Integration Processes and Policies
Status and Prospects of Eurasian Integration: A View from 2018
Elena Kuzmina
PhD in Political Science, Head of the post-Soviet countries' economic development section at the Institute of Economics of the Russian Academy of Sciences, RIAC Expert
2018 was quite an intense year for the Eurasian Economic Union (EAEU). A new version of the Customs Code came into force on January 1, introducing a number of substantial innovations aimed at optimizing the regulation of foreign economic activity and at maintaining the balance of interests between business and government agencies. [1] The key changes include simplified customs clearance procedures, the priority of electronic customs declarations, and a new approach to regulating the status of authorized economic operators.

The new Code considerably simplifies customs formalities and increases the efficacy of cooperation among the EAEU customs services thanks to the use of electronic documents and unified customs regulations. Exporters and importers can now take advantage of a deferral mechanism with regard to assessing the customs value of commodities that are subject to licensing and other payments for the use of intellectual property, part of the income from the subsequent sale or use of which is directly or indirectly due to the seller.

In line with its obligations to the WTO, Russia is gradually reducing its customs duties. The process is to be completed in late 2018.

The creation of EAEU-wide markets continued throughout the year. In November, the member nations signed an agreement on harmonizing legislation related to the financial markets (the securities, insurance and banking markets). [2] This measure will facilitate the creation of a supranational regulator for the financial market by 2025.

Nine new sectors were added to the common services market in 2018, making 52 in total. Three of the nine new sectors will become fully operational by January 2020. In terms of value, this amounts to approximately 55 per cent of the total volume of services provided within the EAEU. [3]

Work continued in 2018 to improve technical regulations. The newly signed Agreement on the State Control (Supervision) over Compliance with the Requirements of the EAEU Technical Regulations will result in better transparency and the priority of prevention over prosecution. [4]

The ongoing work to reduce technical barriers included amendments to the Uniform Quarantine Phytosanitary Requirements and the Uniform Quarantine List and the adoption of Standard Conformity Assessment Procedures and other norms.

Work on the digital economy has proved to be a new area of cooperation for the EAEU member states, which are planning to create the necessary conditions for the digital transformation of national industries and the establishment of a common EAEU digital industrial space by 2019. This target is mentioned in the Main Areas of Industrial Cooperation. [5]

The EAEU started implementing road maps for transport development in 2018. Some of the relevant activities have to do with coordinating the development of a transport infrastructure and industrial and innovative facilities. For example, the EEC Council approved the Action Plan for the production and operation of electric vehicles in EAEU member states in 2018–2020. The Plan includes a number of measures to stimulate the manufacture of electric vehicles and their basic components and the creation of charging facilities and maintenance infrastructure. It also calls for measures to promote the use of electric vehicles, including getting rid of the transport tax. These measures are to be considered by each of the EAEU member countries at the national level. [6]

The EAEU's cooperation with major regional actors expanded significantly in 2018. One example of this is the signing of the Agreement on Trade and Economic Cooperation between the EAEU and China. While the agreement does not provide for the cancellation or reduction of mutual customs duties, it does include articles on trade facilitation, the possibility of introducing electronic declarations, increasing transparency, work towards the mutual recognition of standards, technical regulations and compliance assessment procedures, joint work to protect intellectual property rights, joint regulation of the e-commerce sector, and cooperation in the field of public procurement. The agreement identifies agriculture, energy, transport, industry, information and communications, technology and innovation, finance and the environment as particularly promising sectors for future cooperation. [7]

A temporary (three-year) trade agreement was signed with Iran that involves a limit level of trade liberalization. The agreement covers 50 per cent of the total volume of mutual trade between Iran and the EAEU countries. After the initial period, the parties may sign a full-fledged free-trade-area agreement. The sides also agreed to reduce the average import duties on industrial commodities (from 22.4 per cent to 15.4 per cent for Iran and from 8 per cent to 4.7 per cent for the EAEU) and agricultural produce (from 32.2 per cent to 13.2 per cent and from 9.6 per cent to 4.6 per cent, respectively.) [8]

The tariff preferences provided by Iran to the EAEU countries cover exports worth $1 billion and extend to agricultural produce, metals, cosmetics, timber and individual types of equipment. In turn, the Iranian side will receive tariff preferences for many types of food products, as well as for construction materials, crockery, carpets and some products made from non-ferrous metals. In the future, mutual trade could grow 1.5 times (by 150 per cent). [9]

In May 2018, Moldova was granted observer status within the EAEU. [10] The country's representatives may now be invited to attend sessions of EAEU bodies, but cannot participate in the decision-making process or gain access to any confidential documents.

