Since 2014 a difficult relationship between the European Union and the Russian Federation turned sour over the fate of Ukraine. With the annexation of the Crimean Peninsula hosting the bulge of the Russian Black Sea Fleet and the support given to separatist militias in the far Eastern parts of Ukraine in the Donbas region, Moscow had shown its resolve to influence a European country using force. Although it had been the second time of such a military intervention after the 2008 five-day war against Georgia, the EU appeared shocked and unprepared. All bilateral treaties between the EU and Russia have been suspended, cooperation and financing frozen as well as sanctions imposed (European Parliament, 2020).
Economic relations between the European bloc and Russia have consequently seen setbacks in some trade areas but, nevertheless, remained significant for both sides. The EU stayed Russia’s biggest trading partner and, vice versa, Russia ranks still as the EU’s fourth biggest one. Both sides have placed embargoes on each other in a few trade areas, but gas and oil imports from Russia to the EU have continued to be substantial (26% and 40% respectively of total EU energy imports) in 2020 (European Commission, 2021). Russian gas transit through Ukraine had plummeted only temporarily after 2014 and again last year (55.8 billion m³ down from 89.6 billion m³ in 2019 (GTSOUA, 2021). The recent fall may be mainly due to lower European demand due to Covid-19 related economic shutdowns.
Today we encounter several areas of friction between the EU and Russia in relation to Ukraine. The most urgent ones being Moscow’s opposition to Kyiv’s efforts to join the EU and NATO, the Russian occupation of Ukrainian territories, the mutual sanction regimes levied upon politicians, businessmen and companies, as well as the construction of Nord Stream 2. A further issue concerning the internecine interests of some powerful Ukrainian oligarchs with large political influence in parliament and Russian forces would be too vast to cover here. Suffice it to say that the EU has not found any effective tool to drain this quagmire.
The Russian opposition to Ukraine’s efforts to formally join the Western bloc was one of the triggers of the ensuing 2014 crisis. In November 2013 Yanukovytch had refrained from signing the Deep and Comprehensive Free Trade Agreement )DCFTA) that had been prepared after years of negotiations between Ukraine and the EU. This sparked protests around Ukraine, eventually focusing on the Maidan Square in central Kyiv barricaded by protesters. The culmination of protests and their suppression from the government’s side were deadly clashes of protesters with military units in February 2014. After having been ousted from his presidency Yanukovytch fled the country and snap elections brought Petro Poroshenko who had run a pro-European campaign to power. Poroshenko signed the DCFTA in June 2014. Of course, by then the separatist Donbas region had been drawn into armed confrontations supported by Russian troops (famously wearing no ensigns and dubbed “little green men”) with the Ukrainian army and Crimea had been annexed without bloodshed by Russia (Hale, 2015; van der Loo, 2016).
These developments in turn begged an answer from the EU (and the US) which came in the form of a broad sanctions regime on Russian (and Ukrainian) politicians and former ministers allegedly involved (directly or indirectly) in the occupations or active in these areas (Council, 2018). As a response to the annexation of Crimea a UN resolution in 2014 condemning the actions and demanding the reinstitution of Ukraine’s territorial integrity was passed (UN, 2014).
To resolve the conflict in the Donbas region around the self-declared independent People’s Republics of Donetsk and Luhansk, the governments of France, Germany, Russia and Ukraine came together in the Normandy format. The group has convened several times since its launch in June 2014 to discuss possible solutions (the last two meetings took place virtually). In February 2015, the Minsk II agreement was signed in the Belarusian capital to renew the first agreement on a ceasefire from the autumn before (Telegraph, 2015). Although the pullout of foreign troops and measures to protect the civilian population and further the peaceful solution of the conflict were set, no tangible progress has been made so far. The latest meeting in the format of a video conference between the participants of the Normandy Format in April of this year did not produce any real breakthrough but lip service being paid to implementing the Minsk agreements (Reuters, 2021). Also, even though the sanctions caused economic and financial damage to Russia in the range of about $50 billion per year, the situation on the ground in Ukraine has not changed (Åslund & Snegovaya, 2021).
