Berlin's Russia challenge.

• Author: Stent, Angela

RUSSIA HAS found an innovative way to ring in the New Year with its European partners: threatening to cut off energy supplies. At the beginning of 2006, it was gas exports through Ukraine; in January 2007, it was oil supplies through Belarus. Although President Lukashenko backed down and oil again flowed to Europe, the actions of pipeline monopoly Transneft--and President Putin's failure to inform Germany about the impending cutoff--presented German Chancellor Angela Merkel with an unwelcome start to Germany's EU presidency. The Russians insisted that they were only moving to world prices and a subsequent meeting in Sochi produced assurances from Russia that it would reduce its dependence on transit countries to guarantee security of supplies and admonitions from Merkel for better energy communication "in order to avoid tensions, misunderstandings and disappointments"; but tensions were still palpable.

Merkel's challenge is to persuade her European colleagues to engage the Kremlin, while minimizing potential energy disruptions from a Russia quarreling with its neighbors. On the one hand, Germany and its partners are increasingly focused on diversifying their energy imports and shifting away from Russia. On the other hand, Germany and Russia are building a new undersea pipeline that will increase Germany's dependence on Russian gas. Beyond this, older and newer members of the EU view Russia in fundamentally different ways. While Brussels and Berlin debate how to deal with their large and increasingly self-confident, energy-rich neighbor, there is no consensus within the EU about how other post-Soviet republics should factor into Russia policy. Meanwhile, the U.S.-Russian relationship has become more fractious over the past year.

The View From Brussels

EU-RUSSIAN RELATIONS remain beset by contradictions, disappointed expectations and mutual suspicions. To begin with, Europeans themselves are divided on how to approach Russia. After the fall of communism, Germany, France, the UK and Italy believed Russia would eventually integrate with Europe as it modernized--even if it did not join the EU. Poland and the Baltic states, unlike their EU counterparts, continue to believe that Russia is not a European country, Russia does not want to join the West, and Brussels should not pander to it. Indeed, Russia has become a divisive issue for the 27 EU members.

Europe pursues a largely defensive policy that aims to prevent post-Soviet problems from spilling into the EU. Europe's chief concerns with Russia focus on "soft" security issues: infectious diseases, organized crime, trafficking in drugs and people, and preventing nuclear material smuggling. Brussels has a variety of institutional mechanisms for dealing with Russia: a Partnership and Cooperation Agreement that expires at the end of this year, a Common Strategy for Russia, Road Maps for four "common spaces"--internal politics, foreign policy, economics and education and culture--and a host of other technical agreements. But there is a consensus that these mechanisms have failed to create a productive and comfortable relationship with Russia.

Despite considerable disagreement, EU members recognize that, given Europe's dependence on Russian energy (30 percent of oil imports and 44 percent of natural gas imports come from Russia, and these numbers run as high as 90 percent for the new members), it behooves Europe to engage Russia on as many issues as possible. The Ukrainian and Belarusian cutoffs have concerned Europe about Russia's use of energy as a blunt political and economic instrument--"hard soft power" as some call it. However, Russia's actions have convinced EU members not to alienate the Kremlin.

Europeans are also divided over how to balance encouraging greater transparency, political competition and democracy in Russia against the need for Russia's cooperation. The debate over "values versus interests" is most noticeable between the European Parliament, which has been highly critical of domestic developments under...