Russia and the Eurasian Union: Mission Impossible?

By Hans-Jürgen Zahorka
Chief Editor, European Union Foreign Affairs Journal (EUFAJ)
http://www.eufaj.eu

The Russian president Putin may be a political chess player, but he will fail at the very end. He wants to restore glory for his country, and therefore he undertakes a lot:
– blaming the Americans and the Europeans for anything which does not function in his country, including a growing authoritarianism and repression of non-violent opposition, including as well the stigmatisation as „foreign agents“ of any non-governmental organisation which has contacts abroad (and all open-thinking NGOs have them), and following a media policy which is absurd and where critical journalists often have to pay with their lives and health,
– gathering a lot of compliments from most of his compatriots after the conquest of Crimea, and the intended destabilisation of Eastern Ukraine – and in both cases the troops there turned out to be Russian ones, although this has been denied by Putin, who did not say the truth to the world.

This is why Russia is now isolated more than ever. Even China did not veto the trend of a discussion in the UN Security Council on 12.4.2014.

All the efforts by Putin go in this mentioned direction. It is to be crowned by the project of the „Eurasian Union“ which is to see the light of the world in 2015. Since his article in Izvestiya some years ago, it is evident that this Eurasian Union should become a kind of counterpart to the EU. No problem with this; the EU is very much in favour of regional integration in the world. And nobody in the EU or elsewhere would have anything against the Eurasian Union. However, this Project is not about economic or political Integration only. It will never be possible as an integration in the worldwide sense, alone as the EU has been a totally voluntary integration. The same for all other integrations in the world. The Eurasian Union, however, is definitely not: its predecessor and economic centerpiece, the Eurasian Customs Union is going bonkers — even if this is not seen by the protagonists. Consisting of Russia, Belarus and Kazakhstan (all three beacons of democracy and human rights, as everybody knows), a lot of transborder operations go better with the help of corruption. I don’t want to mention the ranking in the Corruption Perception Index, as everybody also in Russia knows that there is still a lot of corruption in the administration. The customs tariffs are three times as high, on an average, as the import tariffs for new member countries: Armenia has either to raise its customs considerably, or get several hundred of exemptions, which makes a customs union ridiculous. Normally a customs union in economic history has always served to decrease customs, and not to increase! The Armenian government has been squeezed – under which circumstances ever – to welcome this and to tell its people that this would be a success. At the same time, newspapers write at the same page of many possible insolvencies of various sectors and drop-outs, which will lead to a continuation of the Armenian nightmare, the brain-drain by emigration. Every integration – see e.g. the accession of Spain, Portugal, Greece as well as Central and Eastern Europe to the EU – has led so far to a short to medium-term re-integration of former emigrants.

The biggest problem for Russia is her relations with Ukraine. Here every possible Eurasian Union member state can see at first hand, how they can be treated. No chance to hope that this can be changed: Russia has in all Eurasian structures since many years the absolute majority of votes. No way with a qualified majority, which in the EU can easily serve as an instrument of balancing the interests and of creating a compromise.

The result of the Crimea action has been to suspend Russia’s voting rights in the Council of Europe and to be subject of a negative assessment by the UN Assembly.

And nobody will invest at present in Russia, if he is mentally normal (except some big operators who are of strategic interest for Russia): The Moscow government had declared that it might confiscate foreign investmnt. This is against all rules, the rule of law, the rule of any international economy and above all the interests of Russia herself. Every small and medium enterprise will refrain from investing – and this in an era of positive globalization. Only a former KGB chief who never saw a company from inside can ride on such a wave. Russia is also dependent of its raw material and energy sales. The EU, including Germany, as main client are working since a while to diversify their purchases, a step which is getting momentum, and of developing alternative energy.

As the present macroeconomic trends indicate, Russia’s economy goes slowly but safely down, like the ruble currency, thus problemizing all foreign purchases which will be necessary also for domestic investment.

There are some people – like the author of these lines – who remember the hospitality, the fine humour, the philosophical discussions even with non-philosophers, the great nature, the food, the interesting history, the excellent education of Russian people. Their economy could become more and more efficient, corruption could go down, a numerous middle-class could emerge, Russians (all, not some) would go for holidays to the EU and worldwide, and will not flee their country, NGOs could form a vital civil society, art and music could thrive, and all problems could be discussed – why not controversially – and then solved in a free parliamentary vote. And the parliaments are correctly elected, and why not letting all parties admitted for this? Towards the outside, Russia could have excellent relations with its neighbours, with the EU (there are many years homework on what has been proposed and not done, like a free trade agreement etc.), with NATO, just to name some. In such a climate, NATO could become a historical structure – maybe with Russia as a member.

Instead of this, the former KGB chief in the Kremlin does not refrain from lying to the world, from attacking Crimea (at least. until tonight, 14.4.2014), and arresting many people who demonstrate against this in Moscow these days.

