Ahead of the third Eastern Partnership Summit in Vilnius, to be attended by the European Union and five of its neighbours, Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine, EUROPE is publishing a special report outlining what is at stake at the summit, which Lithuania is banking on to be the crowning glory of its six-month presidency of the Council of the EU. Under heavy pressure from Russia, Ukraine's sudden decision to withdraw from signing an Association Agreement and free-trade zone with the EU has shrunk the range of positive outcomes expected from the Vilnius Summit and discredited the EU's ability to use 'soft power' to expand its area of influence and convince its immediate neighbours of the political and economic utility of closer ties with the EU's principles and rules. (Special report by Camille-Cerise Gessant).
It was meant to be the high point of the Lithuanian Presidency of the Council of the EU, but the third Eastern Partnership Summit (the EU plus Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine) in Vilnius on 28 and 29 November was on a bad footing before it even began.
Although Moldova and Georgia are due to initial Association Agreements with the EU that include a comprehensive and detailed free-trade zone, Armenia decided in September to join the customs union promoted by Russia and will therefore not be initialling an Association Agreement with the EU. Splashed across the media on 22 November, as Europe was still hesitating over whether to sign an Association Agreement with Ukraine before it meets all the criteria, Ukraine decided to break off the preparations and suspend signature of the agreement until further notice. The EU is playing down the matter and a French source says it has always felt that it was important to avoid making a drama out of the Vilnius Summit because politics plays out over long periods of time and there's another summit after Vilnius.
TANGIBLE RESULTS
The summit will provide an opportunity to make progress in other areas, and not just for Moldova and Georgia. The presidents of the European Council and European Commission, Herman Van Rompuy and José Manuel Barroso, say the summit will be an important time for drawing up a balance sheet and advancing relations with the EU's eastern partners.
A visa facilitation agreement will be signed with Azerbaijan and the participants will welcome the implementation of readmission and visa facilitation agreements. The visa granting process for various categories of Azerbaijan passport-holders, young people and businessmen, for example, will be speeded up and the price of a visa reduced from €65 to €35. Moldova is the country where the most progress has been made on visas. On 27 November, the Commission adopted a recommendation that the country be added to the list of countries for which visas are not required for short stays in the EU. There are visa liberalisation action plans in place for Georgia and Ukraine, and Ukraine is almost ready to sign the first phase on the change of rules and regulations, but still needs to introduce more detailed anti-corruption and anti-discrimination legislation. A visa facilitation scheme is already in place for Armenia. Only Belarus is lagging behind, because the government is refusing to budge.
An agreement on Georgia's participation in crisis-management missions will be signed at the summit, and an aviation agreement with Ukraine may be initialled. The heads of state are expected to welcome the adoption of an Eastern Partnership regional transport network that includes connections with the trans-European transport networks, and a list of priority projects approved at a meeting of ministers in Luxembourg in October 2013. A joint statement on EU-Armenian relations may be published and progress may be forthcoming with Belarus on dialogue on modernisation, in which opposition and civil society groups are involved. An intermediate stage may take place, during which talks will be held with high-ranking officials, who might also be included in the dialogue. Belarus is increasingly active in the summit's multilateral dimension.
The summit will provide an opportunity for the Ukrainian president, Viktor Yanukovych, to give his view of the situation and explain why he has decided to suspend the Association Agreement. A European source says the EU will examine how to provide Ukraine with further information and will be interested to learn under what conditions the country will sign an Association Agreement.
The summit will give a chance to decide on new strategic guidelines for implementation of the Eastern Partnership policy and the objectives for the Partnership between now and 2015. The next summit will be held in Riga under the Latvian Presidency. The EU Council of Ministers says that key topics for the partnership over the next few years are implementation of the Association Agreements; boosting democracy and the rule of law by pursuing or reforming the legal system, new economic integration measures and moving towards removal of the visa requirement for travel; energy policy; boosting the multilateral aspect of the partnership; and improving the participation of civil society in general and the business community in particular. The Eastern Partnership should focus more on differentiation in the future due to the differing rates of progress in the partner countries. A joint statement will be published at the Vilnius Summit, the draft of which is currently 17 pages long.
