A Japanese Rethinking of Europe-Russia Relations

December 24, 2008, by Shoichi ITOH　　

A few years have now passed since I began paying frequent visits to EU nations and to have talks with both energy industry people doing business with Russia and academics working on Russian economic and political issues. During a recent visit there in November 2008 I was able to meet with representatives from E.On. Ruhrgas, TOTAL and Gas de France, British Petroleum as well as from major think tanks in Berlin, Paris, and London. Comparing in extensive fashion their views on contemporary Russian affairs once again helped provide a “general picture” of European attitudes toward Russia.

The Europeans are currently seeking to diversify their energy supply routes which, they believe, are overly dependent on Russia, whereas Japan is trying to increase its dependence on Russia almost from scratch. It is quite intriguing, however, to reassess the superficial image of Europe-Russia relations described by some of those who advocate Japan's need to learn from Europe’s experience. “Down-to-earth” research on Europe’s perception of Russia demonstrates the complexities of their relations with Russia, including those in the energy sector.

The European Union (EU) and Russia have yet to reach an agreement to renew the 1997 EU-Russia Partnership Agreement which expired in 2007, and it would be reckless to say that the European Commission’s conclusion represents a “united EU policy” based on a region-wide consensus. While Moscow has resurrected its ambition of expanding its sphere of influence in Europe against the backdrop of skyrocketing oil and gas prices up to the summer of 2007, EU members are divided as regards their criticisms of Moscow’s use of energy as a diplomatic weapon, the Russo-Georgian War of August 2008, and the reversal of democratization. It is a matter of fact that Germany and France are two of the EU countries which support a rather conciliatory policy toward Russia in view of stabilizing their energy interdependence with Russia developed since the then Soviet period of the 1970s. When it comes to the question of toughening the EU’s policy toward Russia, the Germans and the French do not agree with the Poles, Czechs, and Balts who are not free of the dreadful memory of living under the “Russian yoke” during the Soviet period,

It is also wrong, however, to argue that the Europeans by and large do not have something in common in their assessment of the Russian mode of behavior. We can fairly say that both power elites and those who do business with Russia even in Germany and France have increasingly admitted that it would be unrealistic to hope that the Russians would ever adopt Western values such as democracy and the rule of law. In other words, the initial euphoria of expecting Russia to be “a part of Europe” with the fall of the Iron Curtain has been betrayed on both sides.

The Franco-German attitude toward Moscow appears rather compromising, not because they see Russia’s enhanced hawkish stance as fully understandable. It is rather because 1) the Bush administration went too far in attempting to limit Russia’s voice in world politics; 2) a historical sense drawing from the 19th century balance of power system is being revived in the minds of European power elites; and 3) Russia can provide new markets to tap.

Broadly speaking, the Europeans’ acceptance of deeper economic ties with Russia is based on the pragmatism of exploiting the present situations for business profits. It is true that France and Germany, above all, have attempted to engage Russia on every possible issue without needlessly worsening their relations with Moscow. It would be a big illusion, however, if Moscow continues to believe that the Europeans would ever accept, as a realistic scenario, its advocacy of “the European Common Home” with an aim of driving a wedge between the EU and the United States.

Most Europeans basically do not believe that the Russian mentality and business conduct have greatly drawn closer to those of the West even after nearly two decades since the demise of the Soviet Union. The overall investment climate in Russia has improved only in a relative sense compared with the Yeltsin-period with its politico-economic chaos. It does not mean that their perception of Russia’s non-Western parochial mind inherited from the past has changed or ameliorated, even if the generation gap between the youth and the ex-Soviets can be slightly differentiated.

European businessmen (the best representatives are the Germans) often demand that their respective governments should support their better access to the Russian markets without deteriorating relations with Moscow. They also say that Russian businesses are profitable enough even with the connivance of Russian misconduct and corruption. It is especially so in the case of energy companies. One Russia expert at an energy company frankly said to me, “We all know Gazprom is a corrupt company. But we would need to ask ourselves if we really wanted an uncorrupt Gazprom with higher transparency of its corporate governance which might increase the state company’s productivity and thereby Moscow could strengthen its power to use energy as a diplomatic leverage more effectively. Russia’s capability to use energy as a weapon is more limited than intended ironically because of inefficient management of the company.”

It is striking to compare European pragmatism with the “fanatic” enthusiasm of a certain Japanese circle, having stakes in doing business with Russia, which emphasized the following points especially after Russia’s controversial and globally criticized decision to suspend gas supplies to Ukraine in January 2006 and even after Gazprom’s strong-arm acquisition of Japanese equities in the Sakalin-2 project under the Russian government’s arbitrary interference on the grounds of environmental violations: 1) Russia has never had an intention of using energy as a diplomatic weapon; 2) those who criticize Russia’s investment climate are children of U.S. ideology and still cling to a Cold War mentality; 3) the Japanese media is exceptionally biased against Russia; 4) Japan should increase its energy dependency on Russia as much as the Europeans have attained; and 5) the participation of (a) Russian state company should be unconditionally justified regardless of the means.

Suffice it to say that virtually every single energy expert I met in Europe over the past few years pointed out the case of the Sakhalin-2 incident as an exemplar of Russia’s aggressive behavior in the energy sector. When meeting European energy experts over the years, I have raised the same question whether they believed that the Kremlin would have contrived to increase Gazprom’s stakes in the Sakalin-2 project even in the absence of environmental violations. They all answered “yes,” saying that Russia could have attempted to do the same at any rate: most of them were appalled at the fact of how quickly and easily the Japanese caved in to Moscow. Such a cynical assessment of Japanese conduct by the Europeans does not testify to some Japanese experts’ oversimplified description of the EU-Russia energy relationship.

In the event that the Russian economy enters into a long-term recession in the aftermath of the current financial crisis whose impact has been more serious to date than the Russian leaders imagined at the outset, the Europeans would gradually stop conniving at a rise of authoritarianism in both the political and economic arenas. If the new U.S. administration is to pursue multilateralism rather than unilateralism in global issues, it is likely that Russia will have fewer friends in Europe who support its anti-U.S. rhetoric.

The development of Russia's relations with the Europeans is not necessarily an evolutionary process, but is conditional. In addressing its relations with Russia, Japan should reflect on the experiences of Europe. However, Tokyo must bear in mind that Europe-Russia relations are not something solid, but are fluid and ever-dynamic.

Shoichi Itoh is Associate Senior Researcher at the Economic Research Institute for Northeast Asia (ERINA), Niigata, Japan. He is one of the top specialists in the filed of Russian energy diplomacy in Japan and as a Research Fellow of the SRC he is contributing to a series of SRC projects and conferences, including the project called “the Establishment of the Network of Environmental Studies in the Pan-Okhotsk Region.”

＊The views expressed in the essay belong solely to the author and do not represent the official position of any organizations to which the author is permanently or was temporarily affiliated.

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