It is, simply speaking, ga-ga that at the beginning of the 21st century Russia, while all the others, or most of them, try to cooperate, falls back into the 19th century. If these ideas cannot convince the people (who should not behave like a flock of sheep), they feel a minority complex, manipulate the media and threaten other countries with tanks at their borders. They also are misled by this foreign activity from domestic and grave deficits. With this, the Eurasian Union will never function. It might be launched, but it will be a sick structure from the beginning – like many others who have been launched after 2001 in the former Soviet Union. There are brillant heads e.g. in the Eurasian Development Bank which is a kind of think-tank for regional integration and where many concepts for economic integration have been conceived. But in their concepts you do not read anything about the necessity of a free will of the member states to follow this integration. What their people have, the Russian government has not: sovereignty. The sovereignty to live and to let live. You should take it easy, Vladimir Vladimirowich. If you would, your people would also. But I have lost any hope that this is possible under your reign, although I am an eternal optimist. So drive your country to the beton wall, including following countries. Like the system of the USSR, this „Soviet 2.0“ system, although not under Communist auspices, will be rejected by a majority of People involved when they see the middle and Long-term results – first in the partner countries, then in Russia. By educated, young people who will see how dysfunctional their own system will be, also due to their Facebook and Twitter accounts and the Internet in general. Like the integration of the USSR, of Yugoslavia which both burst in bubbles. The result will always be smaller than the original. Because of this, perhaps for the sake of its own corruption?, the Moscow government will end up similarly, in the most positive way with four or five former and present European CIS countries in or near the EU, and Central Asia may later form a kind of integration themselves. It would, after all, need another and sympathetic leader in Moscow (not only to most of the Russians but also to the world) to break up this isolation and inefficiency.

The „Soviet Union 2.0“, the Crimea Peninsula, Ukraine and the EU

Whatever the news are and will be, whoever will have been the masked, uniformed people, the whole world looks and above all will look to the Crimea Peninsula and the South of Ukraine in the next days. It all depends how Putin will act or react – and it cannot be believed that what happened the last two days was a matter of some local commanders of the Russian Black Sea troops while he, Putin, did not know anything. He still tries to play the „good cop“, but nobody believes him anymore. Furthermore he might orchestrate a bigger operation than in Georgia, with Abkhasia and South Ossetia, in 2008, with revealing pictures repeating themselves in Crimea.
Since 1954, Crimea has been submitted by then Soviet Union to the Ukrainian authorities. In May 1992, the region was a punching ball between Russia, the Crimean parliament and Ukraine, with the result that it got a high degree of self-government. It became a kind of decentralised part of Ukraine, with an own constitution and a relatively high degree of self-government. While Russian President Yeltsin and Ukrainian President Kravchuk managed to divide the Soviet Black Sea fleet, Crimean Communists wanted an even more distinguished status of the Peninsula, which had at this time around 2 million of citizens (which decrease from year to year). The Crimean Parliament, however, anchored a clear phrase in the Constitution that the Peninsula was part of Ukraine.

Since this time there were numerous attempts in Crimea to be integrated into Russia and to leave Ukraine. In 2008, Russian passports have been given to Crimea residents, to create citizens to be protected then by Russia – at the same time when Russia did exactly the same in South Ossetia and Abkhazia, which were until then provinces of Georgia. Unlike Georgia’s Saakashvili however, the new Ukrainian government will not be torn into a provocation by Russia.

It was evident that „something“ had to happen in the Crimea Peninsula, in which southern part the Russian Black Sea fleet is based. Nothing against this fleet (and most Ukrainians could also live with this), but the Russian action seems to be a clear act of aggression, as another country has partly been occupied now, as Russia has made a no-flight zone over the Crimea, and as light tanks and an army staff of at least 2.000 has been sent to the peninsula to „protect“ (or take) local strategic institutions. Sure, the Crimea has been populated always by a majority of ethnic Russians, and there are ten thousands of Crimea Tatars who came only back to their former residences on Crimea recently, after they have been sent by Stalin in the mid-1940s to Siberia or Central Asia. This population group, of Muslim belief, is committed to live in Ukraine.

Since some street riots, without the loss of lives (except one casualty due to a heart attack), since 26.2.2014 in Simferopol, the Russian president Putin has ordered more than 150.000 Russian troops near the Ukrainian border on alert. Evidently, Russian forces have occupied parts of the Ukraine, which is, to put it mildly, illegal. This is indicated also by flights of helicoter gunships over the Crimea, and the persons which were partly masked and without uniform signs have been Russians, according to local population. Maybe the whole coup is what Moscow wants – but it will have to calculate now with heavy political and probably also economic replies:

