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EU and Russia (EUC Report)

My Lords, I, too, congratulate the noble Lord, Lord Roper, and the European Union Committee on producing this detailed and thoughtful report, which makes an important contribution to our understanding of EU-Russia relations. My officials wanted me to congratulate the noble Lord, Lord Roper, on both the publication of this report—rather perversely in that case—and the scheduling of the debate. While we can certainly agree that the debate is well timed, it is a little harder to conclude that the report’s timing was perfect given what has happened since its publication. Having heard earlier from the noble Lord, Lord Hamilton, that this was the second time that this had happened to the committee, we can only fear what its next subject might be and devoutly hope that it is not the global economy. Whatever the inevitable redundancy of some of the report given what has happened since, the basic analysis holds up extraordinarily well and the events of the summer do not shake its fundamental conclusions. Before we return to the circumstances of Georgia, it is worth reminding ourselves that the common challenges that the EU and Russia face—tackling climate change, the long-term security of our energy supplies and the broader issues, which have not been much mentioned today, of promoting peace in the Middle East and combating the threat of a nuclear Iran—are key issues on which we must be able to maintain a constructive and deep dialogue. That of course means that we have to have a Russian partner that is willing to play a responsible international role and to keep to the international commitments that it makes. Whatever other lessons we can learn from recent events, we need to continue to remind the Russian Government that international engagement comes with certain responsibilities and with rules of behaviour. My noble friend Lord Truscott said that the economic costs of the conflict had no doubt been very much underestimated by the Russians, who I am sure had not foreseen the impact on stock prices. He suggested that this was their Suez, a point to which the noble Lord, Lord Wallace, returned. Well, perhaps—it was certainly their sub-prime. Suez has an association that we should perhaps question because our near east is very different from their near neighbourhood. It is worth observing that, for the Russians, real issues of their security and confidence in the motives of the West have been raised by NATO enlargement. Whatever the agreement that we will all find in needing to deal firmly with the Russians and remind them of Europe’s collective red lines, we also need to recognise, as many noble Lords have said today, just how provocative recent events have appeared in Russian eyes, beginning with the promise of enlargement and continuing through the events of August. In that regard, a proper part of any long-term response is to find ways to reassure Russia that we want a peaceful, constructive relationship and that, just as we expect Russia to live by the rules of a civilised international order, we remain equally devoted to that ourselves. In dealing with Georgia, while I hear noble Lords who say that we must look at UK national interests as well, even if those might in some ways diverge from those of Europe as a whole—allowing that as a debating point for a moment—I do not think that it detracts from the fact that our power to influence Russia comes from our ability to forge a common European position. It is the voice of Europe that will stall Russia in its actions, not the voice, I believe, of the UK alone. Our effort to make sure that there is a common European position is enormously important to our handling of this crisis since it began. Russia’s response to what happened in South Ossetia and Abkhazia was clearly utterly disproportionate. Whatever the rights and wrong of how this began, Russia breached all the expectations and rules of the international community in the scale of their response and their slowness and reluctance to withdraw troops since. Even if, as many noble Lords have said, the Georgian actions were ill considered and provocative, that does not excuse the Russian response. It is in that context that we have sought to work with the French presidency as well as our fellow members to forge a clear strategy. It began with the extraordinary European Council meeting on 1 September, which sent a clear message of support for Georgia and underlined the importance of Russia living up to all her international commitments and obligations, including honouring the commitments that it had made under the peace plan brokered by President Sarkozy. I join others in saying how fortunate we were that France has the presidency at this time, because there was an astonishingly swift and united response to the crisis. As I have observed, when EU member states speak with one voice, they achieve much more than is possible when they speak alone. It also highlights our ability to use a whole range of tools to ensure stability and security internationally. We have now established effective mechanisms that will provide independent monitoring of the situation on the ground. The EU civilian monitoring mission is there. Already more than 200 monitors have been patrolling the zones adjacent to South Ossetia and Abkhazia since 1 October. As to the ultimate issue of complete access under the agreement with President Sarkozy, we need to hear the reports next week to the GAERC and the European Council before confirming that we believe that complete access has been secured. However, we can already say that not just the EU but the OSCE and the UN appear to be receiving the access broadly that they need to carry out their mandate. The noble Lord, Lord Crickhowell, asked about President Medvedev’s statement two days ago in which he called for a new security approach embracing both sides in an agreement around security principles of mutual non-interference