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EU and Russia (EUC Report)

rose to move, That this House takes note of the report of the European Union Committee on The European Union and Russia (14th Report, HL Paper 98). The noble Lord said: My Lords, I thank my colleagues on Sub-Committee C of the European Union Committee, four of whom will speak later in this debate, our staff and our special advisor, Sir Roderick Braithwaite, for their considerable help in preparing this report. I must confess that, during August, as events developed in Georgia, I began to worry about how far the report and today’s debate were being overtaken by events. It is clear that some things have changed—I have no doubt that reference to them will be made during our debate—but in rereading the report and the government response, which we received on 15 July, I believe that much is still relevant and that we have an important topic to consider today. The Government response on 15 July was sent to us by the then Minister for Europe, now Secretary of State for Scotland, Mr Jim Murphy. I take this opportunity to thank him for his great help to Sub-Committee C of the European Union Committee, both when he came and gave evidence to us and in our correspondence. We wish him very well in his new responsibilities. The report that we are considering today is based on an inquiry that the sub-committee carried out between last July and this May, including a most useful visit to Moscow in December, where we had a very full programme, for which we are very grateful to the assistance of our embassy in Moscow, and to Brussels, where we had useful discussions with the Council Secretariat, including Mr Solana and the Commission. The events of this summer have raised questions about the nature of the long-term relationship between the European Union and Russia. I shall return to this at the end of my remarks, but I believe that a great deal of the analysis and conclusion of the report remains valid. The events of this summer do not change the facts of geography. As we say, "““Russia shares a border with the European Union, with which it is bound by numerous ties of practical interest””." One of the most important of these is energy, where there is a mutual dependence. As the Government say in their response, some 25 per cent of the EU’s gas comes from Russia, while some 25 per cent of Russia’s GDP comes from oil and gas sales to the EU. As we consider in the report, many Europeans fear that the European Union’s dependence on Russian supplies will leave it open to Russian political and economic blackmail, although we concluded: "““In the current situation it is uncertain whether Russian policy is the action of a country simply pursuing its economic and commercial interests in an old-fashioned and mercantilist way, or whether Russia intends to use its energy exports as a political weapon to impose its will on neighbours and partners””." We advocated that, "““EU Member States should therefore take active and coherent measures, involving common funding where necessary, to diversify both sources of supply and transportation routes, including pipelines such as Nabucco, even where these are not obviously commercial””." While the Government witnesses who appeared before us preferred this to be done by the private sector, we were pleased that, in the response of 15 July, the Government accepted that, "““until the single market is fully functioning, there may be a case for greater intervention in very exceptional cases, generally recognised to be those of particular importance to EU internal security of supply, and where genuine market failure can be identified””." This would seem to mean that the case for Nabucco requires examination and, I hope, support. A further serious problem of the European Union’s energy relations with Russia is with the long-term trends in Russian production of both gas and oil. This has not been helped by the difficult experiences of European and particularly British companies in attempting to develop Russian oil and gas fields. We will be interested to see the European Union’s second strategy energy review when it comes out this month, referred to in the government response. As the Government say, the European Union level of action, "““adds value externally through its combined weight and economic power””." Unfortunately, in energy as in other things in their relations with Russia, the member states of the European Union do not always act on a unified basis. In May, when we prepared our report, there had not been agreement among member states on the prospect for opening negotiations for a new agreement between the EU and Russia to replace the partnership and co-operation agreement of 1994, and whether such an agreement would be legally binding. We recommended that the negotiations should start in 2008 and were therefore pleased that, as the government response reported, the EU and Russia, "““launched negotiations on a new agreement at the EU-Russia Summit on 26-27 June. They also announced that their aim was to conclude a strategic agreement that will provide a comprehensive framework for EU-Russia relations for the foreseeable future””." As the response says, it should provide for, "““a strengthened legal basis and legally binding commitments covering all main areas of the relationship””." The Government added that, "““this is very good news, both for the EU and for the UK””," and that it is, "““in both the EU’s and Russia’s to negotiate an ambitious, deep and wide-ranging agreement covering the full range of issues in the relationship. This will bring consistency and predictability to the relationship and benefit both the UK and Russia””." Inevitably, the negotiations were suspended after the Russian invasion of Georgia at the emergency council held in Brussels on 1 September. The Written Statement from the Foreign Secretary issued to the House at the beginning of this week reports that they remain suspended. I hope that in his response the Minister will be able to say something about the prospects for their reopening. Many will have seen the assertion by President Sarkozy in Evian this week that the Russian withdrawal from buffer zones around South Ossetia and Abkhazia was, "““the full implementation of the accords of August 12th and September 8th””." I am not sure that everyone else accepts that interpretation. There is a visit by the French Foreign Minister, Mr Kouchner, to Georgia today. No doubt he will report to his colleagues in the General Affairs and External Relations Council when it meets in Brussels next Monday. On Wednesday next week there is also an important meeting in Geneva to take up some of the details of the arrangements. There is