1. The Ukraine could cancel the Black Sea Agreement regarding the navy bases in Ukraine. Maybe there is no effect upon this, but the claims could be pursued by international tribunals, and this would contribute to a growing isolation of Russia, which has – in 2014, and not any more in Soviet Union or before, when these things have been undertaken frequently – revived unilaterally a kind of Cold War. Another of course than the one which was held on an ideological basis, but a Cold War not of the old Soviet Union, but of „Soviet Union 2.0“, which evidently is Putin’s Russia today.
2. There will be a heavy consequnce for any country where the possible accession to Putin’s invention, the Eurasian Union and even the Eurasian Customs Union, is considered. The hit to Crimea will cost a lot of credibility, and from now on, the Kremlin is on the defensive regarding this project.
3. It will drive Ukraine much faster into the European Union than foreseen, and it will also set free thoughts about integrating Ukraine into NATO – and this above all from Ukraine.
4. It may bring a further drop of economic relations between the EU and Russia, and therefore contribute to an ever more stagnating economy of Russia – which is one of the biggest problems of the future. Putin cannot, today, calculate any more with the capacity to suffer of the Russian People.
5.In this context, I want to advocate the abolition of visas between the EU and Russia. Thus, Russians can see how Europeans live, how they think, how the EU and the Member States‘ governments and parliaments work. This, and millions of personal contacts and talks will have a long-term effect on Russia.
6. There will be a middle-term effect of free speech in the Crimea. Until now, the Peninsula has been led by Russian propaganda which is considerably different to the facts.
7. We are not anymore in talks between Yeltsin and Helmut Kohl – these times are over. There is an ex-KGB Boss now running the Kremlin, and he clearly wants to create somehow a superpower glory like in Soviet times. This is possibly followed with the same means as in Soviet times, namely with lies, like what Russia’s Foreign Minister Lavrov said to John Kerry two times during a phone talk these days: that the territorial integrity of Ukraine will not be touched. This means clearly, that there cannot be any more trust and reliance in Russian declarations.
It is evident that the sagas of „fascists“ etc. who „took now power in Kiev“ are nonsense; These are people who wanted to get rid of Yanukovich who marched his own „Berkut“ police units and his secret service against protesters, who did on the long term not accept Yanukovich’s way of retiring from the EU, of accruing personal fortunes and of having a rude leadership, with big deficits in the rule of law and heavy corruption. It has been no miracle that exaggerated expressions of nationalism could grow in this climate, but the Ukrainians are, like all other Europeans who do appreciate that they can live under European values, no fascists. The yet existing democratic deficits can be wiped out easily and in a fast way – this was shown e.g. by the Maidan Council etc.
8. There will be on the next EU summit on 20./21.3.2014 the new government of Ukraine coming to the EU heads of state and government to sign the Association Agreement with the Deep and Comprehensive Free Trade Area. This will induce, if not done already, payments of the EU, but wisely bound to reforms and to conditionality. Of course, this may bring problems for the Ukraine and its citizens as well, but only temporarily. The more open the UA government and parliament says this to its own people, the better. After all, this is a heritage from a Person who has cheated his people for millions and billions. It can be looked on the money laundering procedures not only in Switzerland, Liechtenstein, Austria, but probably also in other countries.
9. And last but not least, what Putin has done, arranged or accepted in Crimea must have a political, soft-power adequate reply. The EU is and will remain a soft power, in contrat to the Soviet Union 2.0 which is at present Russia – and where people who took part in anti-Putin protests 2 years ago were thrown up to 4 1/2 years to labour camp prison only one day after the Sotchi Winter Olympics ended. The power of weakness, or soft power, has always a longer breath than the weakness of power, or hard power. But above all, the EU has to follow now an articulate policy towards this kind of authoritarian, aggressive rulers in its environment. Doing nothing is no solution for the EU, and Putin and the UA government would be well advised, to settle the question of the Black Sea fleet – an Instrument of only regional and not of strategic importance – in a Guantanamo way, maybe with the rental agreement of a base on eternity“.

Hans-Jürgen Zahorka
Chief Editor, European Union Foreign Affairs Journal

http://www.eufaj.eu

Lessons from Ukraine’s Maidan for the Eastern Partnership Countries

By Hans-Jürgen Zahorka
Chief Editor, European Union Foreign Affairs Journal

http://www.eufaj.eu

Today night, Saturday, 22.2.2014, Yulya Timoshenko spoke for the first time after her release on the Kiev Maidan, and the questions about the whereabouts of ex-president Yanukuvich and about what he declares now reach the field of the ridiculous. He undergoes the fate of other dictators who have been chased away, and from which fates he did not learn anything.

Now those who have political responsibilities in the EU (and not only of the EU) should however discuss what may or will happen in the next future, i. e. the impact of the Kiev Maidan on Russia and on the other European Partnership Partner states of the EU, as well as on the West Balkan and on Turkey. All these countries, except Russia, have one thing in common: they are possible EU Member States, in the making, in the waiting room. Of course, with different individual distance yet to the European Union.

