European Council Summit: Waiting or New Sanctions?

The annual end-of-year summit for the EU heads of government will take place in Brussels on December 18–19, 2014. Unlike the summits of previous years, which Russia has always seen as a purely bureaucratic event for discussing specific EU-related problems and plans for expansion, European leaders will not be able to sidestep the issue of the Ukrainian crisis and Europe’s strained relations with Moscow. The events of the past few days have shown that concessions on both sides are possible. The question is: how strong is the desire on the part of Russia and the European Union to restore dialogue on an equal footing? Doctor of Political Sciences, Head of the European Integration Research Department at the Russian Academy of Sciences Institute of Europe and Russian International Affairs Council expert Olga Potemkina offers her thoughts on the situation.

The annual end-of-year summit for the EU heads of government will take place in Brussels on December 18–19, 2014. Unlike the summits of previous years, which Russia has always seen as a purely bureaucratic event for discussing specific EU-related problems and plans for expansion, European leaders will not be able to sidestep the issue of the Ukrainian crisis and Europe’s strained relations with Moscow. The events of the past few days have shown that concessions on both sides are possible. The question is: how strong is the desire on the part of Russia and the European Union to restore dialogue on an equal footing? Doctor of Political Sciences, Head of the European Integration Research Department at the Russian Academy of Sciences Institute of Europe and Russian International Affairs Council expert Olga Potemkina offers her thoughts on the situation.

What will be the main items on the agenda?

The overarching theme and main priority of the European Council Summit on December 18–19, 2014 will be economic and social policy. Participants will discuss the necessary measures and instruments for strengthening economic growth, creating new jobs and improving the competitiveness of the EU economy. The heads of state and government will have to approve the Annual Growth Survey for 2015 and the Report on Prevention Measures. Both documents were adopted by the Commission in Brussels in November 2014. The Annual Growth Survey 2015 marks the beginning of a new six-month period for Europe in which the EU’s financial and economic policy will be coordinated towards economic recovery and jobs. A key instrument in this area is the Commission’s Investment Plan for 2015–2017, which was announced by Jean-Claude Juncker during his election campaign to become the President of the European Commission.

Olga Potemkina

At the Summit, the heads of state and government will be called upon to approve the Plan, the main thrust of which is the creation of a new European Fund for Strategic Investment (EFSI) to attract financing for strategic long-term projects (transport infrastructure, research and education, renewable energy and energy efficiency), in addition to existing European Commission programmes and the traditional activities of the European Investment Bank (EIB). The Fund will also provide support to small and medium enterprises. The EFSI is expected to commence operations in June 2015. To this end, the European Commission will produce a legislative initiative at the beginning of 2015 so that a decision on the Fund can be passed by summer. Unveiling his pet project at the November plenary session of the European Parliament, Juncker promised that the EFSI would bring in €315 billion over three years through contributions from member states, national banks and private investors. The European Commission and the EIB will front €16 billion and €5 billion, respectively, as a guarantee of the Fund’s activities.

On the eve of the Summit, Juncker’s plan was already facing criticism: while experts agree that private investments should be channelled into long-term projects that could stimulate economic growth and jobs, they are doubtful that the EFSI will attract the full €315 billion (Bulletin Quotidien Europe 11216, 12.12.2014). Just what conditions will be set for direct investments into the future Fund is a question that remains open. At the December 9 meeting of the Ecofin Council, European Commissioner for Jobs, Growth, Investment and Competitiveness Jyrki Katainen was forced to admit that so far none of the member states had come forward with concrete promises or offers. Meanwhile, Juncker went out of his way to stress that investments made by member states will not affect the assessment of their fulfilment of the Stability and Growth Pact in the Eurozone.

The discussion of further measures to combat the Ebola virus will be important item on the agenda. As of early December 2014, the European Union had invested €1.1 billion to combat the virus, making it the largest donor in the battle against Ebola. Recommendations will be made to member states to send additional medical and epidemiological staff to coordinate the actions of the agencies involved.

Another issue that is expected to be brought up at the Summit is how to prevent radicalism and extremism, especially in light of the fact that more and more Europeans are choosing to take part in military actions in the Middle East.

As for foreign policy, the Ukraine crisis will take priority. On December 3, 2014, the Commission transferred yet another financial assistance package to the tune of €500 million as part of its macro-financial support following the tranches already delivered in May, June and November of this year. However, Europe is keeping a close eye on developments in the Donetsk and Lugansk regions, and the heads of state and government will once again call for the sides to honour the terms of the ceasefire agreement signed in Minsk.

Is Europe’s stance on Russia likely to change?

Relations with Russia was not an item on the provisional agenda for the Summit. This notwithstanding, they can hardly be ignored – particularly the new “geopolitical surprise” that was Russia’s abandonment of the South Stream project and Gazprom’s change in policy in the European vector.

In accordance with Council Decision 2014/658/CFSP, restrictive measures against Russia can be reviewed on March 15, 2015. Judging from statements made by a number of European politicians, it is unlikely that new sanctions will be levied against Russian at the Summit on 18–19 December, 2014. However, on December 15 the Foreign Affairs Council supported the recommendation of the head of the European External Action Service to impose additional restrictive measures against Russia in response to the annexation of Crimea and Sebastopol. The technical side of the proposed sanctions is still under discussion.

At the present time, there are only two instances in which EU–Russia relations can change: if military action in Ukraine ceases completely (which is unlikely); or if the situation deteriorates dramatically, like it did in July following the downing of Malaysia Airlines Flight 17. The European Union is currently looking for a new conceptual basis for relations with Russia. It is possible that relations will no longer be based on the value approach. At the moment, there does not seem to be a unified vision even among the EU leaders, never mind the member states. Federica Mogherini, for example, has repeatedly talked about cutting off “partner relations” with Russia, at the same time admitting the strategic role that Russia plays in global politics. Donald Tusk, who will chair the Summit for the first time, has gone as far as calling Russia a “strategic problem”, rather than a “strategic partner”. In turn, Jean-Claude Juncker – not disputing Tusk’s words – said following his meeting with Bulgarian Prime Minister Boyko Borisov “I hope that tomorrow Russia will be again a strategic partner. Everything the Commission can do in this respect will be done” (Bulletin Quotidien Europe), 11211, 5.12.2014).

The material for this interview was prepared by Maria Gurova, RIAC Programme Director