European Neighbourhood Policy

Module 14

Dr. Nathaniel Copsey

MGIMO 14–17 April 2009

Aims and Objectives of the Course

• To provide a comprehensive overview of the European Neighbourhood Policy, the main foreign policy tool with which the European Union seeks to master relations with its neighbours in the east and south

• To illustrate how the European Union functions as a foreign policy actor and the tensions at play between Member States and institutions

Course Content I

• Session 1

Origins of the Policy

Reasons for the Policy

Functioning of the Policy and Tools

Course Content II

• Session 2

Implementation: ENP in Practice

Development of the Policy

Member States’ and Partners’ Views of ENP

• Session 3

Financial Aspects of the ENP

European Neighbourhood and Partnership Instrument (ENPI)

The Neighbourhood Investment Facility (NIF)

Cross-Border Cooperation

Course Content

Session 4

New kinds of agreement between the EU and its neighbours

New Enhanced Agreements and Association Agreements

Trade and Trade-related issues, the FTA-Plus

Session 5

Sectoral Aspects of ENP• People-to-people, education, culture and youth• Justice, freedom and security• Security and conflict prevention• Energy, transport and environment• Social Aspects

Course Content

Session 6

Regional Aspects of the ENP• Union for the Mediterranean• Black Sea Synergy• Eastern Partnership• Policy Challenges: the impact of the global financial

crisis• The ENP in the future• Conclusions

Session 1: Introduction to the ENP

• Origins of the policy pre-2004• Why have an ENP? Reasons for the ENP:

Timing, Security, Politics, Institutions• How the ENP Works: Functioning of the

Policy and its Tools

Origins of ENP I

• EC–Soviet Union relations very unimportant; little COMECON–EC trade

• Post-1989/1991 – ‘Reuniting Europe’ concentrated overwhelmingly on Central European states, i.e. Poland, Czech Republic, Hungary etc.

• Mid-1990s signing of Partnership and Co-operation Agreements (PCAs)

• TACIS (Technical Assistance) programmes• Overall, not much interest until early 2000s• Border moves eastwards in 2004 and 2007

Origins of ENP II

• Early 2000s big bang enlargement is drawing nearer;

• EU will have a new border far to the East and ‘new’ neighbours: Ukraine, Belarus and Moldova;

• Russia had, of course, been a neighbour since 1995.

• Perceived need for a new policy towards the East, why?

Reasons for the ENP: Timing

• New Member States will bring their own agendas and policy preferences (cf. Polish non-paper on ‘Eastern Dimension’ of 2003)

• Need to master the policy area/design a framework before the accession of 12 new Member States with potentially different policy preferences for relations with the Eastern neighbours

• Remember: the new MS’ preferences are very different to those of many of the EU-15: new MS, former satellite states of the Soviet Union and some are former Soviet republics

• So why a European Neighbourhood Policy?

Reasons for the ENP: Security I

• Official reason:

‘Greater economic development, stability and better governance in [its] neighbourhood’ (Commission, 2007)

• Alternative explanation:

Security: from migration pressure, organised crime (Schengen border moves eastwards) and in energy supply via ENP countries towards Russia

Key point: the EU imports much of its energy in the form of gas from or via ENP countries (e.g. through Ukraine/Belarus and from Algeria)

Reasons for ENP: Security II

• Why is security so problematic?• Most ENP countries are poorer than EU average• Many ENP countries are politically unstable at the domestic level• Many are non-democratic (i.e. Belarus or Egypt)• The rule of law does not run in most ENP countries as it does in

the Union• Many ENP countries are suffering from ‘frozen’ (Moldova,

Azerbaijan/Armenia) or even hot conflicts (Israel/Palestine, Georgia)

• All of which create a major headache for the Union

Reasons for the ENPSecurity III

• Some specific examples of the Eastern neighbours and the way that the Union views these countries

• Ukraine, Belarus and Moldova• Shared and specific problems

Reasons for the ENPSecurity IV

• Shared characteristics of the three eastern European ENP states

• Challenges faced by these three states in 1991 were even greater than those of, for example, Poland