First, it must be congratulated and thanked to the Ukrainian people, to the heroes – and the dead – of Maidan. This was the latest European revolution which became accelerated by the horror of those who were marched by the government against the protesters, and who felt – on their own or upon the opinion of their families, relatives, colleagues etc. – that this was too much. It is not possible to excuse the Ukrainian government of the deadly snipers who killed by one single shot protesters in an arbitrary way. We will all be witnesses to trials who will be necessary, and – for the sake of the rule of law oif Ukraine – it must be hoped that they are fair. Yanukuvoch must be aware that he might come in a similar situation as Ceaucescu of Romania. Because the state Forces who served him without thinking on their role may become disappointed in a way that they might take revenge.

The impact of the Ukraine events may be also a heavy load on the present Russian government. What e.g. Foreign Minister Lavrov said shortly before and after Yanukovich was lifted out of his position by the Ukrainian parliament, went into a direction, which implied that he has not learnt anything. While Russian (state) TV was a bit more diplomatic, it can be expected now that the Kremlin tries out (again) the collective intelligence of its own people, civil servants and politicians. That means without doubt, that there will be also protests, demonstrations etc. in Russia. But the Kremlin would be totally wrong to react with the usual hard measures: police, arrests, trials, the modern gulag etc. The way, the Kremlin will react on the next demonstrations will indicate if they have learnt anything. It they react as harsh as ever, this may end up in a similar situation like in Ukraine, especially after Sotchi. Of course, the EU played a bigger role in the Ukraine, with its Draft Association Agreement, than in Russia, as Russia is not waiting ante portas of the EU – but it is clear that the so-called „European values“ will now play a bigger role: pluralism, democracy, participative democracy, tolerance, human rights, the rule of law (in all its facets), solidarity, equality, non-discrimination etc. Article 2, 3 et al. EU Treaty (Lisbon Treaty) will be a guiding line for all the countries which are or were foreseen for Putin’s Eurasian Union.

This Eurasian Union, if it were a pragmatic integration tool alone, would not be a problem for the EU. But evidently Putin wants to restore „Soviet Union 2.0“. And the predecessor of the Eurasian Union, the Eurasian Customs Union, is, I am sorry, „ga-ga“. Because e.g. Armenia has to raise its import tariffs from the member countries now from 2,7 to 6,5% to become a member of this Customs Union. There are moer than 800 kinds of goods which should be exempted. This is a huge task to negotiate, and then the Armenian government has to allow to be asked why they want at all into this Customs Union. Any integration System which raises tariffs and therefore prices works against the people – for whom it is originally intended to exist. The EU knows this perfectly, and the Armenian government knows this, but they act against all reasons. It is difficult to understand the Armenian people to swallow this, and above all the government in Yerevan to accept this in principle. The Association Agreement would not have jeopardized any close cooperation between Yerevan and Moscow. The objective of the Association Agreement EU / Armenia would have been the decrease – until zero! – of any custom tariffs, and a free access to the EU Single Market, which is a unique success story for every participant country. The other member states of the Eurasian Customs Union Belarus and Kazakhstan, who take this Customs Union as serious as it merits, sometimes shake their head in view of the Armenian eagerness to join this. Nota bene: Armenia had declared their attachment to the Customs Union on 3rd September 2013, after having celebrated the end of negotiations of the EU Association Agreement/DCFTA only on the 24th July, 2013. Both are imcompatible. This, of course, is the product of pression by Russia,and of nothing else, except an evident weakness in negotiations with Russia from the Armenian side. How this was communicated afterwards, was not subject to any beauty contest, and many European politicians ask themselves now, if they can trust any Armenian declaration. But to complete this, it must be said in the same moment that also Azerbaijan policymaking has many deficits, like e.g. the breach of Council of Europe conventions.

From the Eastern Partnership countries, Georgia and most probably Moldova will continue their way to the EU. Of course sometimes with small curves, but here may be optimism the appropriate position. Armenia will, if it really implements the Customs Union laws, soon be disappointed, and I do not exclude a kind of civil society-based movement there pleading openly for an accession to the EU. This would, of course, also help Armenia towards its problems with Turkey (and also Turkey with Armenia), and with Azerbaijan, including the issue of Nagorno-Karabakh. Azerbaijan will probably not be the Primary subject of any Maidan fallout, as the president, Ilham Aliev, has the Country in not too democratic grips – but in general, the opposition against the present system will be encouraged as well, and nothing can be excluded – and Azerbaijan may be the most corrupt Council of Europe Member State.

Rests still Belarus, the 6th Eastern Partnership Partner state. In Belarus, where many activists helped on the Maidan (and some of them have even been killed by the Berkud Police Forces and/or the Secret Service sniper units), this may become an issue. Above all, the economic situation of this country is deplorable, and it can not be expected that Russia feeds open-end barrels without bottom. So Belarus will soon have another look for more EU support. Belarus is a country which cooperates already now, so far it does cooperate, correctly with the EU. This is not the way its president Lukashenko preaches, but it – and he – does.