The future Eurasian integration trends are evident from the current development programmes for various spheres of the EAEU's activities, as well as from the global and regional cooperation vectors that have emerged in recent years.

In the medium term, the EAEU will continue to expand trade agreements with various countries. A number of free-trade-area agreements are to be signed in the near future, including with Egypt, India, Israel, Serbia and Singapore. The interim free-trade area agreement with Iran will come into force in early 2019.

Work to expand the contractual framework with China in accordance the cooperation targets declared in the 2018 agreement will continue. Given the existing agreements and trends, special attention will be paid to developing cooperation in transport, logistics, energy and agriculture.

One particularly promising method of establishing direct business ties between the EAEU and neighbouring countries is the creation of a new economic mega-partnership in Eurasia, known as the Eurasian Continental Partnership. Experts believe that "the task of the EAEU as an economic union is to seek instruments, approaches and mechanisms that would help it progress from words to actions and implement the concept in practice." [11] One such instrument for creating the Eurasian partnership could be the project to integrate the EAEU with China's Belt and Road initiative.

A number of cooperation programmes that are currently under discussion will be adopted in 2019. One of these is the interstate target programme entitled "Innovative biotechnologies for the Economic Development of EAEU Countries" in 2019–2023 and through to 2030. The programme will comprise four areas: the creation and storage of genetic resources; the development and implementation of microbial biotechnologies; the development and application of genomic technologies and the introduction of genetic certification of organisms; and the improvement of existing testing systems and diagnostic products for agriculture and public health. [12]

Work will continue until 2025 to set up common markets for labour, oil and gas, precious metals, etc. The electricity market is expected to be set up during 2019.

On the whole, the EAEU will continue to create a full-scale and effective common economic space. This will happen in parallel with the development of interaction with all the interested countries and international associations.
SCO: 2018 Roundup. Prospects and Challenges for the Future
Mikhail Konarovsky
Ambassador Extraordinary and Plenipotentiary of the Russian Federation, Senior Research Fellow at the Institute of International Research, MGIMO University , RIAC member
Positive Trends

For a number of years after the creation of the Shanghai Cooperation Organisation (SCO) in 2001, its was mainly aimed at developing an appropriate legal framework and introducing mechanisms and institutions that would implement the stated goals of ensuring security and countering the existing and emerging challenges and threats on the regional and global arena. The fact that the SCO was the first international structure in the new geopolitical landscape since the collapse of the USSR to include a number of post-Soviet republics, as well as country that had never been part of the Soviet Union (China), dictated both the features and, to a certain extent, the innovative nature of its operations.

The Development Strategy of the Shanghai Cooperation Organisation until 2025, which was adopted in 2015, identifies new targets for the organization in the light of the global and regional development forecasts. In addition to the issue of security, which is the capstone of the SCO's operations, significant attention is also paid to the economic, cultural and humanitarian aspects. Taking into account the recent large-scale initiatives being promoted by China and Russia, which at their core directly affect the SCO's domain, the organization's activities in the respective areas need to become more prominent and substantive sooner rather than later. Judging by the results of 2018, we can say that the SCO is progressing towards the implementation of the strategy.

The success of the annual SCO summit was partially thanks to the cautious rapprochement process between China and India that continued throughout 2018 (including the informal bilateral summit in China shortly before the SCO meeting), as well as to the recent positive developments in Uzbekistan's relations with neighbouring Kazakhstan, Kyrgyzstan and Tajikistan. One important milestone reached before the SCO summit in Qingdao came in the form of the annual Defence Ministers' Meeting on April 23–24, 2018, which for the first time in the organization's history involved the ministers of defence of India and Pakistan. At the meeting, the participants agreed that military confidence-building among the SCO member states and strengthening cooperation in defence in the interests of security and stability in the region remain high on the list of the organization's priorities. In the same vein, the parties not only noted the importance of implementing the SCO Defence Ministries' Cooperation Plan for 2018–2019, but also highlighted the importance of seeking new formats for such cooperation. [1] (This is something for the special Expert Working Group established at the 2014 Defence Ministers' Meeting to deal with.)

Main Results of the 2018 Qingdao Summit

The key political significance of the meeting in Qingdao was the fact that it ran smoothly in its new extended format. After accepting India and Pakistan into the organization in 2017, the SCO became the world's largest association (the cumulative GDP of SCO member countries exceeds that of the G7; the combined population of its member states accounts for 44 per cent of the world's population; the SCO countries command the largest global industrial and agricultural potential and, together, contribute up to a third of the global GDP). The presence of India and Pakistan is positive, not only for the SCO itself, but also for India–Pakistan relations. The same applies to relations between China and India.