• State- and Nation-building• Severe economic collapse: “shock without therapy”,

extreme poverty• Democratization• Regional/ethnic conflicts• Resurgence of authoritarianism• Problematic relations with Russia

Reasons for the ENPSecurity V

Ukraine

• Very poor: GDP per capita $4,319(IMF 2008); EU $29,000(IMF 2008 figures)

• Decade of negative economic growth 1990–99; economy unlikely to return to 1990 level before 2012

• Status of Crimea and Black Sea fleet• Population fall: 52 million in 1992 to 46 million in 2007 • Aftermath of Chernobyl disaster• Rise of the financially integrated groups (FIGs) and in the insider

economy• An east-west divide?

Reasons for the ENPSecurity VI

Belarus• Europe’s Last Dictatorship’ precluding any further

integration with the European Union; PCA in abeyance

• Next phase of Union of Russia and Belarus’?• Persistence of a planned economy (around 51% of

employment is in state sector)• Yet, GDP per capita remains higher than Ukraine at

$6,058 (IMF 2007 figure)

Reasons for the ENPSecurity VII

Moldova• Breakaway Pridnestrovian Moldavian

Republic largely precluding closer relations with EU

• Organised crime a serious issue• Relations with Romania• Poorest country in Europe, GDP per

capita $1,830 (IMF 2008)

Reasons for the ENPSecurity VIII

• All of the above combine to create a serious headache for the European Union

• Plus from the beginning of the 21st century, Russia is beginning to recover and reassert its traditional dominance over the region

• This is exceptionally important for reasons of energy supply. See map.

Reasons for the ENP: Institutional

• Obvious also that Partnership and Cooperation Agreements of the 1990s did not work – they lack political clout and hard conditionality

• Enlargement worked using conditionality to stabilise the region, but the feeling arose that enlargement has gone too far

• How to have conditionality without enlargement?

Reasons for the ENP: Political

• Need to balance the ‘eastern’ and ‘southern’ dimension of the EU’s foreign relations with its neighbours

• Some MS are more interested in East than the South and vice versa

• MS are keen that ‘their’ preferred country/region should get lion’s share of resources and political attention

• Hence ENP aimed to balance these competing regional interests

ENP was an administrative solution to a political problem

Reasons for the ENP: Academic Interpretations

Ian Manners and the notion of ‘Normative Power Europe’• That the European Union is first and foremost about norms and values: peace,

democracy, human rights and the rule of law• The European Union is obliged to spread these norms and values• Potential criticisms: ‘Europe’ began as a single market and a common agricultural

policy as a means of preventing war between its member states. In 2009, it is still mostly about the single market (and to a lesser extent the CAP).

Europe as Empire – explanation, Jan Zielonka and others• Europe as a civilizing regional power that seeks stability and influences its satellites,

rather like Rome;• Aim is to make our neighbours ‘more like us’ and spread the Pax Europeana to the

East and South

Both observations lack full explanatory value, but it is certain that the motivations behind Europe’s politicians and civil servants reflect elements of both of these explanations.

Reasons for the ENP: Summary

For the European Union:- Security: borders, migration, co-operation in

the fight against organised crime (esp. drugs, human trafficking)

- Stability- However – apart from the transit of energy

supplies – relations between the EU and the ENP countries are economically insignificant

Reasons for the ENP:A View from the ENP Countries

For European ENP countries (and, to an extent, Israel):• Main attraction: possibility of eventual accession to the EU. This clash of

objectives creates a major tension between the Union and the ENP countries.