After all, there will be further centripetal power of the European Union. The EU is not a nationalist event, nor a military or likewise system (as the German party „Die Linke“ recently said), but a chance for all of the Eastern Partnership countries to join. Sooner or later this will happen, and we are now exactly in the situation when the Soviet grips have been loosened to the e.g. Baltic countries in the early 1990s – states are today seasoned, experienced and very positive European Union members. After all, the EU enlargement policy will get a new boost, even if the issue of enlargement is not explicitly pronounced – as the EU often had fears to tell it to its own people. This has to finish, and in the EU everything which has to come has to be discussed. The Ukraine events have probably woken up the EU citizens, or a great deal of them, and the fact that the next Ukrainian election will be held on the same date as the 2014 European Parliament elections, namely the 25th May, indicates that Ukraine is now ante portas as well. Maybe not in the next 5 or 10 or even more years. But nobody should forget that e.g countries like Latvia have been a EU Member State exact 10 years after the application was made. And that the economic development of all new Central and Eastern Member States went into the right direction. It is not necessary that the same economic Level has been reached by any future member state immediately – it is only important that the economic policy follows the right direction, to join the EU which has also high disparities within its Member States.

So, nobody should be astonished, if in other Eastern Partnership states, like e.g. Armenia, Azerbaijan, Belarus, or in Russia, or in Bosnia-Herzegovina or Turkey, similar movements like on Maidan might occur.

EU Advantages for Ukraine

„EU advantages for Ukraine“ is an op-ed by Ilya Timtchenko from Kiev/Ukraine, first published in the English-language paper Kyiv Post on 15.12.2013. We recommend the Kyiv Post (www.kyivpost.com) which provides a 24 hr topical coverage about the events in Ukraine – not only in Kiev. And this is the op-ed article:

Dec. 15, 2013, 11:40 a.m. | Op-ed — by Ilya Timtchenko

For those who still doubt, the European Union is Ukraine’s best option.

For good reasons, much of the attention of the Ukrainian protests has been put on being pro-civil rights and not necessarily on pro-European integration; yet, it is also important not to forget the economic consequences of Ukraine’s only two options – the EU or Russia’s Customs Union.
At a quick glance, here is an overview of Ukraine’s economy. According to the World Bank, Ukraine is in the lower middle-income level with a $3,500 GNI per capita. The income share held by the lowest 20% slightly increased since 2004 to 2010 from 9.0% to 9.9% respectively. In contrast, the income share held by the highest 20% decreased from 37.3% to 35.7%. This means that almost no progress at all has been made in decreasing the gap since the Orange Revolution. In addition, Ukraine is expected to experience a 15% devaluation of the hryvnia peg to relieve pressure on Ukraine’s foreign-exchange reserves. Ukraine’s economy has been in sharp decline in the past two years and its near-term growth outlook and stability are worrisome. Lastly, nominal incomes of Ukrainian citizens are being strongly underestimated relative to their real purchasing power.
Ukraine’s proximity to Russia has always been a concern for the EU. The two countries’ relatively high social integration ties are a strong factor in evaluating Ukraine’s economic institutions with Russia.

The CIS has been a handy tool for Russia to achieve these integration attempts since the perestroika. Putin has been attempting to build unions similar to those of EU yet with some “minor” differences. Though it might seem attractive at first glance, bringing back an economic union between post-Soviet states is far from realistic.

Conveniently for Russia, most of the treaties are structured in a form of economic dependency on Russia. Therefore, institutional formality of the CIS is not helpful since Russia will do what is best for Russia. Most importantly, cooperation does not exist to any great extent, and Russia’s bullyism does not help. The 2006 trade wars on gas pipes between Russia and Ukraine are one example. The share of intraregional exports in the CIS region majorly declined from 57% in 1994 to 31% in 2004 while imports declined from 59% to 46% respectively. Sociological surveys confirm that post-Soviet citizens do not have confidence in the CIS integration projects. Economic reforms cannot work on the basis of CIS: the states are too weak and Russia is too bossy.
Without doubt, corruption has a significant negative effect on Ukraine’s economy. Unlike tax, corruption is not transparent, creating arbitrariness and uncertainty and therefore a decrease in FDI. With low democracy there is a strong correlation with lower demand for regional cooperation. If Russia would increase the quality of its institutions then the share and volume of Russian investments would increase. Yet, the likelihood of this happening in the near future is very unlikely.

Russia does not have much to offer, and Ukraine has an attractive alternative – join the EU – the economic benefits of which include aid and trade. As for the EU, Western policymakers affirm that Ukraine is crucial for stability in Europe, and that uncertainty in Ukraine is uncertainty in Europe. This means that support and assistance toward Ukraine means a more stable and prosperous Europe.

The EU is Ukraine’s largest trading partner. Ukraine receives EU protection and preferences for key products such as animal and vegetable oils, processed vegetables and fruits, clothing and certain steel products. EU trade policies are not a significant barrier for Ukrainian exports, and the primary constraints are internal. EU’s recent border expansion is a positive result for Ukraine, which contributed to additional FDI attraction and positively impacting Ukraine’s industrial products. These results will only accelerate if Ukraine joins the EU.