The summit will be attended by EU heads of state, the president of the European Commission, José Manuel Barroso, the president of the European Council, Herman Van Rompuy, the president of the European Parliament, Martin Schulz, EU High Representative Catherine Ashton, EU Enlargement and Neighbourhood Policy Commissioner Stefan Füle and Trade Commissioner Karel De Gucht. The partner countries will be sending the Ukrainian president, Viktor Yanokovych, the Georgian president, Georgi Margbelashvili, the Azerbaijan president, Ilham Aliyev, the Armenian president, Serzh Sargsyan, the Moldovan prime minister, Iurie Leanca, and the Belarusian foreign minister, Vladimir Makey. The summit will start over dinner on Thursday 28 November and continue with a full sitting on Friday morning.
BUILDING RELATIONSHIPS, BUT NO PROSPECTS OF JOINING THE EU
The EU is keen to point out that the Eastern Partnership is not just for negotiating Association Agreements and visa liberalisation schemes, but is most importantly also about boosting political association and economic integration with the EU, which the Lithuanian Presidency lists as the key priority. Close ties between the EU and its eastern neighbours does not, however, mean that these countries have been given any kind of promise of joining the European Union in the future. Article 49 of the EU treaty - which refers to membership of the EU - has never been mentioned in Eastern Partnership statements. EU member states are divided over the issue. Eighteen countries are said to favour Eastern Partnership countries joining the EU, but ten are against the idea. One minister has already made it clear that his country will not sign up if the possibility of joining the EU were not mentioned, adding that this was a “red line”. Whether or not a country would be able to apply to become a member of the EU is largely dependent on their ability to introduce reforms, rather than an article in the EU treaty as such.
The Eastern Partnership therefore aims to promote political and economic reforms and help partner countries form closer ties with the EU. The EU says it is based on the values of democracy, the rule of law, respect for human rights and fundamental freedoms, the market economy, sustainable development and good governance.
The Eastern Partnership emphasises the reinforcement of sector-specific cooperation (energy, transport, freedom, security and justice, regional development, farming, rural development, the environment and tackling climate change) and making it easier for the partner countries to join EU agencies and programmes. Sector-specific cooperation was boosted by the first Eastern Partnership ministerial meetings in October 2013 on justice, home affairs and transport.
The partnership includes a multilateral dimension to build on bilateral guidelines and facilitate the drawing up of common positions and joint action. A good governance and democracy platform has been set up, along with a group of experts on reform of the civil service and a similar expert group on migration and asylum. The multilateral dimension also covers economic integration and convergence with EU policies, trade, the environment, tackling climate change, business, transport, energy and inter-personal contact.
The EU earmarked nearly €2.5 billion for 2010-2013 to back reforms in the partner countries and encourage economic and democratic development. The European Investment Bank (EIB) increased its lending activity in the region from €631 million in 2010 to around €1.8 billion in 2013. Along with the economic integration negotiations proper, there is an institution-building programme with a budget of €167 million to boost major Eastern Partnership institutions in fields related to the Association Agreement and the free-trade zone, along with dialogue on mobility. Some €62 million has been set aside for regional development programmes piloted by the partner countries, which follow the design and aims of the EU's Cohesion Policy and will be used to solve economic and social imbalances by developing local infrastructure, human resources and small and medium-sized enterprises.
