US embassy cable - 04BRUSSELS526

C O N F I D E N T I A L SECTION 01 OF 03 BRUSSELS 000526 
 
SIPDIS 
 
DEPT FOR EUR/RUS, EUR/UMB AND EUR/ERA 
 
E.O. 12958: DECL: 02/05/2009 
TAGS: PREL, ETRD, RS, EUN, USEU BRUSSELS 
SUBJECT: EU LAUNCHES FAST-TRACK ASSESSMENT OF RELATIONS 
WITH RUSSIA 
 
 
Classified By: USEU POLOFF LEE LITZENBERGER; REASONS 1.5 (B,D) 
 
1.  (C)  Summary.  Frustrated by an increasingly sterile 
dialogue with Moscow, and deeply embarrassed by Italian PM 
Berlusconi's fawning defense of Putin at last November's 
EU-Russia summit in Rome, the EU is conducting an 
"assessment" of its relations with Russia.  The goal is 
two-fold.  First, to systematically analyze the growing list 
of contentious, unresolved issues that increasingly 
characterize the EU-Russian relationship, and identify 
possible recommendations for action.  The second goal is 
damage limitation:  to impose stricter policy discipline on 
member states to prevent future EU presidency leaders from 
repeating Berlusconi's freelancing.  The EU hopes to complete 
this exercise by the time of its May summit with Russia.  The 
EU is open to U.S. ideas, but the window is short:  a first 
draft of the assessment could be ready for EU Foreign 
Ministers to consider at the February 23-24 GAERC.  End 
Summary. 
 
Rome Summit:  Catalyst for Policy Review 
------------------- 
2.  (C)  According to Kees Van Rij (protect), Solana's policy 
advisor for the CIS, and Council Secretariat Russia analysts 
Sofia Moureira de Sousa and Carl Hartzell (also protect), 
last year's EU-Russia summit in Rome drove home the need to 
reassess EU policy toward Russia in two major ways.  First, 
the EU found Putin and the Russians increasingly intransigent 
and hard-headed on a wide range of issues -- from Chechnya to 
EU enlargement to Kyoto.  EU frustration on this score is, 
according to our contacts, matched only by that of Russia, 
which feels the EU is ignoring its concerns.  Second, Italian 
PM Berlusconi's shameless defense of Putin during the summit 
press conference last November took the teeth out of an 
agreed EU policy to press Russia to address human rights 
concerns about Chechnya, promote internal political and 
economic reforms, and engage constructively on issues such as 
the frozen conflicts in Moldova and the Caucasus. 
 
EU Ministers Criticize Italy; seek policy discipline 
---------------- 
3.  (C) According to our contacts, at the December GAERC 
following the Rome summit with Russia, EU Foreign Ministers 
criticized Italy for having undermined agreed EU positions 
and abandoned its obligations to subsume bilateral views to 
those agreed among members.  The ministers called for the EU 
to assess its Russia policy prior to the May 2004 EU-Russia 
summit.  Privately, our EU contacts tell us that other EU 
member states were furious over Berlusconi's performance at 
the Rome summit, which press reports indicated led to renewed 
calls to eliminate the EU's current six-month rotating 
Presidency.  Kees Van Rij has often expressed to us his 
frustration that every EU presidency since Putin was elected 
-- with the notable exception of Denmark on the issues of 
Chechnya and Kaliningrad -- has talked tough on Russia right 
up to the summit meeting, when they have unceremoniously 
dumped all tough language and have sought to woo Putin.  For 
Van Rij, though, Berlusconi went over the top.  Thus, one 
purpose of reassessing EU policy towards Russia is to 
reinforce internal EU discipline in order to limit future 
presidency countries' ability to depart from agreed policy at 
Russia-EU summits. 
 
EU frustration at long list of issues going nowhere 
--------------------- 
4.  (C) The second stimulus behind the EU's review of its 
Russia policy also arose at the Rome summit.  At Rome, the EU 
found the Russians to have adopted much tougher positions 
than previously on a wide range of issues.  The increasingly 
sterile dialogue has led to a growing list of outstanding, 
contentious issues between the EU and Russia.  These include: 
 
--  Enlargement:  The Russians continue to press for 
"compensation" from the EU for what it claims will be the 
economic costs of EU enlargement.  This issue is a 
non-starter for the EU, whose officials view enlargement as 
bringing a huge lucrative market to Russia's doorstep, and 
who assert that every study they've seen shows enlargement 
will result in a net economic benefit for Moscow. 
 