Ukraine’s export relationship with the EU has been growing while declining with Russia. 2002 was the first year when Ukraine’s exports to the EU were greater than those to Russia. Standard trade models highly predict that the EU market will be of much more importance for Ukraine. According to the World Bank, these estimates predict that a trading country of Ukraine’s economic size and proximity to major markets has a potential of exporting more than 40% of its total exports to the EU. Lets not forget that economically Russia is very small relative to the EU: its GDP mass is approximately 40-50 times larger than that of Russia!

Other countries in the region have much stronger trade with the EU. For example, more than 50% of Poland’s exports go to the EU. During the period of 1996-2002 the net FDI per capita in Poland were approximately 8 times larger than in Ukraine. The geographical reorientation of the trade of these countries toward the EU happened relatively fast and early because they signed FTA’s and association agreements.

In order to strengthen the Ukraine-EU trade policy relationship, Ukraine must improve the competitiveness of Ukrainian firms on international markets, its domestic business environment and strongly aim to attract FDI (something Yanukovych failed at doing). Ukraine must also seriously restructure its trade toward more diversification and specialization since it seriously underutilizes its geographic advantages. Though EU’s strictness is a key factor in delaying Ukraine’s access to the EU, it also plays a major role in improving Ukraine’s quality of standards and efficiency of its economy.

EU is Ukraine’s only best option. To a great extent, Ukraine’s upcoming inflation could be offset through applying a competitiveness boost – something the EU partnership can provide. Ukraine not being a part of the EU, places the country in a clear disadvantage compared to its Western neighboring countries. The associations agreement that Yanukovych failed to sign was meant to wax Ukraine’s exports and provide more economic stability. Corruption will plummet. In turn, this will attract trade not only with the EU but will open windows to the rest of the world’s largest and most successful economies.

Armenia as EU Member State? Not Impossible, Says Ofelya Sargsyan In Her New Book

An enlarged version of a Master thesis for a M. A. degree in European Studies (University of Flensburg / Germany, International Institute of Management and European Studies), this book based on a lot of sources, interviews and other empirical research shows a thorough scientific depth. Besides it is the first book in the literature landscape by any – in this case Armenian – author pleading openly for an Armenian membership in the European Union. When writing this study, the author wanted originally to describe a more or less slow changeover of Armenia towards the EU, when not only she was surprised by the announcement of the Armenian Government to join the Russia-led Eurasian Customs Union on 3rd September, 2013. This has already induced furies within Armenian politics and above all civil society, and the result at present – before the Vilnius Summit of the Eastern Partnership at the end of November 2013 – is open.

But one thing is for sure: If Armenia would go indeed into the Customs Union and later into the Eurasian Union, the results, the economic benefits, the neglecting of necessary reforms, the treatment of matters and of personnel will create a backlash in Armenia (and the EU) which will be the basis of more solidarity than ever with the legitimate security interests of Armenia, possibly with the support of the EU. This backlash will endorse a future, new approach towards the EU.

Ofelya Sargsyan writes why: Armenia is well-anchored in Europe, since almost 2000 years, and it had more to do with European capitals like Paris, London, Brussels etc. in the 2nd half of the 19th century than people think. Of course, it would be a European border region, but together with Georgia – which also strives into the EU – it could be just this. The book deals with geographic, political, economic and cultural reasons, why Armenia should follow a clear foreign policy towards Europe – which has not at all to collide with special and privileged relations to Russia.

The impressive history of the country’s relations to the Council of Europe and the EU is well described, as well as the EU’s perception of its hypothetic move. But also the positions of Turkey, Azerbaijan, Nagorno Karabakh and Iran as well as of Russia and of course Georgia are described as those of neighbours interested in the regional integration orientation of Armenia.

The author, belonging otherwise to an „impatient“ young generation, knows perfectly, that the EU membership takes a lot of time, but she pleads – in an outspoken, but never „pushy“ way, for a sustainable change in Armenia’s foreign policy – a change which since more than 20 years of Armenian independence would not have to be a real change, after all.

Further informations on the book flyer, to be downloaded on the LIBERTAS – European Institute homepage:

Klicke, um auf Flyer_Sargsyan.pdf zuzugreifen

OS_2_130817_at_Serb_Museum_BUD

The Author, coming originally from Yerevan, studied English philology for her B.A. degree and made her first Master (M.A.) in Political Science and International Relations at American University of Armenia, with a thesis on a financial subject. Since the end of 2011 she lives in Germany where she studied for her 2nd Master (M.A. in European Studies) at the University of Flensburg. Besides working for the press service of the Central Council of Armenians in Germany (Zentralrat der Armenier) whom she represented various times, also on conferences and TV discussions in Armenia, she is also Junior Editor of „European Union Foreign Affairs Journal“ (EUFAJ) where she covers among others Eastern Partnership, and Russian-speaking countries, minority issues, and book reviews.

