Friday 6 December 2013

The Next Battlegrounds for EU-Russian Competition

Stratfor 05-Dec-13
Just days after Ukraine decided to freeze its integration process with the European Union, the competition between Russia and the West has shifted to two smaller but still significant states: Moldova and Georgia. On Wednesday, U.S. Secretary of State John Kerry visited Moldova in a show of support for the country's efforts to move closer to Europe. A day earlier, Georgian President Giorgi Margvelashvili said in an interview that Russia could not derail Georgia's European integration bid.

While Kiev's failure to sign key agreements with Brussels at last week's Eastern Partnership summit and ensuing protests in Ukraine have dominated headlines, the issue overshadowed the fact that Georgia and Moldova did move forward with their own EU integration bids. During the summit, both countries initialed association and free trade agreements -- important precursors toward possible accession to the bloc -- and expressed hopes of signing the agreements by early 2014. So while the summit served as a major setback to those in Kiev and Brussels who wanted to see Ukraine strengthen ties with the bloc, it did the opposite for Georgia and Moldova.

It is important to note that initialing such agreements is much different than signing them. While signing the EU pacts would strengthen economic, political and legal integration in lasting and practical ways, initialing is non-binding and merely signals an intention to sign the deals, with reversal possible if deemed politically necessary. Indeed, Ukraine initialed the same agreements in 2011 only to bow out before signing them a week ago.

For Ukraine, the stakes of signing became too high. Throughout the process, officials in both Brussels and Moscow said that signing the EU agreements would be incompatible with Ukraine's parallel free trade talks with Russia through the Moscow-led Customs Union. As Ukraine moved toward the EU path, Russia selectively applied trade restrictions on Ukrainian goods and warned of worse to come if Kiev signed the EU deals. Given Ukraine's economic dependence on Russia and the precarious state of its finances, these threats proved potent enough to derail the EU agreements.

Moldova and Georgia now find themselves in a similar situation: making significant headway toward signing the EU deals but under intensifying pressure from Russia. Moscow's tactics are similar to those it applied with Ukraine. Russia recently blocked imports of Moldovan wine, allegedly for sanitary reasons, and Russian officials have warned Chisinau that an estimated 200,000 Moldovan migrants may no longer be allowed to work in Russia due to "new regulations." Moscow has also said its recent strengthening of economic ties with the new Georgian government could be reversed if it follows through with the EU deals.

So far, Moldova and Georgia have not changed course due to Russian pressure, and certain Western leaders are intent on supporting the countries' EU integration efforts. During his stop in Moldova, Kerry visited a winery and said Washington would help ensure that the country has a large market for its wine in the United States and Europe. Romanian President Traian Basescu recently said Bucharest and Chisinau should seek reunification once Moldova joins the European Union. Both scenarios would be highly symbolic and political, albeit not exactly practical. The West has made similar gestures recently to Georgia, including visits from U.S. and European officials.

However, Moldova and Georgia will need more than gestures from the West if the two countries are serious about moving forward with the EU deals. Both depend on economic ties with Russia that, as with Ukraine, would be painful if severed. Both countries also have domestic political divisions, as in Ukraine, with certain segments of society opposing EU integration. Certainly, pro-EU sentiment is high in both countries but far from unanimous. The European Union is also divided over the matter, with neighboring countries such as Poland and Lithuania far more enthusiastic about Moldovan and Georgian integration than EU member states farther west, such as France and the United Kingdom.

Meanwhile, Russia has another source of leverage in both Georgia and Moldova: breakaway territories. After the fall of the Soviet Union, separatist tensions turned into military conflicts in Moldova's Transdniestria and Georgia's Abkhazia and South Ossetia. Each territory has since become financially dependent on Moscow, and each hosts a Russian military presence. As Moldova and Georgia's EU talks have intensified, Russia has signaled that it could use the breakaway regions to create problems for both countries. Indeed, the 2008 Russo-Georgian war stemmed from Tbilisi's efforts to join NATO, and Moscow views Georgia's EU integration efforts just as suspiciously.

Thus, as it did in Ukraine, Western and Russian activity will likely intensify in Moldova and Georgia in the coming months. Though both countries currently appear committed to signing the EU agreements, the issues that prevented Ukraine from moving forward with its EU integration will weigh heavily on Chisinau and Tbilisi as well.

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