The Standard

EU-Russia Summit Leaves Rifts

Something, But Not Much

EU leaders and Russian President Putin ended Friday's EU-Russia summit with the announcement of two minor deals -- a bi-lateral aggreement on steel and a "Memorandum of Understanding"  between European and Russian drug control agencies.

An uneventful summit has highlighted rifts between Russia and the EU where it appears there is little room for compromise.

Energy and GazProm

Little was announced publicly about the so-called  "GazProm clause" in recent EU energy market reforms.

Europe depends on Russia for 25% of its natural gas.

European leaders have recently grown weary of Russia using energy as a blunt tool to further its political interests.

The reforms require foreign companies that own both production and transport capacity for natural gas to sell off one of their wings before investing in the EU energy market.

The rules effectively block out the Russian state-run monopoly GazProm from investing in the EU market.

The issue is contentious, as it is generally assumed that GazProm's expansion plans had involved size-able investments in Europe.

Missile Shield

The summit also addressed the issue of the defensive radar and missile systems the US has proposed to build in Poland and the Czech Republic.

The US has said the missile systems are purely defensive and are intended to defend Europe from missile strikes from so-called "rogue states" like North Korea or Iran.

Russian president Putin has called the missile shield a threat to Russian national security.

At the summit, Mr. Putin compared the American proposal to the Soviet decision in 1962 to secretly deploy medium-range nuclear missiles in Cuba -- an event which led to the Cuban missile crisis and pushed the world to the brink of nuclear war.

Putin's comparison (however absurd) sends the strongest signal yet to the West that Russia will refuse to compromise on the US, Czech and Polish plans.

EU Document Drafts: Russia an "Opponent"

Strategic Partners No Longer?

EU documents prepared ahead of the Russia-EU summit have revealed a growing ambivalence toward Russia among European politicians.

Papers circulated before the summit say there is a "risk" that "Russia will distance itself from 'Europe' in its social and political development and in its approach to the world."

The wording is much milder than in earlier drafts, where ministers go far as calling Russia a "competitor and even opponent."

Apart from the official language, there is also growing distrust of Russia and Russian president Vladimir Putin in the European parliament.

Energy

Europe is dependent on Russia for 25% of its natural gas.

The dependence has made energy the primary point of contention in Russian and European relations.

Europe has grown suspicious of GazProm, the state-run gas monopoly whose employees were recently granted the right to carry firearms by the Russian parliament.

The European Commission announced a proposal in September that would prevent GazProm from investing into European energy markets.

Russia reacted to the proposals with dismay.

Bomber Flights and Missile Treaties

There is also growing concern about Russian foreign policy.

President Putin has announced he will withdraw Russia from the Conventional Forces in Europe Treaty

He also has hinted he may nix Russia's involvement in a medium-range inter-continental ballistic missile agreement (NIF).

To top it off, Russia has accompanied this diplomatic chest-thumping with increased bomber flights over Scandinavia.

On the eve of the summit the latest EU draft is neutral yet suggestive:

"Russia is likely to be marked by an assertive foreign policy, tougher internal policies and heightened rhetoric."

Week In Review

****The US, France and Germany are separately taking steps to regulate investments by sovereign wealth funds. Sovereign wealth funds are huge investment funds controlled by foreign governments. Their current value is estimated to be between $1.5 and $2.5 trillion.

****Russian President Putin and Iranian President Ahmadinejad met in Tehran on Tuesday. Their call for diplomatic unity among Caspian nations was widely seen as a geopolitical rebuff to France and the US, who have publicly considered military action as a last ditch means of solving the Iranian nuclear dispute.

****The EU and Russia announced they would jointly appoint a panel of experts to discuss EU energy market reforms proposed by the European commission. The reforms would block out Russia's politically combative natural gas monopoly GazProm from investing deeper into the EU market.

****Russian President Putin announced on state-run television that Russia is planning to substantially upgrade its conventional and nuclear military arsenals. His remarks came on the same day Russia test fired and inter-continental ballistic missile.