---

EU and Russia (EUC Report)

My Lords, the House is grateful to the noble Lord, Lord Roper, and his committee for its hard work in preparing this excellent report on the EU and Russia, and I apologise to the noble Lord for missing the first half minute of his speech. We have enjoyed some very well informed contributions. The noble Lord, Lord Truscott, spoke with great authority on energy issues and Russia, as one would expect given that his wife is Russian. The noble Lord, Lord Skidelsky, and the noble and learned Lord, Lord Morris, both believe strongly that Georgia and Ukraine should not join NATO. However, I agree with my noble friend Lord Hamilton that not now doing this would send the wrong message to Russia. There is a strong argument for offering them a pathway to joining NATO, despite Russian insistence that this would transgress a very thick red line. Moreover, I certainly agree with the noble Lord, Lord Wallace of Saltaire, on the issue of possible Russian EU membership. When this report was written, EU-Russian relations, although already displaying signs of tension, were of a different temperature than they are today. As my noble friend Lord Sheikh said, events have moved very quickly. I believe that the disproportionate Russian response to Georgia must dramatically alter the EU’s view of its neighbour. Even in May, the committee observed that: "““The European Union is not facing a new Cold War, but EU-Russia relations are perhaps in a negative phase in a long process of transition which could last for some time””." This assessment has undoubtedly been corroborated by recent events, and indeed relations have deteriorated further. Although Prime Minister Putin has said that there is, "““no basis for a Cold War””," much of Russia’s recent conduct undermines confidence in that statement. Russia’s genuinely felt resentment and anger over the Western response to the Georgian crisis stands to continue to dog relations despite the recent cooling of the rhetoric, and as several noble Lords have mentioned, NATO expansion remains a potential flashpoint. Russia’s actions in Georgia have been rightly condemned as disproportionate. The scale of Russian militarisation on the Georgian border always belied Russia’s claim that it was only reacting to a Georgian attack, and mobile phone intercept evidence presented by Georgia now supports the assertion that, despite Georgia’s misjudgments, Russia was the aggressor. Russia believes that it has the right to assert itself in its ““near abroad””. Indeed, the EU has acknowledged the sensitivity of the area in the European Neighbourhood Policy. However, as the report makes clear, this should never, "““give them a right of veto over EU policy””." We should go further, as has my right honourable friend William Hague, and say to Georgia: "““That your right to live in peace and freedom was long-awaited and hard-won, that your democracy has every right ultimately to join the alliances of the world democracies, and that the bullying of you or your neighbours must never be allowed to pay””." Violating a neighbour’s territorial integrity must not translate into increased influence. Although they have now withdrawn, Russian forces stayed in Georgia for far too long. They dug in around strategic interests such as the port of Poti, hundreds of miles from the south Ossetians they claim they were there to protect. The return of Russian forces to pre-war lines, as outlined in the original agreement, has seemingly been forgotten with the announcement that Russia would keep 7,500 troops in South Ossetia and Abkhazia. Will the Minister confirm that negotiations on a new EU-Russian partnership agreement will not take place under such conditions? Can the Minister also tell the House whether the 19 observers that Britain has contributed to the EU observer mission have seen any evidence of offences against the civilian population and whether Georgian refugees are being allowed to return to their homes in the region? We must not allow what would be, in all but name, ethnic cleansing. The recognition of South Ossetian and Abkhazian independence is also unhelpful. There can be no comparison with Kosovo. It has taken eight years to strike the balance between the Kosovo Albanians’ insistence that nothing short of independence would be acceptable, and Serbia’s insistence that it would not yield sovereignty. The Ahtisaari plan is a product of the, "““political process … to determine Kosovo’s future status””," that UN Resolution 1244 called for—a process, if not the result, that Russia supported. The EU must, above all, use the strength of united resolve to defend its interests and oppose aggression. The EU certainly needs good relations with Russia. Last year the combined trade in goods between the EU and Russia was €232 billion, while the EU was by far the biggest investor in Russia, with €17 billion. The creation of a cyber-terrorism research centre in response to the attack on Estonia is one example where co-operation can help. Support for Ukraine from outside interference regarding its upcoming elections would also be welcome. Russia will need major investment in the upstream and midstream gas and oil sector in the next two decades. In that context, the recent difficulties that TNK-BP’s joint venture underwent were not helpful to build investor confidence. But it is clear that Russia’s leaders remain in denial, at least publicly, of any connection between their own actions, whether over energy issues or, especially, Georgia, and the loss of investor confidence. So I ask the Minister whether, in Her Majesty’s Government’s discussions with their Russian counterparts, it has been made clear that such belligerence damages business confidence and makes investment less forthcoming? Last year the EU imported almost €100 billion in oil and gas from Russia. As the committee warned in May, all countries are vulnerable, such is the magnitude of gas imported from just the one country. Russia could, "““use its energy exports as a political weapon to impose its will on neighbours and partners””," much as it did to Ukraine in 2006. Do the Government accept the Conservative’s long-held view that there is an urgent need for a review of our energy security? The noble Lord, Lord Anderson, to whom I always listen closely when he speaks on international matters, was critical of EU countries which make their own energy agreements with Russia. My noble friend Lord Hamilton disagreed. There is an argument that we must be careful not to look at Russia only through the EU prism, thereby ignoring all the possibilities for protecting and furthering this country’s interests on a bilateral basis or in concert with other partners away from the collective EU system. It is clear that, on the energy front, our concerns are different from anything that might emerge from a common EU energy policy, which the report anyway concedes is virtually unachievable. Although, as my noble friend Lord Crickhowell said, our energy position is exposed, we—unlike continental Europe—have the opportunity via Norway and our own North Sea, plus LNG imports, to depend less on Gazprom and the Russians generally. But I support the committee’s recommendations mentioned by my noble friend that EU member states should take active and coherent measures to diversify both sources of supply and transportation routes. On the subject of trade, Russia dropped to 143rd out of 180 countries in Transparency International’s corruption perception index. What work is being done to minimise corruption in Russian business practices and its impact on British companies operating there? We also need strong relations with Russia to deal with important foreign policy challenges. The Russian veto of the UN Security Council resolution on Zimbabwe was deeply disappointing We cannot afford similar divisions to debilitate negotiations with Iran on nuclear proliferation. What conversations have Her Majesty’s Government had with their Russian counterparts on this pressing issue? Russia has nothing to fear from the EU or NATO and much to gain. We have an obligation to convince Russia that the US missile defence system to be based in Poland and the Czech Republic is not a threat, but rather to mitigate a threat from the Middle East. The Russian president’s response that Russia would upgrade all its weapons platforms including its nuclear deterrent by 2020 is unwelcome and suggests that we have not yet succeeded. Despite our differences, we have held out the hand of friendship to Russia. We want to continue to do so, for we genuinely believe it to be to the benefit of all. But our relationship must be based on mutual respect, and I support the committee’s view that this should be combined with a hard-headed and unsentimental approach by the EU as well as by our own Government.