EU Ambassador Says Russia at Risk

VedomostiThe government can only maintain its credibility if it can ensure that Russia Inc. continues to function, Franco said.
Russia risks being a Third World-style raw material exporter mired in economic crisis unless it boosts democracy and the rule of law, European Union Ambassador to Russia Marc Franco said in an interview.

Franco, the outgoing head of the European Commission delegation to Russia, said that during his five years the relationship with Moscow had suffered “standstill, if not a regression” and many reforms of the 1990s had been reversed.

“My stay here coincided with the second term of President [Vladimir] Putin,” said Franco, 62. “Rightly or wrongly, I have the impression that in that period many reforms of the Yeltsin era seem to have been turned back.”

But he expressed optimism that in the long term a new generation of Russians would prevent a return to Soviet-style authoritarianism and reassert citizens’ rights — essential for the country to grow a modern, knowledge-based economy.

Asked whether it was impossible for the country to get out of economic crisis without political reform, Franco replied: “The simple reply to that would be yes. … Russia still has many characteristics of a Third World economy, exporting raw materials and importing finished products.”

“I am not sure you need fully fledged democracy to export oil, gas and nickel, but you do need it to build up a 21st-century, knowledge-based economy. That is impossible without a full realization of the rule of law.”

The EU is Russia’s biggest trade and investment partner, but flourishing business ties have not been matched in the political realm, where disputes over Russia’s alleged use of gas as a diplomatic weapon, its treatment of neighboring states and its record on human rights and democracy have soured the mood.

Asked what needed to change in Russia, Franco said it would be presumptuous to give recipes but added, “Where the problem in Russia starts is in a not-sufficiently developed and aware civil society and a lack of freedom of expression in media.”

“I do believe — no matter which country we are talking about — that you cannot have rule of law … without the basic elements of democracy, implying free elections and a vibrant civil society supported by a free press.”

Franco, a Belgian economist who has worked for the European Commission since 1978, said he felt comfortable making his observations — unusually direct for a head of mission here — because they did not contradict “what President Medvedev says.”

Medvedev has made the rule of law, the fight against corruption and the pursuit of a more open political system priorities for his presidency, although many diplomats and analysts complain that the results so far have been meager.

Aside from the reform agenda, a more urgent priority for the Kremlin is to combat a deep recession gripping Russia.

Franco said deep economic crises threaten governments anywhere but added that in Russia “the existing regime is to a large extent based on a social contract,” under which the administration guarantees prosperity in exchange for a leading role in the economy and a dominant role in society.

“The Russian government can only maintain its credibility and stability provided it can ensure that ‘Russia Incorporated’ functions or can be expected to function soon,” he said.