The expansion of the SCO has also boosted its political potential – both regionally and globally. President of the Russian Federation Vladimir Putin has even referred to the SCO as a global organisation.

In this context, it was important for the SCO summit to confirm the organization's commitment to stepping up efforts to implement its three main goals: ensuring security, resolving economic problems and facilitating cultural and humanitarian cooperation.

The summit approved a new three-year programme on counteracting terrorism, separatism and extremism. The programme calls for more joint exercises and counterterrorism operations, as well as for the in-depth exchange of relevant experience and information. The approval of the SCO Anti-Drug Strategy for 2018–2023 and the drug abuse prevention convention tie in closely with this. The SCO heads of state signed a joint appeal to fight the spread of terrorist and xenophobic ideologies, as well as those that promote religious and ethnic intolerance, etc. It is the first document of its kind in the history of the SCO. The appeal resulted in the November 2018 SCO Youth Assembly in China's Dongfang, the first such youth convention in the organization's history.

Given the growing transregional interaction in promoting the exchange of trade and economic concepts within the Eurasian space, implementing the economic component of its activities is becoming increasingly important for the SCO. Russia and other SCO member states are leaning towards China's Belt and Road Initiative and calling for its integration with other economic projects in the region. Important agreements have already been reached on integrating the EAEU and the Belt and Road Initiative.

One new landmark event as part of the nascent Eurasian cooperation process was the signing, shortly before the Qingdao summit, of an agreement on economic cooperation between the EAEU and China in the summer of 2018. [2] The agreement called for launching a feasibility study mechanism for a future agreement between Russia and China on the Eurasian economic partnership, which could potentially include other SCO member states.

At the same time, India is concerned about the Belt and Road Initiative, partly because China and Pakistan want to set up an economic corridor across Kashmir, a territory disputed by New Delhi and Islamabad. The first such disagreements within the SCO occurred at the Council of Heads of Government in autumn 2017. They also made their way into the Qingdao summit declaration. Tremendous multilateral efforts would be needed to overcome this situation – efforts that are unlikely to be successful in the foreseeable future.

The Qingdao summit continued the practice of holding senior and other bilateral meetings between the leaders of the SCO member states, observers and dialogue partners. The beginning of 2019 saw the launch of a new protocol for snap meetings between foreign ministers of the SCO member states on the side-lines of UN General Assembly sessions. These will help the parties to coordinate their positions with regard to the situation in the region and around the world.

Future Challenges

The SCO's work towards ensuring regional security cannot ignore the issue of Afghanistan. The SCO member states are interested in restoring peace and stability in Afghanistan as soon as possible, a notion that was reiterated at the Qingdao summit. The SCO Contact Group, which resumed its operations in late 2017, signed a protocol on cooperation at the summit. At the same time, given the fragile state of the government coalition in Afghanistan and the unrelenting activity of the armed opposition, the SCO has been increasing concerned of late with the infiltration of Islamic State militants, including people from Central Asia, Russia and China, into that region. The Islamic State's activity in Afghanistan, as well as the generally unstable situation in the country, are fraught with additional threats to security, both in Afghanistan and in the Central Asian region as a whole. The SCO's effectiveness in Afghanistan will seriously affect its political clout within the region and beyond.

The intensification of the SCO's international contacts in 2018, with entities ranging from the UN to regional organizations, also served to improve its international profile. The establishment of an SCO parliamentary assembly would further strengthen the SCO's international prestige.

The most important short- and medium-term goal for the SCO is to maintain the coherence of the individual member states' economic programmes within the SCO project. The general strategy of the organization, as well as some of its specific aspects, could be inferred from the results of last autumn's meeting of the SCO Council of Heads of Government. The most important decisions included the new version of the multilateral trade and economic cooperation programme, which addresses the changing economic activity conditions inside and outside the SCO, as well as the preparation of the programme proposed by Russia to develop the SCO's interregional cooperation. The SCO also supported Russia's proposal to set up a forum for the heads of regions. A roadmap for interaction between research institutes was also adopted, as was (on the side-lines of the meeting) an interdepartmental document on food security. The accession of Belarus to the 2014 agreement on creating favourable conditions for road transport was a significant milestone in expanding interaction between the SCO member states and their partners.

Security and stability will remain key to the SCO's operations in the long term. At the same time, the organization's plans for expansion and development will shortly require the resolution of several practical issues closely related to the prospects for the further growth of the SCO's international reputation. This will also require that the organization revise its priorities.

Until recently, the SCO was lacking a large-scale project that would lead to a qualitative leap forward and bring all of its members together. The SCO's experience integrating EAEU with the Belt and Road Initiative as a way of gradually moving towards the Great Eurasian Partnership project could help the organization to overcome its current inertia and largely declarative nature. Active work in this area, along with deeper cooperation among the member states in the field of security and fighting terrorism, extremism, drug trafficking and crime, could help turn the SCO into the most important political mechanism of the Eurasian project.