Ofelya Sargsyan: Pleading For Armenia’s Accession To The European Union
130 pages, October 2013.
ISBN 978-3-937642-50-5 – e-book/PDF 5,99 EUR;
e-book/Amazon Kindle version 5,99 EUR;
ISBN 978-3-937642-49-9 – Paper Edition 15,00 EUR (from 15.12.2013)

Orders for paper edition in any bookshop or by e-mail, for eBooks (PDF Version – immediately available after 20.10.2013) by e-mail: LIBERTAS – Europäisches Institut GmbH (LIBERTAS Verlag), Lindenweg 37, 72414 Rangendingen, Germany, Tel. +49 7471 984996-0, Fax +49 7471 984996-19,
e-Mail: verlag@libertas-institut.com, Internet (Book Shop): http://www.libertas-institut.com.
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What the Association Agreement EU – Armenia Really Says And What It Means For The Economy

By Hans-Jürgen Zahorka

The text of the Association Agreement (AA) and the Deep and Comprehensive Free Trade Agreement (DCFTA) between the EU and Armenia is still unknown to the grand public. However, it can be assumed that all agreements between the EU and the Eastern Partnership Member States will be very similar and even coincident in very many aspects.

The EU-Ukraine AA is known, at least from a draft version. It comprises more than 900 pages and has lots of provisions which refer to detailed trade issues, EU customs numbers, and many trade details. This AA is not only a new version of the old Partnership and Cooperation Agreement (PCA), but as a detailed document in particular for the economy even a roadmap to further EU integration. Although this was never spoken out, its finality could be in a number of years the logical step of the AA countries from the Eastern Partnership of an application to accession to the European Union. Armenia could feel to be stimulated to do exactly this, after some years, for economic and political reasons; the latter exactly then if Russia would follow in a linear way its present policy. Of course this then depends if Armenia would then still have any sovereignty at all. But the Customs Union in ist present form would turn out as a centrifugal solution for Armenia, whereas the EU Agreements would be of centripetal and concentric effect.

There are lots of tasks in approximation in these AAs – from extensive harmonization to safety rules for products (e.g. product safety, product liability, toys, electromagnetic appliances, pressure vessels etc.), company law (the EU Directives will have to be taken over, by a kind of „transposition“ very parallel to the EU), to general clauses like the common heritage as well as the one for European integration, and to many dozens of pages with lists for accepting geographical origins for food products, wines etc.

Whoever flies over this text will see that the Eastern Partnership countries will be sooner or later a part of the EU Singe Market, a huge market without borders and custom controls, with a lot of purchase power, and the idol of all other regional integrations in the world. The Eurasian Union has obtained the name „USSR 2.0“ – not without reasons, as Russia will always be the dominant power, and is already so in the Customs Union. It is still to short to give a final verdict about the Customs Union now, but it does not always funcitn well where it should – this also to some Soviet-style mentalities within the respective member states.

The mistake of the EU may be that it never boasts of this success – it is too modest. This can be understood, as it is no single state structure but one of cooperation and integration of now 28 Member States, of a structure which never had any tradition or history of imperialism or making other peoples its slaves. Its communication lines are targeted to the inside of the EU only, and then more to its mere functionalities. When it comes to military force, the EU can rely only on its Soft Power – not on any Hard Power; the EU has no army, but is dependent of cooperation between its Member States. Is it therefore weak? No, as its Soft Power can be defined as the power of weakness, and as Hard Power of someone else can be defined as the weakness of power. The power of weakness is its integration, the cohesion of its people when confronted with EU principles, and that it is self-evident to be now in the EU, which has created a period of peace among the Member States longer than at any time before in history, and we are not at the end of our history.

When Armenia and the EU trumpeted both on 24th July 2013, they were both happy to have finished the draft of their bilateral agreement, which may have between 800 and 900 pages. Six weeks later, all this was suddenly in vain, after one mere talk between the Armenian and the Russian presidents? It must be clear that this agreement of almost 1.000 pages cannot be have negotiated with the purpose of not being put into power. The absolute contrary was the case, and this almost for four years. This is what it makes evident that Armenia encountered some extraordinary pressure. This was on 11./12.7.2013 also exactly the subject of the famous Statement of Commissioner Stefan Füle and of a cross-party tabled resolution of the European Parliament – both very particular measures. But if one examines what has been said about Putin and Russian foreign policy before in many European Parliament articulations, there is one logical line, namely that the EU wants e.g. civil freedoms for Russian citizens like for its own. But this is not the place to argue about minority treatment, xenophobia, selective justice, and administrative corruption etc. in Russia.