For all ENP countries• Long-term access to the Single Market (without free movement of

workers in medium term), short- to medium-term creation of a comprehensive and deep Free Trade Area

• Visa facilitation

Arguably for most ENP countries• Support for modernization and democratization, transformation along

lines of new Member States between early-1990s and the present

How does ENP Work: Functioning of the Policy I

• Policy is about making neighbours ‘more like us’, i.e. more like the Member States of the European Union without the perspective of eventual accession to the Union

• Methodology employed by the European Union follows that of enlargement

• ‘More for more’: the more ENP countries achieve in terms of desired reforms, the more they receive from the Union

• Commission publishes regular ‘progress reports’

How does ENP Work? Tools

• Bi-lateral agreements between the European Union and its neighbours

• These can be:• Partnership and Cooperation Agreements• Action Plans• Association Agreements

Partnership and Cooperation Agreements

• Not strongly binding or conditional• Rather vague in content and commitments• Took a long time to be ratified in target

countries (sign of the low esteem in which they were held)

• EU not very interested in these• Pre-date ENP

Action Plans

• Much more concrete documents, with clear policy objectives, i.e. for Ukraine, accession to WTO, free and fair elections, free media, tax reform, approximation of key legislation (acquis) etc. etc;

• Clear for both sides to see what has been achieved and what has not;

• Short timeframe for completion (3 years with automatic roll-over of the agreement at the end of the period);

• Supposed to be complemented by national implementation plans;• Monitored by the Commission in an annual progress report;• So the Union sets the agenda. Written by Brussels and ‘signed off’

by ENP states.

Association Agreements

• NB: previously referred to in some cases as ‘new enhanced agreements’ to prevent a link being made with the Europe agreements of the 1990s with the central Europeans

• Highest form of bi-lateral agreement between the EU and a third country;

• In effect the country in question becomes an ‘associate member’ of the EU;

• Governed by an Association Council with the powers to make legally binding decisions that apply to both sides: the European Union and the third country;

• Form the basis for ‘deep and comprehensive’ integration, particularly through a free trade area;

• However – the European Union tends to dominate here.

Implementation of the ENP: What does it Offer?

• ‘Traditional’ trade preferences and financial assistance

• New forms of technical assistance

• Gradual participation in our Agencies and programmes in fields such as education, training and youth, research, environment, culture, audio-visual policy etc…

• The European Neighbourhood and Partnership Instrument

• Cross-border cooperation along the EU’s land and maritime borders

• Long-term goal of a Neighbourhood economic community

• Assistance in implementing political, economic and social reform agendas

Implementation of the Policy:How does it Work?

• Building upon and strengthening existing relations

• Using relevant EU experience in how to support transition and sequence reforms e.g. “twinning” officials …

• Gradual approximation with the acquis communautaire in relevant areas

• Socialisation, “soft power”, long-haul policy

Implementation: What are the Instruments?

• Policy dialogue in Sub-Committees, Cooperation and Association Committees, working

groups, informal meetings

• Ad hoc technical meetings (for example: Georgian Labour Code)

• Selective use of experience from supporting reform in candidate and pre-candidate

countries, Twinning (Member State officials work in counterpart ministries and agencies) and

TAIEX seminars (sharing best practices)

• Border assistance missions: EUBAM Ukraine/Moldova, Rafah

• Technical assistance (contracted consultants) under ENPI-funded national programming

• A general approach to participation in EC agencies and programmes

• Community guidelines, manuals (e.g. customs blueprints etc.

Development of the Policy2003• “Wider Europe” Communication – thinking “beyond” 2004 enlargement2004• Commission Strategy Paper “European Neighbourhood Policy” adopted by European Council• ENP Country Reports on first 7 partners

2005• Adoption and beginning of implementation of first 7 ENP Action Plans• ENP Country Reports on next 5 countries

2006• Adoption next 3 ENP Action Plans• First Progress Report and Commission proposals on “Strengthening the ENP”

2007• 2 additional ENP APs, ENP Conference Sep. 2007 December 2007 Commission Communication ‘A Strong ENP’2008• April 2008 Commission Communication and Progress Reports• French Presidency – Union for the Mediterranean• Joint Polish and Swedish initiative for an Eastern Partnership

Member State and Partners’ Views of ENP

• Why important?• EU foreign policy area remains to a large extent the

preserve of the Member States• In particular, the large Member States: Germany,

France, UK + to an extent Italy, Spain and Poland• Partners views matter since they are the target of ENP!• Take case study of relations with the east and consider

Old Member States (OMS) and New Member States (NMS)

Member States’ Views of ENP

Old Member States’ Views

• Amongst ‘old member states’ geography (and trade) and history play major role:

– No real interest in the East from Spain, Portugal, Ireland, Italy (except banking sector) Belgium (geography), France (until recently)

– Stronger interest from Germany and Austria (geography), but Germany’s strategic partnership with Russia influences attitude to Eastern Europe (history??)

