Triangular Geopolitics in Europe’s Eastern Neighbourhood. CEPS Commentary, 2 December 2014

Over the last few months, Russia has employed a number of economic and security measures to derail the Deep and Comprehensive Free Trade Agreement (DCFTA) between the EU and Ukraine. Russia’s opposition to the Agreement was based on the argument that it would damage its economy and weaken its trade ties with Ukraine. Russia’s actions ultimately led to war in Ukraine, but did not succeed in reversing Ukraine’s EU integration policies; instead there are now trilateral negotiations between the EU, Ukraine and Russia on mere technical trade aspects of the DCFTA. The Kremlin is using similar rhetoric and, to some extent, similar coercive measures against the DCFTAs with Moldova and Georgia. But the small scale of Moldovan and Georgian trade with Russia is not a legitimate reason for the EU to replicate the Ukraine ‘trialogue’ on the DCFTAs in these countries. Instead, Moldova’s heavy dependence on Russia’s energy and the former’s transit role for the EU offers a greater possibility to set up trilateral negotiations, similar to the recently finalised gas trialogue between the EU, Ukraine and Russia.

How far do the borders of the west extend? Russian/Polish strategic conflicts in the period 1990-2010. OSW Report, 2010-03-18

From a historical perspective, the last two decades can almost be regarded as a 'golden age' of Polish-Russian relations. This is the first time in several centuries that a sovereign Poland and Russia have been able to develop mutual relations without resorting to force; moreover, they have established a bilateral legal basis and put into practice its provisions on "the inviolability of borders, territorial integrity, non-interference with internal affairs and the nations' right to self-determination. This does not change the fact that since 1990 the atmosphere between the two countries has much more often been chilly and tense. Contrary to the widely-held belief, Polish-Russian conflicts do not stem from genetic Russophobia on the part of Poland, or irrational prejudice on the part of Russia. Their substance is real and concerns strategic issues. At the deepest level, though, this is a dispute about how far the borders of the Western world extend, and about the Russian Federation's sphere of influence. However, it is not a clash between two states; moreover, Poland is certainly not the most important actor in this regard, although due to the historical context and its geographic location, it is one of the countries that lies closest to the 'line of contact', and is therefore particularly entangled in the disagreement.

Rok Putina. Obwod kaliningradzki w kontekscie rozszerzenia Unii Europejskiej. Prace OSW 2/2001. = Putin's Year. The Kaliningrad Oblast in the context of EU enlargement. OSW Study 2/2001

Last year Kaliningrad became the subject of an international debate involving first of all the European Union, Russia, the USA, and the countries bordering the enclave, Poland and Lithuania. Such keen interest in a small region of less than a million inhabitants was mainly due to the fact that Kaliningrad has found itself in the very centre of two processes which are of paramount importance for Europe: EU and NATO enlargement. If Lithuania becomes a member of those units and Poland joins the EU, this Russian enclave will become an island surrounded on all land borders by a totally different, political, economic and military entity. In the course of the debate many questions were raised about the situation in the Oblast and how it affects neighbouring countries, the real interests and intentions of the parties involved in the debate, and the future of the region. The authors of this publication are attempting to answer these questions. The first part of this analysis is devoted to presenting the most important internal problems of the enclave, considering their influence on the surrounding world and the consequences of adopting the acquis communautaire in Poland and Lithuania. The second part characterises Moscow's policies towards Kaliningrad on the one hand, and those of Western countries on the other. Finally, the authors discuss the probable ways in which the situation in the enclave will develop.

Rosyjski rewizjonizm wobec zachodu. Prace OSW 33/2009. = Russia's revisionist policy towards the west. OSW Study 33/2009

Russia’s actions so far have led to a kind of deadlock. Moscow has managed to stop NATO enlargement into the CIS area, persuade the USA not to deploy the missile shield in Poland and the Czech Republic, and avoid major consequences after the war with Georgia; nevertheless, the full implementation of its objectives remains unlikely.

Gazprom’s expansion in the EU: co-operation or domination? OSW Report, October 2009. Second edition, revised