Now some people from Armenia spoke recently to sign now anyway the Association Agreement, but not the DCFTA. One of the „Whereas“ indents says however,

„DESIROUS of achieving economic integration, inter alia through a Deep and
Comprehensive Free Trade Area (DCFTA) as an integral part of this Agreement, in
compliance with rights and obligations arising out of the World Trade Organisation
(WTO) membership of the Parties, including through extensive regulatory
approximation;

which means clearly that the principal agreement will be the AA and then only as a secondary agreement the DCFTA (words underlined by the author). Therefore it may not be so easy to sign the AA only and not the DCFTA, without saying bye-bye to the project of the Eurasian Customs Union. The CU agreement does by far not go so deep in any approximation details and therefore in market integration (which, quantity-wise, would be to 165 mill. population of Russia, Kazakhstan and Belarus, compared to the 520 mill. of the 28 EU and 3 EEA/EFTA Member States). With the AA, Armenia would be continuously reformed in a way that its economy would be competitive on the European and therefore on the world markets. I do have serious doubts if this would be the case with the CU – who keeps oligarch appearances meaning that the economy would not be exposed to a real competition (for which Armenian competition law will be further adjusted, also the whole intellectual property law), where strategic investments will be in very few Russian hands (railway, telecommunication, energy etc.), and where there is no external reform pressure on the economy. The latter means, that Armenian economy would not proceed as well as it would be the case with its relevant relations to the EU. These would, by the way, also for the first time in an international framework agreement for Armenia, include the protection of the environment, and social standards, and health and safety at the workplace – just to name a few.

The next indent of the AA:

„RECOGNIZING that such a Deep and Comprehensive Free Trade Area, linked to the
broader process of legislative approximation, shall contribute to further economic
integration with the European Union Internal Market as envisaged in this Agreement“,

is nothing else what has been already written in the old PCA from 1996. Therefore this (new) AA has no impact on security etc. It leaves the finality to the respective countries, i. e. if they after some years want to join the EU as Member States, it will be their affair at first, as it was until now.
The truth behind all this seems to be that in particular Vladimir Putin is scared of the European model, which is defined in the articles 2 et al. of the EU-Treaty (Lisbon Treaty), with values like human dignity, freedom, democracy, equality, rule of law, human rights, and a society based on pluralism, non-discrimination, tolerance, justice and solidarity, as well as equality between women and men. Of course, we all have to fight in the EU every day to keep these pillars of human existence – but Putin and his regime, although being more liberal than former Soviets, is committed to these things mainly in words, in legal articles, but certainly not always de facto. Whoever doubts this position – well, this would need another article. So, like Georgia, like Moldova, like Ukraine, the Armenian government should have made clear to Russia that its geographical position would drive it to be an excellent bridge between Russia and the European Union, and that being in the same security alliance does not bother it to keep this bridge function (there is no other security alliance in the world which demands of its member countries to come into a customs union).

What scares me even more than the position of the Armenian president, who might not be the most gifted economist on earth, is that from his own parliamentary group, the Republican Party, came no big objection, not even a thorough discussion about the whole scheme, but only justifications „sans justificatif“. Is this a consecration army without any autonomous will – like it exists in all other free parliaments? Is there really a parliamentary majority in Armenia who swallows this without any discussion? Some people in the EU say, if so, Armenia can join „USSR 2.0“, and the European Union will wave good-bye. It is indeed a matter of political culture that a parliamentary majority group discusses this thoroughly. The first signs, however, were not very encouraging. And, by the way, we now „interfere“ in other countries‘ politics – there is no domestic policy any more anywhere, but so far this was not be heard anywhere. At least this!

After all, there are still some options for Armenia. Austria was under a likewise pressure from the Soviet Union between 1986 and 1994, but it resisted. I took part in many discussions in this country at that time, when some Russian generals or deputy ministers – who in every democracy keep their mouth in the domain of foreign policy of other countries who do not directly threaten theirs – expressed themselves in the usual, rude way. Let them bark, again – this is good for the lungs. Armenia could have – and still can – made her security concerns to the object of a debate within the EU. As she agrees to the OSCE Minsk Group principles, it could be easy to launch also an EU debate on this basis. After all, nobody from the EU provides Azerbaijan with weapons worth several billions of euro.
Some day – and not too far in the future – it must be clear that also the European Union will have elements of a common foreign policy (it starts with elements, yes), and that the EU will not have a too-Christian attitude to offer the left cheek if it gets a slap on its right cheek. The EU can also withdraw its face, what nobody wants right now (out of Moscow). The President of Armenia should verify once more, if he wants to become totally incredible and incomprehensible, or if he really steers his country through a possible rough sea. This should go together with a creative diplomacy: towards the possible „double-pack“ neighbour Georgia, to Turkey, to Russia, to the other Eastern Partnership countries, and regarding also Nagorno-Karabakh to Azerbaijan, too. In these contexts, Armenia is well advised to delegate as much as possible to its civil society which is always more accepted than any government initiative.

Armenia is after all not yet „lost“, but it is not five, but two minutes before High Noon.