– Strong interest from Nordics and esp. Sweden (history and geography)– UK, NL – neither but other policy considerations

• Look at 3 OMS, Germany, France and UK

The Shadow of Russia• Russia wants strategic partnership with EU and not ENP

and wants to reassert its power in its neighbourhood• Russia has crucial energy grip on several old member

states (Germany, Austria, Italy) and will use this to influence their policy towards eastern Europe

• Russia did not like EU enlargement and positively hates NATO enlargement

• Russia’s new assertive behaviour externally (and authoritarian policy internally) aimed at splitting EU

Germany and Russia

• Germany has long history of close but difficult relationship with Russia

• Relations with SPD particularly strong – Nord-Stream pipeline, Schröder’s job, Putin’s German. CDU leadership more critical but still susceptible to pressure – NATO enlargement!

• It is highly dependent on Russian gas - 42% of imports and oil - 34% of imports

Germany and Eastern Europe

• Website of Auswärtiges Amt lists 8 regional priorities including the western Balkans and Russia but does not mention Eastern Europe

• Although a major donor to Ukraine it does not consider policy towards Ukraine, Belarus and Moldova as a priority area

• No feeling of real neighbourhood and obligation as there was with Poland

• Policy strongly influenced by Russia

Germany and ENP• Germany has been very supportive of ENP• It aimed to develop ENP during its Presidency

especially with regard to Eastern Europe-blocked by Club Med: produced Black Sea Synergy but largely ineffective

• Essential ally of Commission in development of ENP

• Worries about migration and labour movement

Germany and Enlargement

• Germany very worried about future enlargement (esp. Turkey) and not in favour of offering an opening to Ukraine– Though it pushed last enlargement hard, very

conservative in opening EU to further countries (except Croatia) – still not opened its labour market to citizens of NMS!

– Most concerned about impact of enlargement on further integration

France and Eastern Europe

• France has still some reticence about opening to Eastern Europe because of perceived growing influence of Germany

• Always has the Med countries as a priority and seeks a balance between the two regions in favour of Med.

• Relations with Russia is an important constraint though less obvious than with Germany

• Since change of President and with perspective of French Presidency, some more balanced attitude towards E.E.

• Rising FDI in Ukraine – banking and food and drink

France and ENP

• France was an enthusiastic supporter of the Barcelona Process and insisted in Med countries being part of ENP

• Did not intend to make ENP a priority of its Presidency though it made a show with Ukraine summit

• But opening to central and eastern Europe: Sarkozy ‘partnerships’ with new Member States

• To extent French Presidency was overtaken by events

in Georgia

France and Enlargement

• France remains very sceptical about further enlargement esp. Turkey: fight over constitutional amendment

• France insisted on taking account of EU’s capacity to accept new members – ‘absorption capacity’

• Certainly against any mention of it in Ukraine agreement

UK and Eastern Europe

• UK has always been favourable to the EU’s opening to central and eastern Europe

• There is no hang-up with Russia and Russia does not significantly influence British policy

• UK was a major donor to Ukraine until recently and has strongly supported its integration into the EU

• Policy driven by desire for opening EU to encompass whole continent: less concerned with diluting EU integration

UK and ENP

• UK claims to some extent to be originator of ENP• Keenly supportive of its development• Keen on Deep Free Trade Area agreement as

contributor to liberalising trade• Relatively relaxed on migration issues until

recently• Probably would have budgetary worries about

enlargement to large countries

UK and enlargement

• UK has always been keen on accession of new democracies in central and eastern Europe

• Certainly supports giving Ukraine an ‘enlargement perspective’

• However its reasons are suspect for the other Member States and therefore the UK is not of great use as a supporter of aspiring members

Conclusion

• On balance old MS will support the development of ENP, including giving countries a ‘share in the internal market’ but will not support accession today

• Future might be different if Eastern Europe develops well and adopts acquis + EU values

• Lack of accession perspective removes a useful external anchor for reform but progress depends on good implementation of new enhanced agreement

• EU would be happy to include Belarus in developments if change in regime.