The significance of the SCO as a leading structure capable of proposing a concrete (rather than declarative) unifying agenda for Eurasia will depend on its further institutional development, the resolution of its internal issues, and the creation of an environment for an active and coordinated foreign and economic policy.

In this context, such a sensitive and fundamental issue as the possible expansion of the SCO requires serious consideration and mutual understanding. Despite the fact that the SCO Charter does not contain specific provisions for granting observer or dialogue partner status to external actors, it might be advisable to move more actively in order to resolve the issue one way or another. Resolving this and other pressing issues facing the SCO, including expanding the functions of its Secretariat and the Regional Anti-Terrorist Structure (RATS), would contribute to the ongoing development of the organisation in all areas.
Forecasting Developments for the European Union
Nikolay Kaveshnikov
Ph.D. (Political Science), Associate Professor, Head of the Department of European Integration Studies at MGIMO University, Senior Research Fellow at the Institute of Europe of the Russian Academy of Sciences
2018 Results

The European Union experienced increased instability throughout 2018 as migrants continued to arrive en masse, European politicians feared growing hybrid threats from Russia, the outlandish actions of the United States added an air of nervousness to transatlantic political and economic relations, and Brexit negotiations continued.

The main outcome of 2018, however, is that the EU continues to function and develop. The very existence of the European Union makes it impossible to speculate about the possible use of force in relations between its member states. EU residents enjoy the freedom of movement across borders, the benefits of a common market and the conveniences offered by having a currency. EU institutions consistently implement numerous sectoral policies. The Eurozone management system, which has been improved since the 2009–2011 crisis, is operating well. Despite certain difficulties, the EU continues to maintain inclusive societies, stable democratic political regimes, highly developed economies and effective social protection systems. The quality of life in the European Union is still higher than that found in most other regions the world.

In recent years, the Juncker Commission has implemented a wide range of measures aimed at improving the functioning of the common EU market, including in terms of capital movement. The EU is implementing a program to set up a single digital market, and work to create an energy union is under way.

Despite all this, however, the political dynamics over the past year were marked by the growing influence of Eurosceptics and their consolidation on the national level. The creation of a new coalition government in Italy brought about a new reality. For the first time in the EU's history, populists and Eurosceptics managed to come to power in one of the union's leading countries. The weakening of the parties that form the large coalition in Germany has led to growing turbulence in the political system of this key EU country.

The EU institutions, for their part, have launched the process of introducing sanctions against Poland [1] and Hungary [2] for disregarding the Union's fundamental values. This conflict obviously goes beyond to the "EU-versus-offender" logic. We are witnessing a growing divide in values within the EU and a revival, in the eastern part of the Union, of national conservative ideology and populist and persona-centered regimes – that is, of everything that is most often described as "illiberal democracy."

The negotiations on the terms of the "divorce" and future relationship between the United Kingdom and the European Union are unlikely to have any significant effect on the latter's transformation processes. London is already perceived as an external partner, and relations with external partners have never had any substantial impact on the dynamics and development of the European Union.

European politicians continue to reinvent the role and place of the EU in the modern turbulent world. The main challenges here are the growing egotism and unpredictability of the United States, the security crisis in Eastern Europe, China's attempts to intensify relations with individual EU member states, and the looming Brexit. This reinvention process, however, is going to take time.

Forecast for 2019

The elections to the European Parliament will be of fundamental importance to the EU's development in 2019. Rather than being just another vote, the elections have already turned into a "battle" for the alliance's future. While the role of the European Parliament among the EU institutions may not be that important, the election results will demonstrate the scale of the changes taking place in the political elites.

The EU public space is particularly susceptible to the general crisis of the liberal globalist ideology. After all, the EU represents an attempt to build, within a single region, an ideal model of political liberalism, economic and foreign-trade liberalism, and globalism that implies the transfer of sovereignties.

In the European Union, the crisis of liberalism is being transformed into the growing influence of populism, nationalism and right-wing conservative ideology. Populist and persona-centered parties are growing stronger. These parties base their strategy on anti-elitism; they undermine the role of the establishment parties and destabilize existing party-political systems. Almost all of these forces appeal to various aspects of the nationalist ideology and promote the need for a "strong" state, frequently resorting to Eurosceptic rhetoric.

It is now clear that, instead of the domestic political issues so common for the individual EU member states, the 2019 EU parliamentary campaign will be based on the dichotomy of having "more" or "less" of the alliance.

