The Russian Question
By Ulrich Speck

Recently Yulia Timoshenko, the charismatic leader of the Orange Revolution in Ukraine in 2004 - now leader of the opposition in parliament - gave a speech in Berlin on the geo-strategic issues of Russia, energy, and the EU. Its energy dependency still makes Ukraine vulnerable to Russian blackmail, and only EU membership would protect Ukraine's independence against Moscow's attempts to regain control over the country. "Do not close the door to EU membership," Timoshenko said in Berlin.

The former Prime Minister - from January to September 2005 - brought along a proposal in her luggage: a new pipeline project, from Central Asia to Europe, which would bypass Russia and therefore strengthen energy diversification for Ukraine as well as for the EU. Turkmenistan also has an interest in becoming more independent from Russia, Timoshenko pointed out - so why not build a pipeline from Turkmenistan and the Caspian Sea towards Western Europe, via Ukraine?

Responding to Timoshenko, German MP Karl-Georg Wellmann from Angela Merkel's CDU first lined out what can be seen as the official diplomatic German view: Berlin wants to keep Ukraine stable, yes, but the energy questions must be solved "in consensus with Russia." On EU membership, Wellmann avoided giving a direct answer, but praised the virtues of European Neighborhood Policy (ENP).

But then, surprisingly, Wellmann changed the tone. The gas crisis between Russia/Gazprom and Ukraine in early 2006 was "a wake-up call," he said. The Baltic Sea pipeline must not bypass other EU members; it should become interconnected in a way that it cannot be used to put pressure on Eastern European countries. Also, Germany has to work more on energy diversification, which is a "common interest" shared with Ukraine.

Wellmann also made clear that he has no illusions about what is going on in the South Caucasus region. The deeper reasons for Russia's conflicts with Georgia are Moscow's attempts to gain control over that region again - as the South Caucasus serves as a "bottleneck" for energy supplies between Central Asia and Europe. The EU is committed to stabilizing Ukraine and Georgia, he said, and ENP will be a tool for that.

The Berlin event put a spotlight on current geo-strategic developments: as Moscow is pushing to regain control over what it sees as its "sphere of influence," using energy to put pressure on its neighbors, the EU has to find a strategy to secure its own interests in the non-EU parts of Eastern Europe, in the South Caucasus, and in Central Asia. Two interests are essential: on the one hand, making sure that Russia does not become an empire again, treating its neighbors as mere satellites; on the other hand, and related, diversifying its own energy supply sources and keeping the routes of transport free from a monopoly by the Kremlin.

Whether it's possible to achieve these goals "in consensus with Russia" becomes more and more questionable. The more Moscow puts pressure on its neighbors, the more Russian and EU interests come into conflict, a conflict that the EU - and especially Berlin - absolutely wants to avoid, as it still sees Russia as a potential "strategic partner." The result of this dilemma is a double-tracked EU policy. The EU now follows both paths: maintaining positive relations with Moscow - as positive as possible -, and developing stronger relations with Russia's western and southern neighbors.

Since the breakdown of the Soviet Union in 1991, European-Russian relations relied on the assumption that Russia would be on a path that lead the country towards integration in Western structures and frameworks. German Foreign Minister Frank-Walter Steinmeier's latest announcement about a new "Ostpolitik," which includes further linkage (Verflechtung) with Russia, is still guided by that school of thinking. But this school comes under more and more pressure now.

An integration of EU and Russian spaces is only possible if there is a compatibility of the respective political and economic systems, as well as a common understanding on principles and goals in foreign policy. But in the last few years it has become obvious that Russia is moving towards an authoritarian system where the state controls politics and the economy. Corruption is endemic, the rule of law weak, and democratic freedoms and human rights are less and less respected by a government that often resorts to arbitrary violence in order to achieve its goals, in its domestic affairs as well as in foreign policy. The murders of prominent Putin critics cast further doubt about the current Russian leadership. What was a hope - that Russia would become a functioning democratic market economy - looks more and more like an illusion.

And there is another deep concern now - that Russia might not be able to deliver on its promises to act as a reliable energy supplier. Energy security was the main argument for those who argued for a closer relationship with Russia. Even if Russia becomes more autocratic, the argument went, Putin will make sure that our houses are heated in the winter and that our industry has the fuel we need for economic prosperity.

But new reports on the Russian energy sector are putting a big question mark next to these assumptions. Instead of investing in the developments of new fields and in the pipeline infrastructure, the Kremlin-controlled Gazprom has concentrated on a wide range of political and economical activities that are unrelated to its core business. Gazprom now has to buy cheap gas from Central Asia in order to meet its contractual obligation. There is rumor now that gas prices for Europe will increase by fifteen percent.

Apparently, Putin's "energy empire" has only a short lifetime. The Russian president, who called the collapse of the Soviet Union "the biggest geopolitical catastrophe" of the twentieth century, has done a lot to rebuild Russian state power and influence on the control of the energy sector. But now it looks as if this strategy has weakened and damaged both the state as well as the energy sector. Putin may have taken control, but the ship has lost steam, as the necessary overhaul did not take place.

It now looks as if the whole conception of an "energy empire" is built on sand. "What if Russian gas runs low?" The Economist asked recently. Another "wake-up call" might come this winter when the energy shortages might put the Kremlin under pressure: "Will Vladimir Putin decide to freeze his own voters, or those of neighboring countries? One choice risks provoking a political explosion, the other a diplomatic one. If you live anywhere between Aachen and Amur, do check your stocks of candles and coal."

What Europe has to fear, in fact, is not a strong Russia but a weak Russia. The country's recent economic revival is not the result of an investment in human capital, in infrastructure and a reliable economic framework; it's built on the contingency of high oil and gas prices. Public health and education are in a bad state, and the demographic outlook is alarming. The political system has been overtaken by a group of former secret service members that are obsessed with the idea of restoring the former Soviet glory, instead of rebuilding the country following the model of modern democratic statehood and market economy - a model that has proven to be successful all over the globe.

Russia's weaknesses and its strengths are both challenges for the EU. The country is far from stability, and again the question of the 1990s is on the table: what can Europe do to stabilize Russia? How can it make sure that its interests - prosperity and security - are not endangered by a further decline of its giant eastern neighbor? Putin promised stability, and for a few years it looked as if he could deliver on his promises. Now this assumption turns out to be an illusion.

A new Russia policy can only be successful on an EU level, and with strong transatlantic cooperation. As long as Putin can play out every actor against each other, something he is very good at, the Kremlin will be the master of the game. It might be possible to help Russia find a way towards real stability and prosperity - a future that is not built only on gas or sand - but only if Western Russia policy is thoroughly coordinated.

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Dr. Ulrich Speck is a journalist and foreign policy analyst for Die Zeit and maintains a blog for Die Zeit titled "Kosmoblog."  He also is a former DAAD/AICGS Fellow and a regular contributor to AICGS.

This essay appeared in the December 7, 2006, AICGS Advisor.