The Eastern Partnership is more than a club for politicians. Alongside the political summit, a civil society forum will be held in Vilnius from 27 to 29 November. The forum was set up in 2009 to make it easier for civil society organisations to get involved in the Eastern Partnership. In November 2011, a strategy was introduced to focus civil society's contribution to the work of the Eastern Partnership and an Eastern Partnership Enterprise Forum was created in September 2011, which will meet on 28 November. In May 2011, the “Euronest” parliamentary assembly was set up, comprising MEPs, parliamentarians from partner countries and the Conference of Regional and Local Authorities for the Eastern Partnership (CORLEAP), which met most recently on 3 September. A Youth Summit took place in Kaunas from 22 to 25 October.
ASSOCIATION AGREEMENTS INITIALLED WITH MOLDOVA AND GEORGIA
Moldova and Georgia are moving closer to the EU. The Eastern Partnership Summit in Vilnius will provide the opportunity to initial EU Association Agreements and a comprehensive, in-depth free-trade zone with the two countries. A European source explains that the partnership offers a menu of possibilities and the Association Agreement is as far as the EU can go. The initialling will freeze the agreements at the current stage. They include a political agreement with the two countries to encourage modernisation, back institutional reforms and boost political dialogue. There is also an economic dimension with the free-trade zone. A French source says that the two countries will demonstrate with their initialling of the agreements, which are the first stage in the process of signing a contract with the EU, that they want to move forward in their relations with the EU. It is a political signal by the EU of its commitment to work with the two countries and provides the countries themselves with the opportunity to demonstrate that they are moving closer to the EU and that this can become tangible.
The negotiations with Moldova began in January 2010 and lasted until June 2013. The negotiations with Georgia began in July 2010 and ended in July 2013. In the conclusions document of the General Affairs Council on 25 October 2013, the EU member states said that they aimed to sign Association Agreements with the two countries in October 2014 at the latest, before the new European Commission comes in. A European source said that the translation process between initialling and signing takes between nine and twelve months. Then there's the ratification process. The agreement will come into force provisionally ahead of ratification because the latter has to be done by all member states' parliaments and can be a lengthy process. The agreements would come into force provisionally at the end of 2014 or the start of 2015 in areas where the EU has powers, like the free-trade agreement, justice and home affairs.
RENEWED COMMITMENT
On 23 November, the day after Ukraine dropped its bombshell, the new president of Georgia, Giorgi Margvelashvili, confirmed that his country would be initialling the Association Agreement with the EU on 29 November. In an interview with this newsletter in September (see EUROPE 10926), Georgian Justice Minister Tea Tsulukiani said that the Georgian government wanted to initial the agreement because it was a strategic choice for the country and was backed by the whole nation. She explained that Georgia, where tension has been rising with Russia, would not be joining Russia's customs union for the simple reason that having made the strategic choice of Europe, this makes it impossible to consider joining or initialling the Euro-Asian process and whatever pressure might come from the outside, nothing would make Georgia deviate from the path that leads to Europe.
On 23 November, Moldovan Prime Minister Iurie Leanca announced that his country would continue to be associated with the EU. Five days earlier, Leanca said in an interview with a Ukrainian news outlet that European integration was Moldova's irreversible and solid policy and was above all, a programme for modernisation at home. He said that association with the EU was in Moldova's interests and the Association Agreement did not prevent the country from cooperating with the Community of Independent States. He said Moldova was committed to deepening trade and economic ties with the CIS, based on the rules of the free-trade agreement and the World Trade Organisation.
FIRST BLOW: ARMENIA PULLS BACK AND RETURNS TO RUSSIA'S FOLD
Early in September, the EU and the Eastern Partnership suffered their first setback. On 3 September, the president of Armenia, Serzh Sarkisian, would be rejoining customs union with Russia, Belarus and Kazakhstan. He justified the decision by explaining that it was a rational decision that was in Armenia's national interests. He said Armenia would be happy to sign an Association Agreement with the EU, which mainly involves political reforms, but not the free-trade zone side of it, which is not possible due to membership of customs union with Russia.