The results of the 2019 elections are likely to see the influence of the Eurosceptics in the European Parliament grow, and they may secure between 180 and 200 seats. However, most of these newly elected MEPs will profess a "mild" variety of Euroscepticism, in that they will criticize the EU's functioning principles and demand that its powers be restricted to some extent. They are unlikely to call for individual countries to pull out of the EU.

The second actor capable of tipping the balance of forces within the European Parliament is most likely to be Emmanuel Macron's La République En Marche! movement, which is already seeking allies outside France.

The long-standing consensus-based operation of the European Parliament, which relies on a balance between the European People's Party and the Social Democrats, is about to be a thing of the past. One possible scenario would be for four roughly equal groups to emerge, each comprising between 130 and 160 MEPs. Pro-European Macron supporters would join forces with the Liberal Democrats and MEPs of some other pro-European parties. The traditional left- and right-centrist party groups would be preserved; both groups would include a noticeable number of moderate Eurosceptics. A group of moderate Eurosceptics would unite disparate populists and nationalists, and would be dominated by right-wing conservatives.

This configuration would institutionalize the confrontation between those in favour of deepening integration and the Eurosceptics. At the same time, flexible coalitions will be possible, sometimes uniting the right against the left, sometimes pitting Eurosceptics against Eurooptimists.

Somewhat similar changes are possible within the Council of Europe. Few member nations will be able to provide consistent support for greater integration on a broad range of issues. Most of the European leaders will be forced to reckon with the domestic political dynamics and specific national interests, so will be willing to seek common solutions to certain problems on the pan-European level. On other issues, they will be inclined to try and minimize the EU's role in order to preserve or regain freedom of manoeuvre to conduct their respective national policies.

The new era will be marked by the bowing-out, in 2019, of Jean-Claude Juncker, the last remaining patriarch of European federalism (he will be followed shortly by Angels Merkel). Pragmatists have been replacing supporters of "big ideas" over the past several years. A significant portion of politicians (both Eurooptimists and Eurosceptics) will be pragmatic in their assessments of the EU's usefulness as an instrument in addressing common challenges and achieving common goals.

This approach will present an opportunity to reconcile the irreconcilable: namely, to deepen EU integration in areas where it is clearly necessary in order to achieve common goals, while simultaneously demonstrating greater flexibility with regard to politically sensitive issues or wherever existing differences in national interests so require. At the same time, all the sensible and pragmatic EU politicians understand that it is in the strategic interests of their respective countries to preserve and develop key EU projects. On the other hand, the potential price of the degradation of the European Union is so high that it is a very effective incentive for the political elites to seek common solutions for common challenges.

Such a reconfiguration of the EU will accelerate trends that are already noticeable today: a lowering of ambitions, a decrease in the role of values as incentives for political decision-making processes, and the growing divide in the levels of communitarization for certain political aspects. At the same time, EU institutions will rely on the support of a key group of countries in order to continue effectively monitoring compliance with the requirements of current legislation, primarily in the economic sphere. The European Commission and various EU agencies will similarly continue their regulatory activities within their current remit.

Major domestic challenges and the ongoing systemic transformation of the EU prevent European politicians from devoting much attention to relations with Russia. Apart from the aforementioned circumstances, there are two more factors that will preclude the EU from investing resources in the development of a proactive strategy. First, there is the understanding that the Europeans will remain hostage to a strategic confrontation between the United States and Russia, at least in the medium term. Second, the difference in the EU member states' views of the Russian factor will impede the adoption of any significant decisions (both confrontational and constructive). In this situation, the EU's policy will be dictated by the inertia of its prior decisions. This scenario does not rule out attempts by individual EU countries to use the Russian factor as a bargaining chip in their attempts to secure concessions from other EU partners. It is also possible that some EU countries will try to obtain specific preferences from Russia in exchange for promises to promote Russia's interests in the EU, knowing full well that such lobbying attempts will never work. The propaganda confrontation will continue, as will attempts to blame Russia for "meddling" in the internal affairs of EU countries. However, given the difference in positions within the EU, any consolidated response is unlikely.

Forecast for 2024

The EU of 2024 will be shaped by two groups of factors.

External developments will play a decisive role here. No matter who becomes the next President of the United States, the country will be less committed to multilateral economic and security institutions. A certain degree of degradation of global trade institutions will have a significant negative effect on economic growth rates. Given the global turbulence, the risks associated with tensions in regions on the periphery of the EU will remain and, more likely, escalate.

