Europe first expanded to the East to counter a Russian threat. From the time the Berlin Wall collapsed, former Soviet bloc countries longed to join the European Union and NATO, Western Europe's privileged and closely twinned clubs. For Eastern European and Baltic nations, membership offered not just economic benefits but a sense of security--in case the Russian bear turned threatening again.
Well, Europe is creeping ever closer to the bear--so close that the former Soviet republics of Estonia, Latvia, and Lithuania will soon be EU members. That's fueling bitter complaints from Russian nationalists. And controversy has erupted over the Russian enclave of Kaliningrad, which will be completely cut off from the rest of the country when neighboring Poland and Lithuania join the EU. "Why does the EU need these poor relations?" demands Alexei Mitrofanov, an influential right-wing member of Russia's Parliament. The EU's eastward expansion, he adds, reflects "a continuation of Cold War mentality."
But Russia's pragmatic boss, Vladimir V. Putin, isn't complaining. He's trying to capitalize economically and politically on the EU's new proximity. "Our priorities [are] firmly in the direction of Europe," Putin declared in his annual address to the nation earlier this year. Many Russians agree. One recent poll showed 52% of Russians think the country should eventually join the EU.
By embracing Europe, the Russian President is following the model set by his country's first great modernizer, Peter the Great, who opened Russia to the West. Putin's goal is to help create what he calls a "single economic space" in Europe. He envisions a free-trade zone stretching from Glasgow to Vladivostok. Russian multinationals could be big players in this market, while European companies would pour tens of billions of euros of investment into Russia, creating new jobs and revitalizing the country's services and manufacturing. As economic ties strengthen, so would political ties. Although Russia has no plans to apply for EU membership, Putin has made it clear that he sees Europe as a crucial partner.
He has a point. Even before the EU absorbs 10 new nations, it is already Russia's biggest trading partner. Some 35% of Russia's foreign trade goes to Europe, largely because of Russia's huge oil and natural gas exports. After the new members join, the EU will account for more than half of Russia's trade. Energy giants such as Yukos Oil Co. and Lukoil (LUKOY
) see Europe's expansion as a chance to build on investments in refineries and gas stations in Bulgaria, Romania, or Lithuania. "We see [EU expansion] as an economic opportunity," says Hugo Erikssen, director of international relations for Yukos, which has invested in refining capacity in Lithuania. Meanwhile, Gazprom (OGZPF
) is building a new pipeline to ship gas to the expanded EU.
Of course, it would take years for Putin and other Russian leaders to fulfill the vision of a free-trade zone linking Russia and the EU, if it can happen at all. So far, Moscow hasn't taken even the first steps, such as opening its financial services and telecom sectors more to foreigners, necessary to meet Putin's goal of joining the World Trade Organization by 2003. And it's likely that former Soviet bloc countries, still worried about the old bear, won't want to rush to integrate economically with Moscow again. But for the heirs of Peter the Great, the lure of the West is proving more powerful than ever.
By Catherine Belton in Moscow, with David Fairlamb in Frankfurt
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