Summary of the breakout conversation “Russia Reset and Completing Europe Whole and Free: Can we do both at the same time?” at the 2010 Annual Members’ Conference.
Participants:
Michael Calvey, Founder and Co-Managing Partner, Baring Vostok Capital Partners
Adrian Karatnycky, Former President, Freedom House; Nonresident Senior Fellow, Atlantic Council
Eugene Rumer, National Intelligence Officer for Russia and Eurasia, National Intelligence Council
Maciej Witucki, Chief Executive, Polish Telecom
Moderated by Frances Burwell, Vice President and Director, Transatlantic Relations Program, Atlantic Council
Summary:
Can the Obama administration walk and chew gum at the same time? This discussion focused on U.S. efforts to balance the Russia reset with other policy priorities in Europe’s east. What are the motivations behind the Russia reset? How is the reset viewed by U.S. allies in Central and Eastern Europe? Does the reset take precedence over completing Europe whole and free? How can the United States move forward with Russia on strategic interests, without compromising values-driven alliances in the region?
Panelists identified a number of reasons for Russia’s willingness to reset relations with the West. Key among those is Russia’s economic vulnerability. Although Russia showed arrogance on the world stage in 2007 and 2008, the country stumbled back when hit by the global economic crisis. The Russian economy was more exposed to the global crisis than other emerging markets due to the weakness of its banking sector and its over-reliance on commodity prices. After the hit, Russian elites are increasingly aware of the need to focus on modernization and foreign direct investment. Russia also has long-term trends that will endanger the country’s future economic viability. Demographic trends suggest Russia’s economic growth will be capped at around 5-7% in future years. As a result, Russians can no longer depend on a resource-driven approach to economic growth and foreign policy to ensure domestic political stability. Recognition of this economic vulnerability, along with acknowledgement that an aggressive foreign policy has economic consequences has strengthened the Russian leadership’s receptiveness to a reset. While Russia seems willing to cooperate with the West on strategic interests, it still sees the relationship with the West as a balance of power. It also remains to be seen whether Russia’s modernization will lead to a more open or a more assertive Russia.
While the benefits of the Russia reset remain to be seen, the policy has already impacted relations between the United States and allies in Central and Eastern Europe. One panelist warned that the reset presented a dangerous precedent that might encourage greater ad-hoc partnerships over values-driven alliances, thus undermining a multilateral approach through institutions such as NATO. In response to the U.S. reset, other countries in Central Europe have started their own local resets with Russia, which could set a trend toward greater disaggregation within the alliance. This lack of unity within the alliance could also dampen efforts to integrate the Western Balkans and Europe East into Euro-Atlantic institutions.
On the other hand, the reset does present some opportunities. One panelist found that the Russia reset could provide stability in Europe, allowing the European Union to focus on internal problems and bolster its own institutions. A stronger EU would then be more capable of promoting a Europe whole and free. One panelist argued that the reset gives breathing room to countries in the region that would prefer to not have to choose between good relations with the West or with Russia. Despite Russian actions and incursions in its neighborhood, Russia has in many ways actually failed to assert itself as a regional hegemon, particularly in Central Asia where there is a heavy Chinese footprint. This leaves room for the United States to strategically engage Central Asia and encourage greater democratization and closer ties between these countries and the Euro-Atlantic community.
Since the West cannot predict how open or stable Russia will become as a result of the reset, panelists concluded that the United States and Europe should maintain a healthy dose of Realpolitik in dealing with Russia. Key to these efforts will be ensuring that efforts to sustain democratization and Euro-Atlantic integration in Europe’s east remain robust, in spite of and perhaps in complement with improved relations with Russia.
-Summary by Cynthia Romero, Assistant Director, Program on Transatlantic Relations
This session was held under Atlantic Council Rules, defined by President and CEO Frederick Kempe as “Chatham House Rules with military enforcement.”