Under these circumstances, the European elites will complete the process of revising the EU's role in the world. Once the United Kingdom has exited the alliance, the idea that the EU is a "union of small- and medium-sized countries" will become even more relevant. [3] The limits of "soft power" will become visible, and any attempts to "export" one's own principles and norms will lose their significance. Strategic dependence on the United States with regard to security will force the EU to make certain (albeit limited) political and economic concessions. The Union will continue to develop its autonomous defence potential. However, objective restrictions in this respect will prompt the EU to focus on stabilizing the situation in neighbouring territories and preventing the associated risks from spreading further afield.

These changes will be particularly manifested in attempts to resolve the migration crisis. Due to the contradictions between the "borderline" and "internal" EU countries, the Union will not be able to develop an effective refugee settlement system. The growth in anti-migrant sentiments in many EU member states will force politicians to focus on security issues, to the detriment of humanitarian considerations. The EU's strategy will be based on cooperation with neighbouring countries, similar to its agreement with Turkey. This, in conjunction with stringent control over migration routes, will bring the number of new migrants down to an acceptable level. The policy of integrating migrants representing other cultures is gearing up, but its results will not be noticeable by 2024.

The second group of factors will be linked to growing economic differences between the more developed (northern and western) and comparatively backward (southern and eastern) economies in Europe. The latter are still characterized by low growth rates, high unemployment and massive public and private debt. Therefore, they will be more vulnerable to the predicted global economic slowdown and shrinking international trade. The increase in economic differences will result in an even wider gulf in the levels of political influence.

The continued centralization of economic governance in the Eurozone will be fuelled by proposals coming from Germany as the representative of the "healthy" EU economies. Monitoring of the economic policies of the member states as part of the European Semester will become more efficient. Thanks to support from those countries advocating risk-reduction measures, EU institutions will be able to impose stricter control on national budgets (based on the Fiscal Stability Treaty) and the status of the banking system (based on the Banking Union). The introduction of a Eurozone budget as a structure separated from the EU budget will complete the transfer of strategic economic management functions to the Eurozone institutions (Eurogroup).

Within the Eurogroup, a core cluster of key countries will stand out: Germany, France, the Benelux countries and several other nations. This core will conduct regular meetings prior to the official EU summits and Council of Europe meetings and will be responsible for devising a foreign political strategy and development strategies for the EU. This group of countries will essentially become an unofficial EU security council. One of the most difficult tasks in forming this core would be to involve Poland as the representative of the eastern part of the EU, given Poland's unwillingness to switch to the euro and its population's general sympathy towards illiberal democracy.

Many of the initiatives to deepen integration are likely to be implemented in the Eurozone format (which may include or exclude individual countries). This will transform the EU into a core-and-periphery system. [4]

The process may be accompanied by returning certain secondary powers to national governments. In addition, economic centralization may continue amid greater tolerance for the political peculiarities within individual EU countries.

It is entirely possible that by 2024 the EU may be described using the following metaphor: "the castle of the political and monetary union in the common-market garden that is protected by a wall from the risks of the turbulent world." At the same time, the lack of strategic autonomy in the political and military domain and its slowly declining influence on the global economy will continue to be factors restricting the further development and operations of the EU.

When attempting to forecast the future relations between the European Union and Russia, it would be logical to consider the possibility of the current political and economic trends in Russia remaining unchanged.

In this case, Russia's significance to the EU will be determined by two factors. First, Russia will be perceived as a source of geopolitical risks (in this context, perception would be even more important than the actual state of affairs). Second, Russia will continue to be the largest supplier of energy resources to the EU.

Given the limited resources and the differing positions of UN countries, European nations will be forced to accept the fact that it will be the United States that determines the intensity and dynamics of strategic confrontation with Russia. The EU will most likely refrain from an active role in the U.S.-led course towards escalating tensions, but it will not be able to offer any alternative either. It would be naive to expect the EU to somehow mitigate the effect of the U.S. pressure on Russia (for example, it is unlikely that a mechanism similar to the one that allows European companies to bypass the U.S. sanctions against Iran will be created).

Further liberalization of the EU energy market and the growing regulatory role of the European Commission are likely to limit the negotiating capabilities of Russian companies. Moderate demand for imported gas will allow EU member countries to be more active in using politically motivated regulatory measures in order to restrict supplies from Russia. Russia's ability to use energy as an instrument of political influence will continue to decline. Furthermore, the EU or some of its member states could attempt to use the issue of Russia's access to the EU energy market to pursue their own political agendas.

Constructive relations will most likely be limited to selective cooperation and interaction at the level of civil society. It is possible that the EU will establish ties with the Eurasian Economic Union in order to regulate trade issues.