and guarantees of the independence of the countries of the wider Europe and Russian region. Similarly, we have heard other initiatives, such as the Swedish-Polish initiative. The response to all these is to say that we are seeking more information on both those initiatives. There will be extensive discussions of them in the coming weeks, but we should remain open to them regarding suggestions on NATO and weigh everything against our goal, which is to secure a set of borders that allows countries to enjoy full independence within them and reduces any prospect of action by neighbours against each other of the military kind that we saw in August. It is a little early to conclude the best way of bringing Russia back into such an arrangement, but we need to be open-minded to suggestions from all quarters. We remain committed to the EU-led Geneva talks, which are, as was mentioned, due to start next week, on 15 October. It is extraordinarily important that Russia demonstrates real commitment to this process and to the unresolved questions, because, for all the progress that we have made on observers, there has not been progress on refugees and internally displaced persons, or on property rights of those who have been displaced by the conflict. There remain outstanding humanitarian issues and profound questions of human rights and their breach. Beyond providing that lasting security and stability, we need to redress the events of the past weeks and months and their real cost to individuals. We all know that, when people are displaced and their rights to their previous homes are left unresolved, that can be a source of tension and conflict that can run through generations and decades. We have seen it in too many other places, from Cyprus to the Middle East, to want to leave these issues unsolved, somehow setting firmly in concrete as time elapses. We need to solve them now. On 1 September, the council unanimously decided to suspend negotiations on a successor to the EU-Russia partnership and co-operation agreement. That assurance, which the noble Lord, Lord Astor, sought, remains in place. While, as the report argues, a successor agreement is enormously important, negotiations on it will resume only when the issues of August have been satisfactorily resolved. It was also agreed that we would conduct a comprehensive review of EU-Russia relations and intensify efforts to ensure the EU’s long-term energy strategy. We remain committed to the PCA negotiations, but in good time, when the circumstances are right. The agreement to an audit of EU-Russia relations, which has already begun and will run up to the next EU-Russia summit in Nice in mid-November, will allow us to take a considered decision about the future of relations between Europe and Russia. The committee can in one regard take some comfort from the events of the summer: if it had felt that there had been some complacency in the Government’s views on the energy question, nothing has concentrated minds more than the events of August. We certainly believe that a long-term energy strategy will require support for infrastructure that diversifies energy resources, renewables and energy efficiency, as well as measures to improve the internal market. The Prime Minister has made it clear that we would support Europe giving increased support for the development of the Nabucco pipeline as a critical part of such a strategy. I make a broader point, which I know is slightly disputed in this House, about who depends on whom in terms of energy security. While the European Union is of course highly dependent, particularly in a cold winter, on Russian energy, the EU remains by far the largest market for Russian energy. Gas exports to the EU provide a significant proportion of Russia’s annual GDP. Russia needs the EU and, in particular, UK investment and technology to develop its natural resources. Without investment in new infrastructure that will link Russia to new markets, not only will we continue to be the natural trading partner as a region for Russian energy, but also Russia will remain as dependent on us as we are on it. I apologise for not being able to respond to every issue raised today; I will return to some of them where appropriate in letters to noble Lords who raised them. Let me conclude. What ultimately is our best defence against a Russia that is in some ways resurgent and in some ways seems unwilling to accept all the rules of international behaviour and law? NATO remains a vital prop. However, as many noble Lords have observed, an equally important part of our strategy is the expansion of not just markets but the values that underpin those markets. The security of Georgia and Ukraine rests much more on drawing them into a strengthened and deeper democracy and drawing their economies into links with Europe, as they start to share the benefits of us as customers and trading partners. Russia’s long-term stability and value to us as a partner rests on its coming to terms with the need for the rule of law in its commercial dealings and its internal human rights arrangements, as well as how it deals with its neighbours. What is often called the ““soft-power strategy”” of expanding economic, cultural and political ties, not only with Russia’s neighbours but with Russia itself, must not be disrupted or thrown off course by recent events. As many noble Lords have said, we must deal with Russia through engagement and by drawing it into the orbit of markets, values and mutual interests, because that is the long-term path to peace. Russia has seen the cost of defying that in what has happened to its markets. This may not seem the best week ever to make the case for how the expansion of markets can bring prosperity and peace, but we should not be shaken in understanding that the same circumstances that brought the end of the Cold War, the fall of the Berlin Wall and the expansion of those values of democracy and free markets remain our best weapon in dealing with Russia.