EU Enlargement Commissioner Stefan Füle said that the compatibility of customs union obligations and those of the Association Agreement and its comprehensive and in-depth free-trade zone with the EU looks problematic. He announced on 5 September that it was “hard to imagine” initialling of the Association Agreement that has been negotiated at the Eastern Partnership Summit in Vilnius at the end of the month and the Commission points out that the Association Agreement and the free-trade zone are part of an inseparable package. Peter Stano, a spokesman for the commissioner, said that the Association Agreement was a single legal document that includes a comprehensive, in-depth free-trade zone and the two could not be separated and were not compatible with membership of customs union with Russia.
Lithuanian Foreign Minister Linas Linkevicius said the presidency respected the choices made by each country, but it wasn't possible to be a member of both organisations at the same time because of differing tariff rules.
EU High Representative Catherine Ashton said that the EU remained determined to extend relations with Armenia in all domains that are compatible with the Yerevan announcement. The European Commission is considering other ways of boosting its relations with Armenia, such as a special, legally binding document.
Armenia says it is determined to boost its relations with the EU and wants to continue its reform process and develop a broad, profound partnership with the EU. A joint statement might be issued by the EU and Armenia at the summit on cooperation and talks on a new legal basis for relations between the two. They are also expected to exchange agreements signed for the past three and a half years.
UKRAINE SHOCKS EVERYONE BY SUSPENDING AGREEMENT WITH THE EU
As all eyes were on EU member states, wondering whether they would sign the Association Agreement with Ukraine at the summit this week, Kiev sent out shockwaves by announcing on 22 November that it was suspending preparations for signing of the Association Agreement, to the bewilderment of the European Union. The decision by the Ukrainian prime minister, Mykola Azarov, states that the process of preparing the Association Agreement between Ukraine and the EU must be suspended for national security reasons, to renew economic relations with Russia and prepare Ukraine's market for trade relations on an equal basis with the EU. The Ukrainian government suggests that Russia, the EU and Ukraine set up a tripartite committee to deal with the “complex” issues of trade and business relations.
Representatives of the EU institutions, including Commissioner Füle (who has been pulling out the stops to get the deal signed), along with EU foreign ministers immediately expressed disappointment. Although, as an EU source points out, suspending an agreement is not the same as abandoning it. Commissioner Füle says the EU will be ready to resume preparations for the signing of the Association Agreement as soon as Ukraine is ready to return to its path of political association and economic integration with the EU. He says the door to signing the Association Agreement will remain open in the future, once the necessary conditions have been met. Barroso and Van Rompuy say that the offer of an unprecedented Association Agreement and free-trade zone is still on the table, but this will require political will from the Ukrainian leaders, along with resolute action and tangible progress on the conditions laid down in December 2012.
There will of course be consequences attendant on suspending signing of the deal. Pat Cox and Aleksander Kwasniewski, instructed by the European Parliament to monitor progress in this domain, say that the Ukrainian authorities' decision to put the association process on the back burner carried with it the clear risk of slowing the process down. It may last for a long time and if and when the process is resumed, the suspension decision will have made it more complicated. Polish foreign minister Radoslav Sikorski said the decision ran the risk of freezing the process of moving closer to the EU for an indefinite period and led to irreversible losses when it comes to modernisation, reform and democratisation in Ukraine. There is also the danger of losing what has been achieved in the long, painstaking preparations for signature of the Association Agreement. Commissioner Füle warned that Ukraine's decision to suspend the preparations for signing of the Association Agreement comes at a cost - many opportunities for the country and its citizens have been put back.
When the suspension was announced, the EU immediately slammed pressure from Russia (see below). Commissioner Füle pointed out that the free-trade zone did not require a choice to be made between the European and the Russian markets and nobody was asking Ukraine to give up its traditional free-trade deal with Russia. The Commission says the difficult economic situation in Ukraine, along with Russian trade pressure and the dangers of gas price hikes, negative propaganda and exaggerations about the cost of the Association Agreement for Ukraine had influenced the decision. Kiev told the EU in August about pressure from Russia, but there had been little information since then until it suddenly made a move at the last minute and suspended preparations for the Association Agreement.
