally, a booming partnership between two centres of economic, political and cultural gravity such as Russia and the EU cannot be totally free of differences. After all, we are and will remain competitors in the global market of today and tomorrow. The good news is that over time these differences have become far less ideological and more centered around specific interests and concerns.
One of the last vestiges of obsolete “zero-sum” thinking relates to the spillover effect of EU attempts to impose its policy on third countries, overriding existing international agreements and standards. A prime example is the so-called EU Third Energy Package that under the euphemistic name of “unbundling” requires separation of energy production, transportation and sales in EU markets, including – as is the case in some EU member states – through forcible expropriation of assets. This piece of legislation not only runs counter to the provisions of the 1994 Russia-EU Partnership and Cooperation Agreement as well as several bilateral arrangements. In our view, it undermines long-term EU energy security, competitive advantages of regional energy markets, and above all, the interests of European consumers.
Another obvious case is the hastily undertaken inclusion of civil aviation into the notorious EU Emissions Trading Scheme. This has had the effect of essentially levying an EU duty on airlines, and consecutively on passengers, for the whole length of their flight – even when most of it takes place outside of EU airspace. The flawed nature of this measure is best manifested by a coalition of countries, including Russia, US, China, India and Brazil, that have opposed it. In fact, the EU has succeeded in placing itself against the rest of the world on this issue.
Likewise, the EU has rushed into negotiating a projected Transcaspian gas pipeline without taking into consideration the unresolved issue of the legal status of the Caspian Sea and potential massive risks for the environment of the Caspian basin.
Let me emphasize, however, that these divergences are on the whole outnumbered and overshadowed by strategic endeavours in the Russia-EU relationship.
Securing a Russia-EU visa-free regime is a top priority and a decisive litmus test that will amply testify to the genuine nature of our strategic partnership. It touches upon the livelihood of millions of students, tourists, workers, businessmen and officials – including the 2,5 million Russians who annually enter the Schengen area and the 1,5 million EU citizens who cross into Russia. Progress on this important track will not only bring us closer but will immediately translate into tangible economic yields for all of Europe.
At the Russia-EU summit in December 2011 in Brussels an agreement was reached on technical Common Steps that – once implemented – should kick off without delay negotiations on concluding a bilateral visa-free arrangement. Otherwise, if bureaucratic inertia and imaginary fears of a mass migrant incursion are allowed to take hold, both sides will lose out. In my view, the Sochi Winter Olympic Games in 2014 represent a realistic deadline for introducing visa-free travel.
Negotiations on upgrading the existing Russia-EU visa facilitation agreement are well underway. Extending its provisions to holders of service passports will allow the relevant agreement to be signed adapting the one that is in force since 2007.
The Partnership for Modernisation initiative, launched in 2010, is spearheading our drive towards a greener knowledge-based economy. Its groundbreaking philosophy of innovative synergies between Russia and the EU has resulted in a plethora of achievements, ranging from harmonization of technical standards to commercial space launches. Over 2 billion euros have been earmarked by Russian and EU banks for ambitious future-oriented project activities within this notable enterprise.
Following Russia’s accession to the WTO bilateral negotiations on a New Russia-EU Basic Agreement have gained further traction, with focus shifting to the trade and investment chapter.
Allow me, in my capacity as head of the Russian negotiating team, to reiterate the obvious – Russia remains committed to modernizing the legal basis of its relationship with the EU, is ready and willing to enter into compromises in the overall interest of elaborating a stable, forward-looking and efficient institutional framework that will serve the needs of our peoples in the 21st century. However, we are not prepared to venture unilateral concessions that would go way beyond the conditions of Russia’s WTO membership – many of which will take our economy years to digest.
Moreover, since the launch of negotiations in 2008 a number of key sectors in the areas of trade, competition policies, state purchases, as well as technical regulations have become subsumed by supranational bodies of Eurasian integration. It is thus significant that at the Saint-Petersburg summit EU leaders acknowledged these new realities dictating the need for direct links between the European and the Eurasian economic commissions.
Russia and the EU are key global partners in forging global security and prosperity. Thanks primarily to our joint anti-piracy action off the coast of Somalia we managed last year alone to reduce the number of pirated vessels by half. We are working hand in hand with the EU to achieve momentum in the Middle East Peace Process, to secure a political settlement of the Iranian nuclear issue, the protracted Transdniestrian conflict as well as a host of other crises and conflicts around the world. Our foreign policy interaction has reached an unprecedented scale with over 15 regular consultation formats in place under the overall chapeau of the Permanent Partnership Council at Foreign Ministers’ level.
It is time to take this global endeavour to a new stage. We are in favour of introducing a permanent Russia-EU strategic decision-making and planning capacity akin to the existing Russia-NATO Council. Actually a German proposal to that effect, called the Meseberg initiative, remains on the table awaiting for other EU member states to gear up the necessary political will. We also hope to institutionalize our important crisis management partnership by swiftly elaborating a relevant framework agreement in the spirit of equality.
Ladies and Gentlemen,
The word crisis is Greek, broadly meaning “judgement”, whereas in its Chinese hieroglyphic transcription it is reflected by two graphic descriptions, one literally translated as “disaster”, and the other as “opportunity”. But I think that rather than dwell on this linguistic irony we should seize the moment to strategically survey the EU-Russia relationship, knock down remaining barriers and unlock our potential in key areas. By working together the EU and Russia can jointly overcome economic predicaments faster and establish a Wider Europe of prosperity, stability and justice.