Introduction. The energy sector, especially with regard to the gas trade, is one of the key areas of co-operation between the EU and Russia. However, the form this co-operation has taken has been giving rise to some concern, both in Brussels and in the EU member states. Questions arise as to whether the EU has not become excessively dependent on Russia for energy, and whether the presence of the Russian gas monopoly in the EU does not enable Russian interference with the development of EU energy policy. The objective of this series of OSW reports (for the previous edition,see Gazprom’s expansion in the EU: co-operation or domination? April 2008 – pdf 1.2 MB) is to provide facts which will permit an accurat answer to these questions to be formulated. Over the course of last year, two new factors strongly affected Gazprom’s capability to operate on the EU market. One was the ongoing global economic crisis, which has depressed demand for gas both in Russia and in Europe. Gazprom has cut both its own production and the quantities of gas it purchases from the Central Asian states, and the decrease in export revenues has forced the company to modify some of its current investment plans. Less demand for gas and the need to reduce production are also having a positive impact – the Russian company is likely to avoid the difficulties in meeting all of its export commitments which, only a year or so ago, it was expected to experience. The other factor affecting Gazprom’s expansion in Europe is the observed radicalisation of the rhetoric and actions of both the company itself and of the Russian authorities with regard to the gas sector as broadly understood. The gas crisis between Russia and Ukraine in January 2009, which resulted in a two-week interruption of gas supplies from Russia to Europe via Ukraine, was the most prominent example of this radicalisation. The hardening of rhetoric in the ongoing energy talks with the EU and other actors, and increased political and business activities designed to promote Russian gas interests in Europe, in particular the lobbying for the Nord Stream and South Stream projects, are further signs of this shift in tone. These issues raise the question of whether, and to what extent, the current condition of Gazprom’s finance will permit the company to implement the infrastructural projects it has been endorsing and its other investment plans in Europe. Another important question is whether the currently observed changes in how Gazprom operates will take on a more permanent character, and what consequences this will have for the European Union. The first part of this report discusses Gazprom’s production and export potential. The second comprehensively presents the scope and nature of Gazprom’s economic presence in the EU member states. Finally, the third part presents the Russian company’s methods of operation on foreign markets. The data presented in the report come mainly from the statistics of the International Energy Agency, the European Commission and Gazprom, as well as the Central Bank of Russia and the Russian Statistical Office. The figures presented here also include proprietary calculations by the OSW based on figures disclosed by energy companies and reports by professional press and news agencies.

The EU Strategy for the Baltic Sea Region from Germany’s perspective. OSW Commentary No. 69, 2011-01-10

Germany is one of the eight EU member states which participate in the EU Strategy for the Baltic Sea Region along with Denmark, Estonia, Finland, Latvia, Lithuania, Poland and Sweden. Germany had a positive approach to the EUSBSR strategy (see Appendix 1) right from planning stage. This project contributed to the continuation of Germany’s co-operation with the countries in this region, which has been conducted since the mid 1980s mainly by German federal states. Germany is playing a major role as part of this strategy because it is the coordinator of its three priority areas.However, the German federal government sees the EUSBSR as a project to be implemented at the level of federal states. This has been proven by the great activity of three German federal states participating in the strategy (Hamburg, Mecklenburg-Vorpommern and Schleswig-Holstein) and at the same time the low level of engagement from the Bundestag, the federal government and expert circles. Furthermore, federal states more often formulate evaluations of the effects of co-operation achieved so far as part of the EUSBSR. Still, the relatively low level of Berlin’s engagement does not mean that it is not interested in co-operation in the Baltic region as such. Germany actively participates in the work of such bodies as the Council of the Baltic Sea States or the Baltic Marine Environment Protection Commission (HELCOM). All German entities engaged in the strategy make its future attractiveness and the success of individual projects as part of it dependent on including Russia in the EUSBSR. As long as Germany has the opportunity of regional co-operation with Russia at other forums (for example, the Council of the Baltic Sea States), it is unlikely to become more engaged in developing the strategy and enhancing co-operation as part of this project.

Agricultural Credit Market Institutions: A Comparison of Selected European Countries. Factor Markets Working Paper No. 33, January 2013

This paper describes and compares the institutional framework of the agricultural credit markets in selected European countries. The institutions can be both formal (rules, regulations, authorities and actors) and informal (norms, values and relations). They also interact and in situations where the formal institutions are weak, the informal ones increase in importance. The study is based on a questionnaire sent to agricultural financial experts in selected countries. The case studies show that credit regulations are typically general, with no specific regulations for the agricultural credit market. On the other hand, several countries support agricultural credit in various forms, implying that the governments do not perceive the general credit market to function in the case of agricultural firms. In a risk assessment, the most frequent reasons for rejecting a loan application are all linked to economic performance and the situation of the farmer. Personal characteristics, such as educational level or lack of experience, were generally perceived as less influential. Another interesting point when it comes to risk assessment is that in some countries the importance of asset-based lending compared with cash flow-based lending seems to differ when concerning a first-time applicant and when there is an application to extend a loan. To get an idea of the availability of credit, the loan-to-value (LTV) ratio was calculated, and it showed remarkably low values for Poland and Slovakia. For all the countries, the calculated value was lower than what the financial experts would have expected. This might imply credit rationing in agriculture in some of the countries studied. The financial experts all judged the possibility of an agricultural firm obtaining a loan as higher than that for other small rural firms, implying that the latter are also credit-rationed.

It’s not just Russia: Currency crisis in the Commonwealth of independent states. Bruegel Policy Contribution 2015/01, February 2015

The currency crisis that started in Russia and Ukraine during 2014 has spread to neighbouring countries in the Commonwealth of Independent States (CIS). The collapse of the Russian ruble, expected recession in Russia, the stronger US dollar and lower commodity prices have negatively affected the entire region, with the consequence that the European Union's entire eastern neighbourhood faces serious economic, social and political challenges because of weaker currencies, higher inflation, decreasing export revenues and labour remittances, net capital outflows and stagnating or declining GDP. •The crisis requires a proper policy response from CIS governments, the International Monetary Fund and the EU. The Russian-Ukrainian conflict in Donbass requires rapid resolution, as the first step to return Russia to the mainstream of global economic and political cooperation. Beyond that, both Russia and Ukraine need deep structural and institutional reforms. The EU should deepen economic ties with those CIS countries that are interested in a closer relationship with Europe. The IMF should provide additional assistance to those CIS countries that have become victims of a new regional contagion, while preparing for the possibility of more emerging-market crises arising from slower growth, the stronger dollar and lower commodity prices.