Nord Stream 2 presents another challenge between the EU and Russia. The construction of a second gas pipeline through the Baltic Sea from Russia to Germany is a threat to Ukraine. With a maximum capacity that would just replace (together with Nord Stream 1) the gas volumes transited through Ukraine, Kyiv has invested a lot in lobbying against this undertaking (Janjevic, 2018). The potential impact on Ukraine from an economic perspective would be a loss in revenues from gas transits from Russia. However, more importantly, the diverging of gas flows away from Ukraine would change the geopolitical balance in Europe and increase Germany’s role as a gateway of Russian gas to the European market. The US sanctions imposed by former President Donald Trump on Russian and European companies involved in the construction had halted the project; but President Joe Biden’s recent decision to waive these sanctions will certainly impact the relationship (BBC, 2021).
Possible ways forward in the EU-Russia relationship will require Brussels to rethink its overall strategy. A complicating factor remains Moscow’s habit to mostly ignore the EU institutions and their representatives in favor of dealing with individual member states instead, as can be seen in the Normandy Format. Nevertheless, holding on to the Western sanctions regime, they can be made more poignant by targeting them on the inner circles of President Vladimir Putin, affiliated oligarchs and Russian foreign debt as suggested by Åslund and Snegovaya (2021).
In regard to the occupation of Crimea, one has to first appreciate the geopolitical significance of its strategic location. Control over Crimea does not only allow to command the sea lanes of the Black Sea, the peninsula oversees the access to the Sea of Azov. The Don flows into the Sea of Azov and thus links it to the heartland of Russia’s Western parts. The Don is connected through an immense canal system to the Unified Deepwater System of European Russia linking it to the Caspian Sea and the White Sea in the North (Rostransport, 2011). This shows the importance of Crimea for Russia’s security and a continuing Western denial of this reality will impede any political resolution of this aspect of the conflict. That Russia is not bent on simply surrendering Crimea to Western demands can be seen in the massive investments on military installations on the peninsula (112 Ukraine, 2021).
Whereas the prospects to solve the Crimean conundrum seem grim, there is reason for hope to find a solution to the smoldering conflict in the Donbas region. The Donbas should not be seen as a homogenous entity; in fact, there is a fixed border between the two areas with passport controls for locals at checkpoints and most traffic from one area to the other goes via Russia (which increases travelling time and costs and impacts families split apart through the border). So far, crucial industrial, transportation and communication lines have remained under joint control, but divisions grow and threaten the links between the two. Furthermore, tariffs have been introduced on goods traded between the two putting more stress on a fraught situation. This lack of coordination is damaging to Russia’s posture in the Donbas, leading to a growing alienation of ethnic Russians living there from Moscow, which may further support for the reintegration into Ukraine (Kovalchuk, 2021). Leveraging these incongruencies with EU assistance could speed up at least a resolution of this side of the conflict.
The recent US decisions in relation to Ukraine may change the dynamic of the EU’s relationship with Russia. Besides lifting the Nord Stream 2-related sanctions welcomed by Germany, the upcoming NATO-Ukraine commission meeting at the NATO summit in June was cancelled by the US administration (Socor, 2021). Neither decision has prompted Brussels to react yet, despite the latter adding insult to injury for Kyiv. It then seems unlikely that EU institutions will now be able to oppose the completion of Nord Stream 2, also considering the involvement of the French (Engie), the Dutch (Shell) and the Austrians (ÖMV). Instead, a course of action could be to help Ukraine tap into its natural riches and increase its own energy production, of fossil as well as of renewable resources. Assuming a less ideological position will help the EU to reap tangible benefits to do good on its promises and to improve the lot of Ukrainians.
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By Mahmoud Refaat: The European Institute for International Law and International Relations.
Contribution: Andreas Rösl, The European Institute for International Law and International Relations.