On the whole, the EU policy towards Russia will, consciously or not, be founded on strategic expectations. The EU actions after this waiting period will depend on the ability of the Russian government machinery to ensure economic development and domestic political stability, as well as on how the transformation of the world order is going to affect the freedom of action of the key international actors.
NATO: The Long‐term Stability of Deterrence
Sergey Utkin
PhD in Political Science, Head of Foreign and Security Policy Department of the Centre for Strategic Research, Head of Department of Strategic Assessment, Centre for Situation Analysis, Russian Academy of Sciences, RIAC Expert
Since 2014, the increased tensions between Russia and the West remain a decisive mobilizing factor for the North Atlantic alliance. Although the NATO member countries take noticeably different approaches to their bilateral relations with Moscow, when it comes to making consensus, priority is nevertheless given to preserving the once-stated harsh stance that does not allow for a return to "normal" interaction on the Russian question. For a military and political inter-state organization, maintaining a consensus is not only a mechanism for achieving common goals, but also a condition of its existence.

Most of the organization's countries acknowledge the obvious: despite their participation in a number of military campaigns, even the relatively large European states do not have the military potential that would be of significant interest for the United States, NATO's dominant power. Hence the key risk for NATO's future lies in the weakening of transatlantic solidarity. The geopolitical confrontation with Russia becomes a stimulus that, on the one hand, makes preserving and bolstering the U.S. military presence in Europe meaningful, and on the other hand prompts European political elites to increase defence spending and modernize their arms.

With the end of the Cold War at the turn of the 1990s, European countries accorded significantly lesser priority to "hard security." NATO attributes the current spiral of tensions to Russia's policies with regard to the Ukrainian crisis. The situation in the conflict zone in the east of Ukraine is not moving towards a settlement, nor is an escalation on the cards. NATO believes that the most pressing and necessary decisions (primarily concerning boosting the military presence in the Baltic Sea) have already been made, and that other adjustments may be gradually prepared and implemented without any particular haste. Russia has proved that the foreign political approaches it has taken that displease the West are stable, and the state of Russia's decision-making does not promise any revolutionary changes. The NATO countries strive to ensure a comparable level of stability in implementing their stated fundamental positions, although it is much harder to do given the turbulent domestic political life of some member countries.

NATO in 2019: Trump as a Virus

When Donald Trump was elected President of the United States in late 2016, many Atlanticists were gravely concerned. Both during his electoral campaign and after his inauguration, Trump repeatedly criticized NATO and some European allies, implying they were freeloaders living at the expense of Americans without any benefits going to the country's taxpayers. The claim that Europe needs to increase its contribution to the common cause of the alliance is nothing new: similar issues were brought up during the Cold War and in the decades that followed. What was new was the harshness and open selfishness of Trump's rhetoric, which clearly appeal to some American voters.

A certain adaptation to the new President's style did soon take place. The United States' allies can see that not all of Trump's hard-hitting remarks translate into practical politics. Great hopes are pinned on the U.S. system of checks and balances that allows Congress to play a significant part in shaping the country's policies, as well as on the so-called "babysitters," that is, qualified state officials privately striving to minimize the damage caused by the eccentric president.

Speculations concerning Trump's possible impeachment were not borne out. His opponents are intent on preventing his re-election in November 2020. By all accounts, his new quarrels with his country's allies will not score the president any additional points with his voters, but they could push away the undecided. Preference may be given to the image of an original leader who annoys the elites, but ultimately conducts an effective policy. The Baltic countries and Poland – NATO members that have adopted the most critical stance on Russia – are willing to interpret Trump's significance in this particular vein. From their point of view, far from interfering with implementing previously conceived measures intended to contain the "Russian threat," the current U.S. Administration is, on the contrary, more consistent and assertive in putting those steps into practice compared with the Barack Obama administration. This stance may advance the development of bilateral relations between some of the allies and the United States, but it will hardly become common for the European members of the alliance. During the first half of Trump's presidency, the sceptical attitude of Germany and France towards the U.S. leader only grew stronger.

In such circumstances, Trump can, without openly opposing the very idea of the North Atlantic alliance, choose to encourage "top performers" and punish "stragglers." The decision may be taken to deploy a permanent U.S. military base in Poland, which could be followed by requests from other countries that view U.S. presence as the best security guarantee. Moscow's retaliatory steps will not pose a significant problem for Washington and will allow Trump to finally handle the attacks of critics reproaching him for being unjustifiably soft on Russia or even dependent on the Russian leadership. Germany's displeasure will be countered with references to low defence spending and the low combat readiness of its military, thus further weakening Germany's negotiating position in talks on major trade matters.