Greece back on centre stage: the results of a déjà vu summit. EPC Post-Summit Analysis, 23 March 2015

The March 2015 European Council might not enter history books, but the outcome of an informal ‘mini summit’ between seven EU leaders has the potential to prepare the grounds for a breakthrough in the negotiations between Athens and its lenders. In this post-summit analysis, Janis A. Emmanouilidis argues that the search for a compromise promises to be a cumbersome, time-consuming and nerveracking exercise. But a solution now seems possible, proving all those doomsayers who have been predicting a ‘Grexit’ or ‘Graccident’ wrong. On other topics, EU leaders committed their countries to build an Energy Union, although questions remain about whether member states will agree to cede sovereignty on a number of significant points. This analysis looks also at the economic issues dealt with at the Spring Summit, with a focus on the perspectives for the European Semester and the Juncker Investment Plan. It ends with a summary of decisions taken on a number of other topics, including relations with Russia and Ukraine, the upcoming Eastern Partnership summit, developments in Libya and in Tunisia, and the endorsement of the Council’s new Secretary General.

Extending Working Lives: A comparative analysis of how governments influence lifelong learning, CEPS Special Report No. 111, July 2015

This report offers a comparative policy study on adult learning within the scope of complementary research conducted by Beblavý et al. (2013) on how people upgrade their skills during their adult lifetimes. To achieve our objectives, we identified regulatory policies and financial support in 11 countries for two main categories of learning: formal higher education and employer-based training. Drawing upon the results of the country reports carried out by our partners in the MoPAct project, we found that in none of the countries examined is there an ‘older student’ policy. In most cases grants and financial support are awarded only up until a certain age. In all of the countries studied, standard undergraduate and post-graduate studies are available for part-time students. The distribution of full-time students and part-time students in tertiary education varies from one country to another as well as from one age group to another. The participation in full-time tertiary education programmes decreases with the age of students. In Lithuania, Latvia, Poland and the UK, there are no mandatory policies to ensure employer-based training. However, in Belgium, Czech Republic, Denmark, Estonia, Germany, Italy, the Netherlands and Spain, employer-based training is more clearly regulated and the employers might have obligations to provide training for their staff. Taking into consideration Beblavý et al. (2013), we observe that comparative differences across countries can be related to policy differences only in some cases. The policy framework seems to impact more the employer-based training than the educational attainment (upgrade of ISCED level). In Denmark, the Netherlands, Latvia, Lithuania, Czech Republic and Poland, we find a perfect match between policy outcomes and the results of Beblavý et al. (2013) related to employer-based training. This is not the case in the United Kingdom, where the two aspects observed are not correlated.

Brexit will deepen the fault lines within the EU over mobility. CEPS Commentary, 12 July 2016

Much has been made of the divide that opened up in 2015 between eastern and western member states as a result of acrimonious discussions on how to handle the refugee crisis and distribute asylum applicants across the EU. Against the prevailing political sentiment in certain member state capitals, Germany and France pushed through a plan devised by the European Commission to relocate 120,000 refugees, by a qualified majority vote in the Council. Rather than creating an east/west divide, however, the vote split the group of (relatively) new Central and Eastern European countries (CEECs) of the EU into two factions: Romania, Czechia, Slovakia and Hungary voted against the plan, whereas several other CEECs, namely Poland, Bulgaria and the Baltic states, joined the controversial motion on the side of the other (northern, southern and western) member states. Finland abstained. Few member states have shifted their positions in the meantime. If anything, in fact, they have coalesced among the Visegrad 4, following a change of government in Poland; and they have hardened, as a result of new proposals by the Commission to fine member states that refuse to accept refugees. With Hungary’s referendum on the Commission’s relocation scheme scheduled for October 2nd, tensions are set to intensify even further.

The Western Borderlands: The place of eastern Galicia and Volhynia in the Ukrainian State. OSW Study 43/2013

The regions of Ukraine are strongly diversified. These differences are subject to historical conditions and attempts at unification which have been made over the past seventy years have proven that these differences will be impossible to reduce in the foreseeable future and will continue to bear an impact on Ukraine’s domestic policy. Western Ukraine (Eastern Galicia and Volhynia) is a peripheral region in economic, political and cultural terms. Although it accounts for approximately 14% of Ukraine’s territory and 15% of the country’s population live there, the region generates only around 10% of the country’s GDP. Its metropolis, Lviv, Ukraine’s seventh largest city, was traditionally among the key centres in the nation’s history. However, its role in an independent Ukraine has been marginalised partly due to the fact that a significant part of its elite moved to Kyiv. This is also the most ethnically homogeneous region, where Russian speakers make up rather a small part of the population.