For more than four years, ever since the Eastern Partnership summit in Vilnius in 2013 and the escalation of the Ukraine crisis, Russia and the European Union have been in a state of confrontation over their common neighborhood. However, as 2018 begins, there are some modest signs of improved rapprochement, if not yet agreement.

In 2017, the EU tried to revitalize relations with Armenia and Belarus, while still recognizing their membership in the Eurasian Economic Union (EEU). Belarusian President Alexander Lukashenko was even invited for the first time to the Eastern Partnership summit—although he did not attend.

The EU’s initiative toward Minsk is the continuation of a policy first outlined in 2016, when most sanctions were lifted from the country previously called “the last dictatorship in Europe.” Brussels now is not so much focused on the democratization of Belarus, but on preventing its economic and political destabilization.

In December 2017, the EU also managed to devise a new agreement on a “Comprehensive and Enhanced Partnership” with Armenia that does not touch on trade issues but aims to strengthen cooperation in areas such as public sector reform, the energy market, combating illegal migration, and the education sector.

The Armenia-EU agreement has been praised—even in a European Parliament resolution on the Eastern Partnership—as a positive example of a nation being part of both the EEU and the Eastern Partnership. It would have been hard to imagine this formulation being written in an official European document even a year ago. The outgoing chancellor of Austria, Christian Kern, made a telling remark, saying, “I think that we made these conclusions after the events in Ukraine.”

For its part, the Russian government reacted calmly to the signing of the Armenia-EU agreement. Tatyana Valovaya, the EEU Commission’s minister for integration and macroeconomics, said that there were no contradictions between Armenia’s commitments to the EEU and its agreement with the EU, and even welcomed the new agreement.

Russia is signaling policy shifts in other areas of the shared neighborhood with the EU. Moscow drafted a resolution for deploying UN peacekeepers to the Donbas in all the areas in which the OSCE special monitoring mission operates. The Russian and Ukrainian governments also agreed on an exchange of prisoners at a meeting of their foreign ministers—their first in several years—which duly took place on December 27.

Russia and the EU also worked together in 2017 on the Transdniestria conflict. With the backing of the OSCE, Russia, the EU, and the United States, in November Chișinău and Tiraspol were able to agree on a package of practical solutions to several long-standing issues. Moscow helped support these negotiations and insisted in particular on developing mechanisms for implementing decisions in the domestic legislation of the parties to the conflict.

Moscow also chose not to overly politicize the issue of the establishment of Moldovan-Ukrainian customs checkpoints on the Transdniestrian segment of their border, and also accepted Transdniestria’s de facto accession to the Deep and Comprehensive Free Trade Area between Moldova and the EU.

Is there a connection between all these modest but positive trends? Evidently, both Russia and the EU are not yet ready to halt their ongoing confrontation, but are gradually beginning to feel the costs and risks associated with continuing antagonism in their common neighborhood. What lies behind this?

First of all, the most dangerous scenario for both Russia and the EU comes with an exacerbation of the military conflict in eastern Ukraine. This could lead to calls for more sanctions on Moscow, which would have a negative impact on the EU’s energy security. It could also lead to the direct intervention of Moscow in the conflict and the possibility of the United States starting to supply lethal weapons to Kiev, with unpredictable consequences.

Secondly, both the EU and Russia have evidently recognized that they are unable to fully realize the ambitions they had in this region. Ukraine, Moldova, and Georgia have no immediate prospects of joining the EU—and have seen their politicians discredit the idea of European integration for much of the public. But Moscow cannot fail to see that they still seek closer ties with the EU and will reject Moscow’s formulas for resolving their conflicts. And Moscow also worries about the growing financial costs of maintaining the status quo in these conflicts.

It is also becoming obvious to the EU that its key partners in the Eastern Partnership—Moldova, Ukraine, and Georgia—cannot implement all of the planned reforms that would bring them closer to the EU because of their continued institutional immaturity and the domination of oligarchic interests. A pivotal moment in this regard was the announcement by Brussels on December 1 that it was withholding a third tranche of 600 million euros in macrofinancial assistance to Ukraine because of lack of progress on reforms.

Third and last, the ongoing confrontation between the EU and Russia inevitably means missed economic opportunities. For example, the realization of the North-South transport corridor project passing through Armenia, linking Russia not only to Yerevan but also to Iran, is currently impossible because the railway link to the South Caucasus through Abkhazia is still closed.

All of these factors are pushing Moscow and Brussels to gradually see the need for negotiation. Technical consultations have started between the Eurasian Economic Commission and the European Commission, although so far, they only concern the issue of European business working in the EEU. Valovaya and Johannes Hahn, the EU Commissioner for enlargement and neighborhood policy, recently spoke together at an event in Vienna. Although they did not agree, their joint appearance was an event in itself. There is also now more frequent contact at the expert-community level.

Having said that, the conditions are not in place for Russia and the EU to resume comprehensive dialogue. Even a pragmatic politician such as Jean-Claude Juncker—who tried in 2015 to launch a dialogue—is not yet ready to try again. Moscow has not worked out a strategy for normalizing relations with the EU and continues to work against Brussels on the principles of trench warfare. The ruling elites in the key states of the Eastern Partnership are also not keen to see dialogue, as the current geopolitical agenda is fundamental to their domestic legitimacy.

For those reasons a “grand bargain” is hardly possible at the moment, and there will be no easing of sanctions or trade embargoes in the near future. At issue is the more modest goal of creating mechanisms to halt the further deterioration of EU-Russia relations in their shared neighborhood, and solving a few issues of mutual interest.

In the economic sphere, the key cooperative projects may be securing transit of Russian gas via Ukrainian territory after 2018. Russia is unlikely to be able to completely abandon the route, which is important for the state budget of Ukraine. The EU is also interested in preserving this transit arrangement, because several companies, supported by the European Commission, have already proposed to Kiev that it establish an independent operator which would buy gas from Russia’s Gazprom not on Ukraine’s western border but on its eastern one.

When it comes to the conflict in eastern Ukraine, there is little prospect of a rapprochement. The immediate need is to stabilize the situation. There has been skepticism about Russia’s peacekeeping proposal. If the peacekeepers were deployed in some form, that would only freeze the conflict in the Donbas, but it would at least make the situation more predictable. Brussels and Moscow are currently more interested in halting the conflict than in long-term partnership. But that is at least a start.

About the Author

Andrey Devyatkov is a senior expert of Foreign Policy and Security Program at the Center for Strategic Research.

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