A principled EU approach to Russia

International Herald Tribune.

By Paddy Ashdown

The relationship between the European Union and Russia has been going through a particularly bad patch lately, with disputes over Kosovo, missiles and energy. Trumping all these, however, is the standoff over the Litvinenko affair - initially a dispute between Britain and Russia - which has been taken up by the European Union. The bilateral problems of Poland, Estonia and Lithuania with Russia have also been taken up by the European Union in a growing sense of solidarity.

This was most apparent at the summit meeting at Samara in Russia in May when Chancellor Angela Merkel and the European Commission president, José Manuel Barroso, surprised President Vladimir Putin with their statements that the problems of one member state were the problems of all 27 member states. The chumminess of past summit meetings, when Gerhard Schröder, Jacques Chirac and Silvio Berlusconi seemed to go out of their way to placate Putin, has been replaced by a new realism. This is due partly to the influence of the new member states and partly to growing evidence of the Kremlin's attempts to stifle the media and democratic opposition.

Buoyed by high energy prices, the Russian economy has done well under Putin, but there has been backsliding on human rights, tackling corruption and establishing an independent judiciary. There are also millions of Russians who have not benefited from the energy boom.

How can the European Union build on this new solidarity and more realistic attitude towards Russia? What should be the guiding principles in developing a strategic approach towards Russia?

The European Union has a major interest in a strong, stable, prosperous Russia - but also a democratic Russia that adheres to the rule of law. We should not be preaching all the time to Russia about democracy and human rights, but we should insist that Moscow lives up to the commitments it accepted in the 1997 partnership and cooperation agreement with the European Union and its obligations as a member of the Council of Europe.

The rule of law is notorious for its ambiguity, but there are three key elements: Government power is exercised in accordance with well-established and clearly written rules; no branch of government is above the law; and the principle of the separation of powers is observed. It would be difficult to assert that Russia meets any of these criteria.

Does this matter? Foreign businesses are doing well in Russia. Sales and profits are rising and more companies are entering the market. The turnout of Western chief executives at the St. Petersburg economic summit meeting in June is testimony to the growing interest in the Russian market.

At the same time there are increasing concerns about the quality of the business environment in Russia. According to recent reports by the World Bank and OECD, Russia suffers from a lack of transparent legislation, poor implementation of laws, corruption and a weak judiciary. In addition, corporate governance leaves much to be desired, especially in those companies largely under state control.

Most analysts agree that without the rule of law it will be impossible to attract the scale of foreign investment that Russia says it wants to help diversify its economy away from excessive reliance on energy resources. It is very much in the European Union's interest to help Russia achieve this goal as a more balanced economy would greatly boost trade ties.

There is enormous potential for cooperation. For example, the European Union has considerable experience in regional development and assisting the transformation of "old" industrial areas.

What then are the prospects for the rule of law in Russia and how can the European Union best support efforts to strengthen an independent judiciary?

Although the short-term prospects are not encouraging, there are a number of factors that give cause for long-term optimism. These include an underlying respect for integrity among many Russians, a religious revival, the practical need for honesty and predictability in a modern economy, membership in the World Trade Organization and the fact that the world is watching to an extent never before possible. That the Kremlin is concerned about its image abroad is borne out by the vast sums now being paid to Western public relations firms to help promote "Russia, Inc."

Russia has parliamentary and presidential elections in the coming months. A new president could respond to growing business pressure and help establish a new paradigm based on modernization of the economy, social reform and respect for the rule of law.

The European Union should encourage such efforts by opening up its markets, multiplying business and student exchange opportunities, and increasing its support for the training of lawyers and judges.

he European Union should also state clearly that it wants to develop a comprehensive strategic partnership with Russia to tackle the multitude of global problems, from climate change and nuclear proliferation to Darfur and the Middle East.

But such a partnership must be based on a minimum agreement on common values, and above all respect for the rule of law.

Lord Ashdown is president of the EU-Russia Center and former EU High Representative in Bosnia.