The Association Agreement negotiations began in March 2007 and the free-trade zone negotiations in February 2008. Ukraine initialled the Association Agreement with the EU on 30 March 2012. In December 2012, an EU Foreign Affairs Council set three preconditions for signing the agreement - holding of the general elections, introducing the reforms set out in the association agenda, and ensuring justice for former Ukrainian Prime Minister Yulia Timoshenko. The European Parliament has given former EP Presidents Pat Cox (Ireland) and Alexander Kwasniewski (Poland) the job of negotiating the release of Mrs Timoshenko with the Ukrainian authorities on health grounds. EU foreign ministers were expected to comment on this at the Foreign Affairs Councils of 21 October and 18 November, but eventually decided to wait and see whether Ukraine introduced three important laws ahead of the Eastern Partnership Summit, namely an electoral law, setting up a public prosecutor's office and a law to allow Mrs Timoshenko to leave the country for healthcare abroad. The Timoshenko law has not yet been brought in.
PRESSURE FROM RUSSIA
Pressure from Russia on Armenia and Ukraine has influenced their decisions to withdraw from relations with the EU. Barroso and Van Rompuy have “strongly condemned” Russia's approach, pointing out that closer relations with the EU do not damage relations with other trading partners. They explained on 25 November that the Association Agreement and the free-trade zone provide opportunities for helping the EU's neighbours become more modern and prosperous democracies based on the rule of law, and the European Union would not force Ukraine or any other partner to choose between the EU and any other regional body. It is for Ukraine to decide for itself on the type of commitment it is seeking with the EU. A European source points out that due to the partner countries' geographical location, it is important that they are on good terms with both the EU and Russia, but it was not a binary choice.
In the wake of Ukraine's decision, the EU criticised pressure from Russia. Enlargement Commissioner Stefan Füle said that it was difficult to ignore recent unjustified business and trade measures taken by Russian against Ukraine and how this has impacted on Kiev's reasoning and decision-making. He said it was clear that the Ukrainian decision was in response to a series of measures taken by the Russian federation that slashed bilateral trade and inflicted great economic damage on many Ukrainians. The measures are unfounded because he said Russia would also benefit form the new possibilities arising from the Association Agreement. The Cox-Kwasniewski mission has taken note of comments made by the Ukrainian prime minister about the difficult situation facing the country's economy and pressure from Russia that has hugely increased over the past few weeks. Swedish Foreign Minister Carl Bildt spoke more directly, tweeting that the Ukrainian government was bowing very low to the Kremlin and the Russian strong-arm policy clearly worked.
Russian pressure has been mounting up against Eastern Partnership countries since the summer. Russia has threatened Ukraine, Moldova and Georgia with reprisals if they sign or initial Association Agreements with the EU. Russia has also been trying to get them to join its own customs union.
On 20 August, the European Commission said that the economic pressure on Ukraine by Russia was unacceptable as an attempt to prevent the country from signing any Association Agreement with a free-trade zone with the EU. On several occasions since then, it has pointed out that the Association Agreements do not prevent constructive ties from being developed with Russia's customs union (Russia, Kazakhstan and Belarus) and the Euro-Asian Economic Area, Commissioner Füle said on 11 September that as long as these relations are based on respect for the rules and principles of the WTO and do not jeopardise the future of the free-trade zone, then the EU would continue to do everything it can to work with its neighbours to find a way of maximising the compatibility of EU and Euro-Asian structures in a way that can facilitate trade and economic integration.
Like Moldova, Georgia has also been coming under pressure from Russia. The European Commission has reacted by offering early and total opening of the EU market to wine imports from Moldova. Russia has introduced an embargo on Moldovan wine imports. Commissioner Füle has explained on several occasions that the European Union will support and remain at the side of those coming under undue pressure.