Europe's New Donald Rumsfeld

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State Duma elections in December are almost certain to cement the power of forces loyal to President Vladimir Putin. That outcome is likely to confirm Russia's emergence as the most divisive issue in the European Union since Donald Rumsfeld split the continent into "old" and "new" Europe. In the 1990s, EU members found it easy to agree on a common approach to Russia. They coalesced around a strategy of democratizing and westernizing a weak and indebted country.

That policy is now in tatters. Soaring oil and gas prices have made the Kremlin more powerful, less cooperative and less interested in joining the West. Today, Europeans cannot even agree on the nature of the Russian government, let alone what policy to adopt toward it.

Part of the confusion lies in Putin's skillful political positioning. On the one hand, he needs to maximize his control of the economy and society in order to raise wages and pensions and to keep opponents down, while nourishing the long tail of patronage that keeps him in power. On the other hand, Moscow's elite, who fear that their assets may be expropriated by a future government, want to avoid international pariah status so that they can see out their sunset years in the safety of the West if the need arises.

A tightly knit group of political consultants has helped Putin resolve his conundrum. Rather than establish a dictatorship, they helped Putin use the trappings of liberal democracy to consolidate power. By establishing fake opposition political parties that are under the Kremlin's thumb, creating pseudo pressure groups and organizations such as Nashi and recasting the rule of law as an instrument of political power, Putin has tightened his control in a more effective and subtle way than many autocratic regimes. The possibility that he may run for prime minister in order to prolong his rule after his presidential mandate expires is a logical continuation of this approach.

Though the EU has failed to change Russia during the Putin era, Moscow has had a big impact on the EU. On energy, it is picking off individual EU member states and signing long-term deals that undermine the core principles of the organization's common strategy. On Kosovo, Russia is blocking progress at the United Nations. In the Caucasus and Central Asia, the Kremlin has effectively shut the EU out of regions where it has an interest in promoting political reform, resolving conflicts and forging energy partnerships.

In Ukraine and Moldova, the Kremlin has worked hard -- and with some success -- to blunt the appeal of Europe. In the eyes of some neighboring countries, Russia is emerging as an ideological alternative to the EU that offers a different approach to sovereignty, power and world order. Whereas the European project is founded on the rule of law, the Kremlin believes that when the balance of power changes, the laws should be changed to reflect it.

Moreover, the Kremlin is trying to build a relationship of "asymmetric interdependence" with the EU. While EU leaders believe that peace and stability is built through interdependence, the Kremlin is intent on creating a situation in which the EU needs Russia more than Russia needs the EU, particularly in the energy sector.

Although Russia's gross domestic product is no bigger than that of Belgium and the Netherlands combined, and its military spending is a fraction of the EU's, the Kremlin has consistently managed to get the better of Europe. The central problem is that Europeans have squandered their most powerful source of leverage: unity.

Member states are divided between those that view Russia as a potential partner which can be drawn into the EU's orbit through a process of "creeping integration" and those that view Russia as a threat whose expansionism and contempt for democracy must be rolled back through a policy of "soft containment." The last few years demonstrate that neither approach will work.

The first approach risks giving Russia easy access to all the benefits of cooperation with the EU without insisting that the Kremlin abide by stable rules. Open hostility toward Moscow, however, will make it hard for the EU to draw on Russia's help to tackle a host of common problems -- from environmental pollution and illegal migration to nuclear proliferation and Kosovo's final status.

The EU urgently needs a new approach. Rather than attempt to democratize or contain Russia, Europe should settle on the more limited goal of turning Russia into a reliable partner, bound by the rule of law. A common approach will give the EU many powerful levers to ensure that Russia honors treaties and mutual agreements.

At the diplomatic level, Europeans could threaten to deprive Moscow of the prestige it draws from participating in Group of Eight and EU-Russian summits. They should also aim to strengthen democracy and the rule of law in the European neighborhood by tightening relations with countries such as Georgia and Ukraine.

Economic leverage should be applied as well. Europeans should subject Russian investments in EU markets to greater scrutiny and use competition law to begin investigations into monopolistic practices and money laundering for existing investments. At the same time, EU members could target the interests of the individuals in the Kremlin elite by scrutinizing their purchases of Western assets and even ban travel to the EU for human rights abusers.

So long as the EU continues to sway between integration and containment, it will continue to appear weak and directionless to the Kremlin. That, in turn, will merely encourage Russia to become even more assertive.

Mark Leonard is executive director and Nicu Popescu is a policy fellow at the European Council on Foreign Relations. This comment appears © Project Syndicate.