Handle with care. A brief meeting of three will not change it in the slightest: recent developments confirm that precautions are required. I'm talking about relations with Russia. All opportunities for strengthening reciprocal links must, of course, be seized, as deeper relations with Russia are politically indispensable for the EU, as well as being economically useful and logical from a cultural point of view. However, certain precautions should be applied, notably for energy, industrial and trade policies. Application of free market rules and a liberal regime, as well as the hypothesis for a free trade zone and even conditions for Russia's accession to the WTO (World Trade Organisation) should be handled with care, taking into account that the Russian authorities continue (and will continue) to keep control of their main enterprises' strategy, as well as that for trade (see this section in EUROPE 9264 and 9265). Two aspects need to be highlighted:
1. Russian government control of gas is being strengthened. Moscow has repeated warnings to Royal Dutch Shell over the exploitation permit for the Sakhalin-2 gas and oil exploitation project in the far east of Russia (EUROPE 9269). This is the biggest private investment ever made in the world and the only project on Russian territory entirely managed by a consortium that does not include Russian companies: Shell holds 55% of the capital and the Japanese companies Mitsui and Mitsubishi 45%. As well as gas extraction (which has already begun), the main installations will include gas liquefaction expected to be up and running in the second half of 2008. Russia has said that this permit could cancelled for economic reasons. Commissioner Andris Piebalgs did not contest “the legitimate right and even obligation” of Russia to ensure respect for the highest environmental standards but at the same time indicated that investment in the energy sector required clarity and legal security”. “The fruitful EU/Russia partnership is based on mutual respect for transparency, predictability and non-discrimination” and if in a specific case, ecological problems exist, Shell “must be given an appropriate time-schedule, according to clear and defined criteria in advance”. The Commissioner for Energy, confirmed at the same time that, if transparency and reciprocity are respected, Russian companies would be able to obtain the means for selling their gas directly to European consumers (Gazprom is very interested and its recent agreement with ENI includes this possibility in Italy).
There is no use adding that the different parties concerned are afraid that Moscow's ecological doubts are in fact a way of creating pressure to get the 1990s agreements re-negotiated, which Vladimir Putin now considers a being too open and favourable to foreign investors. Japan's reaction has been sharper than that of the European's: Tokyo pointed out that the Sakhalin-2 project represented “a symbol of Russo-Japanese cooperation” and that a prolonged delay would have a negative impact on Japanese-Russian relations as a whole. The Americans have also expressed their concerns as Exxon has a contract that is almost the same as Shell's in the same region.
2. Participation in the control of the European airspace industry? The second development that needs highlighting is the announcement by a Russian government-controlled bank that it intended to take a bigger share in the capital of EADS, the European consortium that produces Airbus, missiles and launchers. The first reaction by the EU, to my knowledge, was that by MEP Alain Lamassoure, who declared, “although cross holdings are welcome but that if we can expect more industrial cooperation with Russia, it has to be clear that the company is a symbol and leading light in the civil and military airspace industry and needs to remain under the total control of actors belonging to the EU” (EUROPE 9268). He added, “We put our trust in the political authorities of the European countries involved, to strongly express this message to their Russian interlocutors”. During the weekend, Mr Putin strove to provide reassurances to Chancellor Merkel and president Chirac on this subject but this little game of provocations followed by reassurances should not fool anyone.
Without going into all the details, the two affairs mentioned above should therefore strengthen the conviction that with Mr Putin's Russia (which has both clear ideas and tactical skills), the EU must adopt, to use the two adjectives I've already used, an attitude that is “positive but not ingenuous”. (FR)