What about Lisbon Treaty rejection?

• Lisbon Treaty rejection may throw EU into panic and put the neighbourhood on hold

• Nice Treaty requires changes to allow enlargement reforms to take place

• However the EU has been working smoothly and may continue to do so without Lisbon

New Member States

• Differences in focus between new Member States

• Focus on Poland, and to an extent, Lithuania

• Headline policy goals• National and bi-lateral initiatives• Influence on the EU agenda

The New Member States and the Eastern Neighbours: An Overview

• Distinguish to an extent between ‘northern’ NMS and ‘southern’ NMS

• Poland and Lithuania most vocal proponents of Ukrainian accession to the EU; Estonia and Latvia also in favour but less visibly so; same true of Czech Republic and Slovakia

• Hungary, Slovenia and Bulgaria focus on Western Balkans

• Romania and Moldova – citizenship question is key; potentially millions of Moldovans have right to Romanian and therefore EU citizenship

Why Poland (and Lithuania)?

• Poland is a large MS and aspires to regional leadership as well as influence in Brussels

• But for Lithuania there are advantages in being small

Headline Policy Goals

• Eventual Ukrainian accession to EU• Democratization of Belarus in long-term;

support for human rights in short-term• Moral support for Georgia• Pragmatic relationship with Russia ‘cold

and calculated’

National and Bi-lateral Initiatives: Poland and Lithuania

• Significant growth in Polish aid budget to Ukraine is envisaged between 2008 (0.12% GDP) and 2015 (0.33% GDP)

• Scholarships for Ukrainian and Belarusian students (1663 and 1227 in 2005–06) to study in Poland

• Polish-Ukrainian College in Lublin• Euro 2012 Football championships• Belsat TV; questionable value?• Belarusian university in exile in Vilnius

Karta Polaka

• Identity card providing certain rights to CIS citizens who can prove that they in some way belong to the ‘Polish nation’- Visa free travel to Poland- Right to establish a business in Poland- Free education in Poland- Free health care in Poland- Discounts on public transport and free museum entry

• Generous criteria: two great-grandparents or one grandparent of Polish nationality

• Millions of eligible applicants, mainly in Belarus and Western Ukraine• Schengen question; experience of Ukrainians travelling on to Czech

Republic• Will this force EU to make visa concessions for all Belarusians and

Ukrainians?

Influence on the EU Agenda

• Until now, not much positive Polish influence on setting policy towards the eastern neighbours

• Veto of talks with Russia on PCA replacement• First few years of membership were were more about

learning the ropes• However, the civil service in general and foreign service in

particular remains weak and is likely to get worse before it gets better

• Alliance-building in Poland complicated during period of centre-right coalition 2005–07

• 2008 new joint initiative with Sweden: Eastern Partnership

Partners’ Views

• Difference between Eastern and Southern partners in outlook

• However, all share disappointment at being lumped together under the same policy umbrella, compare Moroccan and Ukrainian perspective!

• ENP is not popular in the East, especially in Ukraine• Eastern Europeans dislike being viewed as ‘second class’

Europeans• Great disappointment that membership is presently excluded

(except under article 49)• Southern members (except Israel) do not seek membership

Concluding Arguments

• ENP is about security for the European Union• It is driven by the European Union side in inevitably one-sided

negotiations• Lack of membership perspective makes conditionality much weaker

than it was for the 2004 accession countries• However, conditionality does not appear to be working very effectively

in the former Yugoslavia• However the benefits for the ENP countries are potentially vast• The policy has developed considerably over the first few years of its

existence• Divisions in viewpoints between Member States makes it hard for

the EU to speak ‘with one voice’ on ENP (and on relations with Russia)