to be a EU-Russian summit in Nice on 14 November. We assume that that will go ahead, as there has been no suggestion in any of the documents that it would be cancelled. Would that be an occasion for reopening the negotiations? I hope that the Minister will be able to respond. Our report recommended Russian membership of the World Trade Organisation, although, interestingly, we found that some Russian industrialists remained quite happy to remain outside. The Government in their July response agreed with us and said, "““Russia in the WTO could only strengthen the governance of world trade and add to global security””." Since the events of August some in the United States have argued against Russian membership. Has this been discussed in the EU? I hope that the Minister will be able to say something about that. What is the view of the Government? One of the more disturbing aspects of the definition of the five components of the foreign policy of Russia made by President Medvedev in his statement of 1 September was the right to defend Russian citizens wherever they lived. That has potentially a particular danger for our colleagues in the European Union living in Estonia and Latvia, as we reported in paragraph 296. We very much welcome the response of the Government on the need to speed up the naturalisation process of Russians living in Estonia and Latvia. Chapter 6 of our report deals with international security and the common neighbourhood. Here, without foreseeing the Russian invasion of Georgia, we quote evidence from a former British ambassador, Sir Andrew Wood, who told us that, "““many Russians feel themselves to have been cheated by the West ... Moscow gave up its international power and got nothing in return. That argument feeds on a tradition of xenophobia mingled with self pity, now compensated for by the idea that ‘Russia is back’ … Putin is not the first to say that the weak are always beaten. The corollary is the conviction that Russia needs to show strength and surround herself with dependable, even controllable, allies””." The then British ambassador, Sir Anthony Brenton, told us that the EU should remember that Russia went through a period which they regarded as a ““national humiliation””. He argued that: "““one of their main aims ... is to recreate a strong stable, successful Russia … They are particularly concerned to maintain and to reinforce their influence in … their immediate neighbourhood in the near abroad, in places like Georgia, Ukraine and so on””." These analyses of Russian attitudes do not in any way justify Russia's over-reaction to the Georgian actions in South Ossetia in August; they indicate the sensitivity of what we described in our report as the ““common neighbourhood””—the countries formerly part of the Soviet Union and now described by Russia as its ““near abroad”” and now involved in the European Union's European Neighbourhood Policy. As the report says, and as the Government’s response agrees: "““We believe the EU should consult in depth with the Russians over all aspects of the European Neighbourhood Policy...but should not give””—" the Russians— "““a right of veto over EU policy””," in these areas. There are, however, other areas of international relations with identifiable common interests between Russia and the European Union. In the report we quote the example of Iran where the negotiations with Tehran, "““are perhaps the most striking example of the CFSP machinery at work with the Russians””." It is interesting that last month at the UN in New York there was a successful meeting of the Middle East Quartet which agreed that there should be a follow-up to the Annapolis meeting in Moscow next year. On 22 September, the Russians voted to continue the mandate of ISAF in Afghanistan. These examples of co-operation lend weight to the argument put forward by Henry Kissinger and George Shultz in an article published earlier this week in the Washington Post, "““that the fundamental interests of the United States, Europe and Russia are more aligned today—or can be made so—even in the wake of the Georgian crisis, than at any point in recent history. We must not waste that opportunity””." The final section of our report deals with managing the European Union's strategy towards Russia. Some would say that, in the light of Russia’s actions in Georgia, our position was too optimistic. The sub-committee has not had a chance to reconsider its conclusions but we did say that, "““EU-Russia relations are ... in a negative phase in a long process of transition””." We also discussed the weakness of the EU positions over a range of subjects because of the reluctance of members to accept a common position towards Russia. As we said: "““The EU will always be more effective when it can agree a united approach in its dealings with Russia ...Too often, however, Member States act in a way which allows the Russians to drive wedges between them””." We expressed the view that: "““The EU's attitudes and policies towards Russia have an uncoordinated character””." We argued that: "““An updated approach should be drafted as a collaborative project between the Commission and the Council Secretariat””." We were therefore very pleased to learn from the Government’s response that in March of this year, as we were preparing our report, the Foreign Secretary and Bernard Kouchner, the Foreign Minister of France, set down in a private joint letter to EU partners some thoughts on how the EU should engage with Russia. As a result much work has gone forward, and we were told that a report will be prepared and put forward at the EU-Russian summit in November. What progress has been made about that? Will the document be made public in advance of the summit? Will it be subject to parliamentary scrutiny? I end on a personal note, rather than with the view of my sub-committee. We concluded in May that: "““The European Union is not facing a new Cold War””." I believe that that is still the case, but that the relationship between Russia and the European Union is multi-dimensional and that, for the present, while some dimensions allow for co-operation, others do not. We call in the report for, "““a hard-headed and unsentimental approach by the European Union””—" which— "““can help to ensure that the relationship is productive rather than the opposite””." Events in Georgia have certainly made this no easier, and much will depend on the results of the discussions beginning in Geneva next week. I hope therefore that the negotiations on the new agreement will resume as soon as possible. I beg to move. Moved, That this House takes note of the report of the European Union Committee on The European Union and Russia (14th Report, HL Paper 98).—(Lord Roper.)