Four Ways for Europe to Stand Up to Russia

Today columnist Matthew Lynn of Reuters convincingly makes the case that the EU’s long-standing policy of promoting its shared values with Russia is failing to be effective whatsoever, and that new approaches and perspectives on engagement should be considered.

Russian President Vladimir Putin heads to attend a meeting with senior military and security officers in the Kremlin in Moscow, Wednesday, July 25, 2007. (AP Photo/RIA-Novosti, Presidential Press Service, Mikhail Klimentyev)

Lynn offers his ideas for four ways for the European Union to “stand up” to Russia:

First, start using European muscle to protect European companies. Oil producers BP Plc and Royal Dutch Shell Plc have been treated disgracefully as Russia seeks to reassert control over its energy assets. Just like any country, Russia needs outside expertise — and in return it must recognize that it can’t just expropriate assets. … Russian companies have been listing their shares in London, so how about telling Russia that access to the U.K.’s capital markets will be cut off unless the rights of British enterprises in Russia are protected? Two, Russia is a resource-based economy, and Europe is the main market for those resources. There isn’t much point in being a massive producer of oil and gas if you haven’t got anyone to sell to. So how about using some of that leverage? The EU could set a series of targets. For every 5 percentage points of the European energy markets that the Russians take, they need to hit certain benchmarks for opening up their market to European companies. Every time they fail, Europe should build a new nuclear power station instead. …. Three, make market access conditional. It is fine for companies such as OAO Gazprom to start making acquisitions in Europe. Countries prosper if they are open to foreigners — but they prosper even more when both sides are equally open. So every time a Russian company proposes making a purchase in Europe, how about demanding a European company is allowed to make an acquisition in Russia in return? Four, maybe the Group of Eight should be the Group of Seven again. After all, the point of the G8 is to promote cooperation between nations that are broadly signed up to a free-trading global economic system based on democracy and the rule of law. If Russia isn’t willing to adhere to those values — and there isn’t much sign that it is — then it shouldn’t be a member. Again, access to Western institutions should be conditional upon supporting the principles those bodies stand for.