-- Partnership and Cooperation Agreement (PCA):  As a 
consequence of enlargement, the EU has called on Russia to 
ratify the PCA with the ten accession countries.  Russia has 
delayed, seeking to link the extension to visa free travel 
for Russian citizens to EU countries, or to easier WTO 
accession terms.  The EU contends that unless this issue is 
resolved by May 1, the existing PCA will not be valid, and 
the EU will have no basis for formal relations with Russia. 
Russia has recently indicated it is considering a temporary 
extension of the PCA after May, pending resolution of the 
"compensation" issue.  EU exasperation on this issue cannot 
be overestimated -- Van Rij commented that continued Russian 
insistence on this issue will force the EU to choose between 
relations with Russia or EU enlargement.  "What's more 
important?" he asked, "If we are forced to choose, we'll 
choose EU enlargement." 
 
-- Chechnya:  The EU has gotten nowhere with its repeated 
demarches to Moscow on the need, at a minimum, to facilitate 
delivery of EU-funded humanitarian aid to Chechen refugees. 
The Russians allege that NGO's in the region are sympathetic 
to the separatists and their mission is anything but 
humanitarian. 
 
-- Near Abroad:  Russia resists all attempts by the EU to put 
issues related to Belarus, Moldova, Ukraine or the Caucasus 
on the bilateral agenda.  On Belarus, the Russians tell the 
EU to trust in Russian influence to civilize Lukashenko.  On 
Moldova, the Russians do not acknowledge that the common EU 
border that will result from enlargement (after Romania and 
Bulgaria join in 2007) gives the EU a legitimate interest -- 
and voice -- in resolution of the Transnistrian conflict. 
 
-- Kyoto:  Russia's announcement in Rome that it does not 
intend to ratify Kyoto pulled the rug out of EU efforts to 
bring the protocol into force, and is a major setback for one 
of the EU's highest-profile environmental policy goals. 
 
EU objectives and timetable 
------------------------ 
5.  (C)  Moreira de Sousa said the purpose of the assessment 
is to catalogue and analyze the challenges to the 
relationship -- the list of outstanding issues -- set 
objectives and, if possible, develop recommendations on how 
to engage Russia to achieve EU goals in each area.  The 
timetable is short:  to be ready for the next EU-Russia 
summit in May, EU officials are scrambling to have a paper 
for ministers to consider at the February 23-24 GAERC.  They 
acknowledge this deadline may be missed, but certainly by the 
March 22-23 GAERC the EU will have completed its assessment. 
EU goals for the exercise are threefold:   to resolve 
outstanding enlargement issues; develop a positive dialogue 
with Russia on the near abroad, and to manage the EU's trade 
and WTO related issues with Moscow. 
 
Frozen conflicts:  what about Northern Ireland? 
--------------- 
6.  (C)  For example, Moreira de Sousa told us recently, when 
the EU raises issues such as Moldova/Transnistria, the 
Russians say they want to put Northern Ireland and Cyprus on 
the agenda.  The EU has resisted this, but the Irish 
presidency agreed earlier this year to discuss Northern 
Ireland with Russia, if only to remove this as an excuse for 
Russia not to engage on issues in the near abroad. 
 
EU open to U.S. influence 
-------------- 
7. (C)  EU officials are open to engaging with the U.S. as 
they assess their relations with Russia.  U.S.-EU COEST 
Troika talks on February 9 (Caucasus and Central Asia) and on 
March 16 (Russia, Ukraine, Moldova and Belarus) offer 
opportunities to do so, but our window is relatively short. 
Working back from the May summit, the outlines of the EU's 
approach will have to gel by late February or early March. 
 
Comment: Venus and Mars 
------- 
8.  (C)  In spite of the current hiccups in EU-Russian 
relations, keeping the relationship on an even keel is too 
important for both sides to allow a major disruption.  The EU 
is Russia's largest trading partner, and Russia provides 
15-20 percent of Europe's energy supplies.  Both of these 
indicators will increase with enlargement.  However, both 
sides are frustrated by the extra level of effort required to 
maintain an increasingly sterile dialogue.  The EU sees 
enlargement as an internal issue and a fait accompli that is 
coincidentally beneficial to Russia, and thus expects nothing 
less than Russian acquiescence.  The Russians appear to view 
their acceptance of EU enlargement as a major concession and 
expect the EU to offer a quid pro quo.  With enlarged borders 
that join Russia, Belarus, Ukraine and soon Moldova, the EU 
considers its stake in the stability of these countries to be 
equal to Russia's.  Russia has not accepted this.  EU 
Enlargement is shifting the economic and political balance of 
power in the EU-Russian relationship in ways neither side has 
fully grasped. We expect both sides will seek to come to 
terms, one way or another, with the immediate impact of 
enlargement during the May summit.  But enlargement means 
that the EU's horizons have moved eastward -- and now overlap 
plenty of areas the Russians consider their natural zones of 
influence -- so tensions similar to those we are seeing now 
will persist for some time. 
 
SCHNABEL