EU meets with Russia at Rostov-on-Don

RIGA - Russian President Dmitry Medvedev was set on May 31 to host his first summit with the European Union’s new leadership as the 27-nation bloc seeks to develop a unified foreign policy, reports Bloomberg. Representing the European Union, for the first time, was EU President Herman Van Rompuy and foreign policy chief Catherine Ashton. European Commission President Jose Manuel Barroso also attended the two-day summit, held in the southern Russian city of Rostov-on-Don.
Russia

has failed to reach a framework agreement with the EU for more than two years as relations were strained over trade disputes, political squabbles and the five-day Georgian war in 2008. Prime Minister Vladimir Putin, who was president between 2000 and 2008, preferred developing ties directly with the EU’s largest economies, including Germany, France and Italy.

“A stable configuration of the EU delegation gives us hope that the decisions taken at the summit will be carried out more consistently,” said Russian Deputy Foreign Minister Alexander Grushko.
The main topics under discussion were visa-free travel between the EU and Russia, as well as the framework agreement, said Denis Daniilidis, spokesman for the EU delegation in an interview. “We can’t have a leap forward because Russia hasn’t decided what to do with accession to the World Trade Organization,” said Daniilidis. “A big part of the framework agreement would be the trade regime.”

Russia has sent contradictory signals about whether it wants to join the WTO alone or as part of a customs union with Kazakhstan and Belarus. Other outstanding issues are Siberian over-flight rights, timber duties and food safety standards, Daniilidis said.
“The ball is on the other side of the court,” Grushko said, as Russia has completed “99 percent” of its preparations for joining the WTO. While there are no strict deadlines on reaching the EU framework agreement, Russia doesn’t want talks to drag on, he said.

Trade volume last year between Russia and the EU reached 194 billion euros, down 38 percent from 2008, according to the Russian Economy Ministry. The EU’s share of foreign direct investments into Russia was 83 percent, or 36.8 billion euros, in the first quarter.

Russia supplies 45 percent of the EU’s natural-gas imports and 33 percent of its crude oil imports, according to EU data. At the same time, Russia is heavily exposed to the European market, as 70 percent of its gas exports and 88 percent of its oil exports are shipped to the European trade bloc.

Russia’s role as the EU’s dominant energy supplier is under threat because of Europe’s potential development of shale gas, while cheaper liquefied natural gas from the Middle East is rivaling Russian supplies, reports the Financial Times.
The EU, on the other hand, went into the meeting on its back foot because of the eurozone crisis, and it needs Russia, which has 41 percent of its 460.7 billion U.S. dollar hard currency reserves in euros, to remain invested in the euro.
Russia wants a closer partnership with the EU, one which would focus of areas of “mutual benefit” such as space exploration, including satellite navigation systems, nanotechnology and pharmaceuticals, says Vladimir Chizhov, Russia’s ambassador to the EU.

Van Rompuy and Ashton were picked in November under the Lisbon Treaty, which is intended to raise Europe’s global profile and streamline its ability to reach decisions. The summit with Russia is held twice a year. Leaders of the country holding the EU’s rotating presidency used to attend in the past.

“There used to be emotional instability for Russia every six months,” Daniilidis said. “Ashton’s objective should be that when Medvedev looks into her eyes, he sees her as the foreign minister of 500 million European citizens.”