INTRODUCTION

On May 7, Dmitri Medvedev will take over from Vladimir Putin as President of Russia. In this issue of Brussels Briefing we take a closer look at the new President and examine the prospects for EU-Russia relations.

Who is Dmitri Medvedev?

Dmitri Medvedev is a long-time friend and ally of Putin. They have known each other since the early 1990s, when they worked together in the St Petersburg Mayor’s office. He is currently serving as Deputy Prime Minister and Chairman of the huge state-owned gas company Gazprom. Unlike Putin and many of his more ‘hard-line’ allies, Medvedev does not have a background in the military or security services. He is a lawyer by training and is regarded as a pragmatist on the liberal wing of the government.

Why did he win the election?

In the Presidential elections held in March, Medvedev won a landslide victory, receiving just over 70% of the vote. Observers from the Council of Europe concluded that the result broadly reflected the will of the people, but criticised many aspects of the election. State media coverage was one-sided, some public sector workers were forced to vote for Medvedev in their offices, and the liberal opposition candidate Kasyanov was prevented from standing on a dubious legal technicality.

Putin’s support was by far the biggest factor in ensuring Medvedev’s victory. Medvedev has never held elective office and lacks campaigning skills. Although he has built up a reputation as an able administrator, questions remain over whether he has the ability and character to be a national leader.

Will his policies differ from Putin’s?

Given that his main qualification for the Presidency is his total loyalty to Putin, radical changes look unlikely. On the eve of his election victory, Medvedev said his policies would be “a direct continuation of President’s Putin’s path”. However, he has made some encouraging pronouncements. In the opening speech of his campaign, he said that democracy and freedom were the only paths to prosperity, underlined the need for a powerful and independent media and called on Russia to respect the rule of law.

The balance of evidence suggests he is probably more a moderniser than a democrat. He will likely emphasise improving Russia's transport, industrial, and social infrastructures, which have been his responsibility as Deputy Prime Minister. In foreign policy Medvedev is widely regarded as less combative than his predecessor and keen to bring about a rapprochement with the EU and the US.

What is the current state of EU-Russia relations?

Relations between the EU and Russia could at best be described as strained, with a long list of issues dividing us. Russia opposes independence for Kosovo, has imposed a ban on imports of Polish meat and refuses Britain’s request to extradite Andrei Lugovoi, accused of using radioactive poison to commit murder on British soil.

For too long Russia has successfully tried to ‘divide and rule’ the EU. Many countries in the former Soviet bloc have taken a tough stance and tried to block the negotiation of a new EU-Russia agreement. Other western European states have tried to form a special relationship with Russia, disregarding pre-agreed EU positions. Such divisions have weakened the position of the EU and allowed the Kremlin to assert that the EU cannot be taken seriously.

Does Russia hold a ‘gas lever’ over the EU? Who needs the other more?

At the moment the EU relies on Russia's state-owned Gazprom for around a third of its gas supplies. This is set to greatly increase in future as our own reserves run out and we become more dependent on imported gas. The fear is that Russia may use its gas as a political weapon, heightened by Gazprom's recent suspiciously timed price increase in the Ukraine after elections which had brought a pro-western leader to power. The EU has so far allowed Russia to undermine its attempts to import gas from the Caspian and Central Asia, sealing deals to divert the regions' gas to Russia and providing potential European customers with alternative Russian sources.

However, if Europe can stand together, our position is strong. Two-thirds of Gazprom's revenue comes from European customers. Most of Russia's gas is sold at a loss on the home market, helping to stave off social unrest. Not only that, but Gazprom's taxes provide a quarter of the Russian government's budget. It is Kremlin coffers stuffed with energy riches which have given Russian leaders the confidence to stand tall after the perceived humiliation of the 1990s.

Russians need good relations with the West and the EU in particular to make their country strong and stable. More than half of Russia’s trade is with the EU and most of its rapidly growing foreign investment comes from there. More western money and expertise will be needed to maintain and expand the output of Russia’s energy sector and modernise the rest of the economy. Russia’s big companies are listing on the London stock exchange and they are increasingly investing in EU countries. So both the business and the political elites have a big stake in maintaining good relations with the European Union.

Conclusion: A more united EU approach is needed

Europe should use the arrival of Medvedev as an opportunity for a fresh start. The EU has a basic choice to make. Either member states continue to pursue bilateral agendas, but ultimately lose out, or it can unite and exercise real influence over the relationship with Russia. If the EU wants to have Russia as a reliable and democratic neighbour, it must build its partnership with Russia on the same foundations that have made European integration a success – interdependence based on stable rules, transparency, fairness and consensus.

The EU should insist that Russia upholds the rule of law, eliminating the need for abstract lecturing. Medvedev has made encouraging noises on the subject and we must hold him to them. Russia cannot be allowed to force out European companies or harass and close down British Council offices on a whim. Through its membership of the Council of Europe and the OSCE, Russia has an obligation to protect democracy and civil liberties. When Russia brazenly flouts agreements it has signed, Europe should speak out with one voice.

Gary Titley MEP
April 2008