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MOSCOW, May 22 (RIA Novosti)


Russia, EU lack mutual understanding / Europe depends more on China, less on Russia / Poland set to take part in big-time U.S.-Russian game / Russia, China may move to settlements in national currencies

Vedomosti, Vremya Novostei

Russia, EU lack mutual understanding

Like old neighbors, Russia and Europe are fully aware of their interdependence, but totally unable to work out acceptable rules of coexistence. The consultations they hold twice a year have proved ineffective, only registering the ever increasing number of mutual grudges.

Everyone feels the weight of old problems bearing down on them, but no one seems to have any idea how to break free. However, there is nowhere to go to get away from each other.

The key issues put up for long and futile discussions at the planned summit in Khabarovsk are the financial meltdown, a new energy agreement and a new European security system.

No productive exchange of anti-crisis ideas should be expected, because every country has the same negative experience and doubtful achievements. And stimulus and bailout policies have already been discussed at the recent G20 meeting.

The Moscow-proposed new architecture of European security is too general to discuss in detail, so this discussion is likely to boil down to going on about the Russian-Georgian conflict, on which Russia and Europe hold opposite positions.

The Eastern Partnership program is seen by Moscow as Europe's political expansion into Russia's traditional zone of influence. This discussion is unlikely to produce anything but more diplomatic blame answered by equally diplomatic rebukes.

Analysts believe that Russia is doing its utmost to show to European guests how it is shifting the emphasis of its foreign policy. The choice of the site for the summit is one sign - it will be held in Russia's Far East, right on the Chinese border.

The neighbors fail to find common ground on energy cooperation as well. Russia's main player, Gazprom, genuinely wishes to supply to European consumers as much natural gas as they want - but for a monopoly price it sets. Europe is just as willing to buy from Gazprom - for a competitive market price.

So how to make Russian-European summits more effective? It might be a good idea to change the format of consultations. Sometimes, when two parties fail to agree on a general problem, it helps to begin with smaller issues. At least this way they could remove some of the mutual grudges.


Europe depends more on China, less on Russia

The EU-Russia and EU-China summits, which have almost coincided, make one think about the fundamentals of Europe's relations with Russia and China, writes a Russian analyst.

Alexander Lukin, director of the East Asia and SCO Research Center at the Moscow-based Institute of International Relations (MGIMO), said that China was viewed in Europe as a distant country that does not claim to share European values.

Unlike China, the Russian government and Russians have always said they are a part of Europe, but have never wanted to live as Europeans do. These stereotypes are now affecting the country's policy.

Europe is concerned over human rights in China, but is prepared to admit that Chinese society differs from European society. At the same time, it is criticizing Russia, which claims to be a part of Europe, for lesser deviations from European standards, Lukin said.

China has recently become a major challenge to the European Union's trade policy. It is the EU's second largest trade partner and the largest exporter of goods to Europe. The EU's trade with China is huge, which makes Europe forget about human rights in China or the Tibetan problem.

Mutual dependence between Russia and the EU is not so balanced. The EU is Russia's main trade partner and investor. However, Russia is only 11th largest trade partner for the EU and the seventh largest exporter to it. This is why the EU feels confident that it can get rid of its dependence on some Russian goods, such as natural gas.

According to the analyst, Russia is exaggerating when it says that Europe depends on it. In fact, Europe is becoming increasingly dependent on China, while its dependence on Russia is shrinking. This is an objective result of the development of Russia and China in recent decades.

In this situation, the use of some goods as instruments of pressure can only strengthen Europe's desire to get rid of Russia's influence, the analyst said.

Russia should develop its cooperation with Europe not on commodity dependence but on common values, as it has more values in common with Europe than China.

Russian-European rapprochement could also be promoted by the growth of China's global influence and deliberations about a future in which the United States and China rule the world.

In such a world, Russia and the EU have to become allies, Lukin said.

RBC Daily

Poland set to take part in big-time U.S.-Russian game

Poland's Deputy Defense Minister Stanislaw Komorowski said U.S. Patriot surface-to-air missile (SAM) systems would be deployed in the country by late 2009. Russian analysts say Washington now has different military priorities, while Warsaw is merely blackmailing its U.S. ally.

Poland has never concealed the fact that the deployment of U.S. missiles on its territory is directed against Russia, rather than countering a hypothetical Iranian or North Korean threat.

Komorowski said the U.S. military presence in Poland would help Warsaw to resolve many issues, including the lack of energy resources if Russia once again decided to stop gas deliveries to Europe.

He said the Patriot SAMs would be deployed in Poland regardless of elements of the U.S. National Missile Defense (NMD) system.

Alexander Khramchikhin, an analyst with the Institute for Political and Military Analysis, said the United States now had different military priorities primarily linked with Afghanistan and uninterrupted transits to that country via Russia, and that today it was not in Washington's interests to irritate Moscow.

Khramchikhin said the upcoming deployment of Patriot missiles in Poland was either wishful thinking on the part of Warsaw, or that Poland was merely blackmailing its U.S. ally, forcing it into a situation where it would be unable to cancel the missile project without losing face.


Russia, China may move to settlements in national currencies

Russia and China are discussing converting to national currencies in bilateral trade. Russian President Dmitry Medvedev said in Khabarovsk, Russia's Far East, on Thursday that they thought the Chinese initiative "interesting."

Analysts share his opinion.

Before that, Russia's plans for moving to settlements in national currencies involved only the Commonwealth of Independent States (CIS). But China signed agreements on using national currencies in bilateral trade with six countries, including Argentina, on December 12, 2008.

The Chinese authorities allowed export companies from Shanghai and another four southern cities to trade in yuan. They think half of China's export trade will be conducted in yuan by the time the experiment is spread to the rest of the country next year.

Analysts say Russia and China could easily convert to settlements in national currencies in bilateral trade.

Chinese goods will be sold for yuan and Russian for rubles, said Vladimir Kolotov, head of the Far Eastern history department at the Oriental School of St. Petersburg State University.

Mikhail Khazin, president of Neokon Consulting, said Russia should follow the example of China and issue large ruble-denominated loans to the buyers of its oil, and at the same time stop selling commodities for U.S. dollars.

However, this is possible only with a strong ruble and a clear economic policy, Khazin added.

China could be encouraged to contribute to infrastructure projects in Russia, with Russia's Far East becoming an intermediary in trade between Southeast Asia and the European Union.

"If these cargo routes pass across Russia, they will become a life line for depressed regions," Kolotov said.

Analysts cannot agree on which spheres of cooperation with Russia would interest China more.

Polina Kuznetsova, an analyst at Unison Capital, said China wants reliable energy supplies, while Khazin said it would invest exclusively in Russia's commodities sector.

"China is mostly interested in investing in military and space technology and agriculture," argued Kolotov.

RIA Novosti is not responsible for the content of outside sources.

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