Published on European Council on Foreign Relations ECFR, by Mark Leonard and Nicu Popescu, 66 pages, not dated.
excerpt of page 7: … Introduction: The Asymmetrical Interdependence After 1991, European governments grew accustomed to Russian acquiescence.
Moscow might have put up a struggle against European policies – from humanitarian intervention in Kosovo, NATO and EU enlargement, to visa arrangements for Kaliningrad and the Kyoto Protocol on climate change – but the Kremlin’s bark always proved worse than its bite. The Russian government, crippled by massive debt, financial instability and the war in Chechnya, caved in each time because of its reliance on Western help.
Today it is Moscow that sets the pace for EU-Russia relations. The soaring prices of gas and oil have made energy-rich Russia more powerful, less cooperative and more intransigent. Oil money has boosted the state budget and has dramatically decreased the Russian state’s dependence on foreign funding. Russia’s hard currency reserves are the third largest in the world today; the country is running a huge current account surplus and paying off the last of the debts accumulated in the early 1990s.
While in the 1990s everybody was talking about Russian dependence on Western credits, now everyone talks about Western dependence on Russian gas. Moscow has succeeded in regaining a greater level of control over the entire territory of the Federation.
Chechnya is ‘pacified’ – at least for the time being – and President Vladimir Putin enjoys the support of more than 80 % of Russian citizens. Russia’s influence in global politics has increased dramatically as well. It has managed to regain a strategic hold in Central Asia. Putin invested a lot of energy and political skills in building the Shanghai Cooperation Organization into a potential counter-weight to Western influence in the region. Russia’s military budget has increased six-fold since the turn of the century and its intelligence network has penetrated all corners of Europe.
Russia’s growing confidence has transformed the EU-Russia relationship.
It is the Kremlin that puts issues on the agenda, pursues them in the face of European opposition and increasingly defines the rules of the game. On energy, Russia is picking off individual EU member states and signing longterm deals which undermine the core principles of the Union’s common strategy. On Kosovo, Russia is blocking progress at the United Nations. In the Caucasus and Central Asia, Moscow has effectively shut the Union out of an area where it has an interest in promoting political reform, resolving conflicts and forging energy partnerships. And in Ukraine and Moldova, Moscow has worked hard, with some success, to blunt the appeal of the European system … (full text).