The future of strategic stability treaties – the INF Treaty and START – could similarly divide NATO. Formally, NATO advocates maintaining this international legal framework, but should the United States follow through on its decision to withdraw from the INF Treaty, those countries that are the most critical of Russia will defend the decision of the U.S. administration and possibly offer to participate in deploying additional U.S. arms in Europe. The protests of Germany and France will be interpreted as their desire to evade collective defence commitments and maintain good relations with Russia at the expense of their allies. Extending the START Treaty, which needs to be agreed on no later than 2020, may trigger another spiral of debates between the part of Europe that still harbours hopes for a workable international law and the transatlantic coalition that believes only in the force factor and in the logic of containment.

Brexit is turning into another trial for NATO. Even if a transition period is agreed upon in terms of the rules of trade, economy, etc., London will have to leave the EU's decision-making bodies in late March 2019. Repeated assurances that the "divorce" will have no impact on security relations need to be confirmed in practice. The United Kingdom will have major political incentives to position itself as an opponent to the ideas of Paris, Berlin and Rome in matters concerning the European and global institutional architecture. Turkey, another major NATO member, is also accumulating grievances against the EU. The current discussions on Europe's "strategic autonomy" will hardly result in anything significant, but fierce debates between ardent proponents of "autonomy" and sceptics will themselves bolster the sense of discord within NATO.

Developments in the areas of real or potential conflicts may have a decisive impact on NATO's short-term dynamics. The post-Soviet space remains a risk area. In the United States itself, debates periodically flare up about a possible military solution to the Iran problem, intervention in Venezuela and other scenarios for the use of military force. The Trump administration is not inclined to invest too much time and political resources in mobilizing its allies. In the event that United States unilateral launches a military operation, NATO members may face a choice that is not so much operational and tactical as it is political: what will be required of them will not be aid, but approval.

NATO in 2024: Strategic Patience

Despite noticeable transatlantic differences, the scenario preferred by most NATO members views Trump as a short-term anomaly, and as soon as in 2021, the new leader of the alliance's leading power will bring back the disrupted unity of approaches and harmony of relations. However, such changes might prove almost superficial. A certain level of discord in the expanded bloc has been and will remain inevitable. Strengthening transatlantic solidarity will do little to make the dilemmas that NATO faces today in terms of developing a common view of threats and an adequate strategy for dealing with them any simpler.

Even if the world faces new local conflicts in the coming years that attract NATO's attention, strategically, the issue of relations with Russia will retain its key significance. Given the current trends, by 2024, the parties will likely be in a state of controlled confrontation that is still fraught with risks. The year of the next presidential elections in Russia is unlikely to bring a significant change in the established foreign political landmarks. Every party is banking on strategic patience that will force the opponent to be the first to agree to compromises that have previously been rejected.

The developments in the post-Soviet space – which is still an area of struggle for spheres of influence – will remain critical. Practically any overt or covert confrontation between Moscow and its opponents will bolster the stance of Russia's critics in NATO. If non-bloc states are increasingly pulled into the geopolitical rivalry, then the parties may arrive at a direct confrontation, one that is similar to that between NATO countries and the Warsaw Pact countries during the Cold War.

On the whole, European allies will continue to depend on the United States in matters of military security. Even if the EU does consistently and successfully steer a course for greater independence, no significant results will have been achieved by 2024. As for strategic arms and the "nuclear umbrella," dependence on Washington is essentially impossible to overcome, and should the system of limiting and reducing nuclear arms collapse, this particular area will regain its forgotten topicality.

There is a slight chance that the parties will be able to agree in time on "red lines" and additional confidence measures that will make it possible to reduce the risks of military incidents and preserve and strengthen the negotiating and legal framework of relations between Russia and some NATO members, as well as between Russia and the alliance as a whole. Since a major part of the NATO–Russia Council mechanisms are essentially blocked, the Organization for Security and Co-operation in Europe (OSCE) may serve as a venue for seeking solutions in the spirit of the "Structured Dialogue" that has already been launched. Today, however, a scenario of generally reducing tensions along such lines looks less likely.

NATO and Russia have formed what can be termed as tracks for the development of their strategic cultures that will not undergo any principal changes in the foreseeable future. The parties strive to avoid mutual dependence in the military area. The United States views China and Russia as factors that are significant in the military aspect; at the very least, they prompt concern and do not inspire confidence. European NATO members, fearful of being marginalized in a world where military power matters, are slowly building up their own military potentials. Countries caught between Russia and NATO feel the instability of their situation and, with varying success, strive to offset this instability by developing relations with different key players.
Increasing international tensions are a natural environment for a military bloc. Whatever their inner contradictions, which should be neither ignored nor exaggerated, the point of NATO's existence will remain for its member countries, as will Russia's critical attitude towards the alliance. The issue of a possible regional security architecture will be solved far beyond the 2024 horizon. As for the near future, all bets have already been made.
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