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The Europe-Russia Forum

Digital format, 09/07/2020, International Conference

The dialogue between the EU and Russia has practically come to a halt over the past few years, for various reasons. Official EU policy includes the concept of “selective engagement”, which now presents an opportunity in light of relevant common interests in the context of the growing US-China clash. All EU members and Russia favour a continuation of the multilateral system in key areas, such as international trade and technological cooperation – the latter having become a precondition for effective policies in almost any sector. In terms of access to technologies, Russia is naturally oriented toward Europe, although obstacles clearly remain and need to be openly addressed. Broader forms of economic cooperation would also help to avoid a drift in terms of values and principles which we witnessed especially in dealing with regional crises and flashpoints.

There may be some potential for bilateral cooperation in the area of environmental policies, but the European “green deal” is largely an attempt to reduce the EU’s dependence on fossil fuels, which in turn poses a problem for current relations with Russia at least in the short term. There is also a perceived danger that the EU might use climate policies as a protectionist trade instrument.

A significant problem remains that of divisions among EU members. There is a long way to go before divergent priorities can be overcome: this will continue to pose a challenge to better relations with Russia as well as a more coherent European full-spectrum external projection. Some observers even argued that the EU is actually retrenching from global commitments, relying on its traditional free-riding attitude – mostly in the context of the defense relationship with the US – and focusing exclusively on internal goals.

The effects of the pandemic is indeed interlocked with other sources of problems, such as the decaying of global institutions and the US-China trade and geopolitical tensions: in practice, the economic crisis induced by the various lockdowns and health measures is intesifying preexisting trends, mostly in a dangerous direction. Most participants agreed that we are facing an accelerator rather than a major change of direction.

An acceleration is visible in the Sino-American confrontation, which is becoming a determinant of both countries’ relations with third parties – something which is unlikely to change radically with a possible Biden administration. This creates a fundamental dilemma for the Europeans, but also to some extent for Russia, as we look at a process of “deglobalization” and increased protectionism. So far, despite a certain Transatlantic convergence on how to assess China’s challenge, it has been almost impossible for Europe and the US to work together on any initiative toward Beijing.

As to Russia, it views China’s Belt&Road initiative (BRI) as a potential opportunity especially in the infrastructure sector, which could help position Russia as an intermediary between East Asia and Western Europe. Despite serious difficulties with the practical implementation of the BRI projects, there is an open attitude toward Chinese initiatives designed to connect Eurasia.

There are also tensions between Washington and Moscow: their nature is structural and there is a solid bipartisan anti-Russian consensus in the US, although this does not translate into a clearcut confrontation policy. Indeed, many in Russia fear that a Biden administration would end up further damaging the bilateral relationship, in part due to the likely emphasis on human rights and possibly on re-establishing (or readjusting) the US presence in the Middle East.

A Biden presidency would certainly ameliorate Transatlantic relations at least in the short and medium term, and open a new period of frank conversation, although the future is rather uncertain for the Western alliance.

Most participants agree that the international system will probably remain multipolar, but both the EU and Russia will end up being second-tier powers in almost any conceivable scenario.

It was also noted by several participants that US soft power and prestige have been badly damaged by the pandemic and its (mis)management. Such a dynamic is having systemic effects, as a reduced American willingness to engage in interdependence will make security frictions more likely over time on a global scale.

In tackling the pandemic, Russia seems to be set on an intermediate path between the European and the US model. The government demonstrated a certain ability to delegate some key decisions and measures to local authorities – despite the strong centralization that still characterizes the political system –  which made the response more effective than it might have been. Russia’s reaction to the crisis is partly benefiting from the relatively prudent attitude it had adopted in terms of economic policies (especially financial reserves) prior to the pandemic, and from the massive stimulus packages activated by other major economies. Given the country’s strong dependence on international factors – starting with energy prices – such a strategy may be the only realistic one and may ultimately pay off.

Europe is performing better than many expected, thanks to political measures taken within countries and even by the EU collectively. In tackling the pandemic almost all European countries followed the same path and experienced a very similar pattern in terms of infections and fatalities – with a rapid rise, rigorous lockdowns, a significant slowdown and then a stabilization of cases to manageable levels, at least for now. As to economic measures, the common European choice was to keep most workers employed, which helps in terms of social cohesion but slows down certain needed business adjustments. There will be some differences in the reactions by labour markets, but these are largely due to the preexisting trends and prospects, so that the repercussions of the Covid-19 crisis may end up being rather symmetrical across Europe.

A positive effect within Europe – and to some extent at the global level – will probably be that governments and public opinions have learned from their mistakes and now all well aware that cooperation is indispensable and achievable, even in case a “second wave” of infections should hit at some point.

The decisions made in Brussels were very important in setting the stage: the practical lifting of budget constraints by the EU was an essential step, in conjunction with the ECB intervention, as both made national emergency measures much easier. The overall result was a good level of convergence, despite the continuing difficulties that will have to be faced. The challenge for the near future is pursuing the well known “structural reforms” that are linked to the financial support being offered by the EU. In any case, Europe’s institutional setup is changing significantly for the better, with a new mission in terms of budgetary policies that was badly needed even prior to the pandemic. In parallel, there will be more emphasis on the internal market in the context of problematic global relations – not necessarily the best possible scenario but at least an opportunity to be seized to strengthen the single market.

Some participants believe that the major risk for Europe’s cohesion is actually in the politics of the post-Covid period, which seems to be lagging behind the policies: deep fractures may soon emerge as the costs of the crisis hit large sectors of societies following years of slow growth and concerns with inequality.