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Russia in the United Europe

Anförande vid The International Committee

All of us here today are - in a sense - children of 1989.

That was the year in which the entire Soviet bloc - from Berlin to Vladivostok - was struck by one of the greatest liberal revolutions of all times.

A complete ideological, political, economic and social system passed away, and some 400 million people had to choose a new system at the same time as the existing system of international and European order had to be reshaped.

For all of us - children both of the Cold War and of 1989 - the task was to try to create better societies and a better European and global order in order to secure both peace and prosperity for the generations to come.

Within the collapsing Soviet bloc, there very rapidly emerged a consensus on the need to build democratic political systems and market economies based on private ownership and the rule of law - and opposition to these goals was mostly disguised in a debate on how best to reach them.

Developments since then have truly reshaped our continent in a very fundamental way.

The approximately 100 million people of the ten states that emerged from the 'outer ring' of the Soviet Empire in central and eastern Europe have all now become members of both the North Atlantic Alliance and the European Union. This was their free choice - supported and endorsed by overwhelming majorities in all the countries concerned.

And with the help of both the magnetism and the model of the European Union, they have all been reasonably successful in building both democratic societies and vibrant and dynamic open economies. They have - to use the catchphrase of the time - returned to Europe.

And it has been a successful return for everyone concerned.

As a result, we now have a belt of economic dynamism from the Gulf of Finland in the North down towards the Bosphorous in the South.

And the European Union - in itself a child of 1989 when there was still only the more limited European Community - has emerged as an entity with approximately 500 million citizens, the largest integrated economy in the world and a trading power on the global market that is larger than number two and number three taken together.

It has established a common currency which has rapidly become one of the two truly global currencies and has started to develop common foreign and security policies.

At the moment, it is in the final phases of the drafting of a Reform Treaty that from 2009 and onwards will significantly increase the possibilities for the Union to play a greater role also on the wider global stage.

It is also in the process of defining more clearly its approach to what might be called the outstanding European structural issues. On top of that agenda is the further gradual enlargement of the Union to include the approximately 100 million people of southeastern Europe - the Western Balkans as well as Turkey.

This will not happen overnight and there are also those prominent voices that fear that this will be one bridge too far. But just as we should remember that every previous wave of enlargement was the subject of considerable opposition, we should remember that each one of them was later seen as a success.

But on the agenda is also our relationship with that wider East of Europe that has some 200 million inhabitants, with Russia and Ukraine as its most important countries.

While the path taken by the 100 million people of central and eastern Europe has been relatively smooth since the great liberal revolution of 1989 - apart from the ten years of conflicts over the dissolution of Yugoslavia - the same cannot be said for developments in the wider East of Europe.

After the initial chaos of collapse, economic development has indeed been impressive. Anders Åslund recently pointed out that since 2000, the huge economic region from Kazakhstan to the Baltic has been enjoying an average growth of more than 8 percent a year. For all the economic success of Russia, it is worth noting that its performance is not among the more impressive in this wider region.

To some extent this growth has been fuelled by the commodity boom resulting from the spectacular rise of the Asian economies - oil and gas for Russia and Kazakhstan, metals for Ukraine - and there is reason to ask whether this growth is sustainable when this commodity boom starts to fade away.

This brings us to the question of the extent to which all these societies have managed to build the structures of laws, rights and administration that are more conducive to long-term increases in their prosperity. And here the picture is naturally amixed one.

In Minsk we still see an authoritarian ruler trying to resist any attempt at opening up either the economy or the society. There is little doubt that Belarus on its present course is heading for a structural collapse at some point in time, and we should all have an interest in facilitating a smooth transition that avoids more tragic outcomes.

Ukraine has been successful in building an open and democratic political system as well as in creating fairly solid foundations for sustained economic growth. With membership of the WTO around the corner, the path should be open for a deep free trade arrangement with the European Union that could well make Ukraine one of the more attractive production locations in our part of the world in coming decades.

But there are significant challenges ahead. Broadly speaking, you can say that the problem of Ukraine is that it does not have much of a state tradition, and building the institutions of a state, and the culture of laws and rights associated with a state, will accordingly take some time.

That Ukraine is on the right course in a more fundamental way is, however, clear. It has a perspective of increasingly deep cooperation and integration with the European Union that could one day even lead to membership.

It would then become a member of a Union with approximately 650 million citizens, since I see this as happening after the countries of southeastern Europe have also been included in the Union.

Russia is a somewhat more complicated case.

If I said that Ukraine suffers from having too weak a state tradition, one could argue that the problem of Russia is that it suffers from too strong a state tradition. And it might well be that it is easier to deal with the first situation than with the second - empirical evidence so far tends to point in that direction.

Now facing elections to the Duma and then election of a new President, it is up to Russia itself to judge how well it has done in relation to the potential that existed after the liberal revolution of 1989 and the new horizons that then opened up.

I certainly belong to those that saw the liberal transformation of Russia as one of the most significant developments of ourtime.

We hoped forthe emergence of the rule of law, of an open and transparent political system and of a vibrant and free economy unleashing the vast and impressive human resources of the country. Such a Russia would be a truly strong Russia as well as a Russia confident to engage and integrate with the rest of Europe and with the world at large.

As we are meeting on the day one year after the murder of Anna Politovskaya, we all know that the situation is not exactly like this.

The political system is significantly less open and transparent than it was some years ago. The rule of law can certainly not be taken for granted. And the heavy hand of state interventionism is seen in increasingly important parts of the economy.

As a result of this, we have seen a deterioration of the image of Russia in the West as well as tendencies towards new mistrust between Russia and the West across a range of different issues.

This should not be in the interest of Russia - and it is definitely not in the interest of the European Union. Accordingly, our task should be to discuss possible paths towards a situation that brings better prospects for the future in a whole range of aspects.

Later this month there will be the last Summit between Russia and the European Union under President Putin, in Mafra in Portugal. It will be a closely watched affair after the tense meeting in Samara this spring when obvious Russian attempts to divide the Union were firmly rebuffed by Chancellor Merkel.

The Summit will hardly be able to revive the attempts to start work on the envisaged new legal framework to replace the present Partnership and Cooperation Agreement. In my view, this could well wait until the dust has settled after the different Russian elections and there is the possibility to take a somewhat longer view.

The Summit will give important indications as to whether Russia truly wants to move towards the membership of the WTO that it has sought for many years, or whether those forces inside the country arguing for a more closed approach on these issues have gained the upper hand.

The importance of this issue is obvious.

If Russia aspires to be more than just an exporter of commodities, membership of the WTO is almost a prerequisite. With China having reinforced its economic success after having joined the WTO, and with Ukraine certain to join very soon, it would be odd indeed for Russia to remain outside for very much longer. It would be a signal of a different Russia.

It might well be that the Summit will also see further discussions on those issues related to energy that have been at the centre of the debates ever since the rather dramatic cut-off of Gazprom gas supplies to Ukraine in 2006.

With some 6 per cent of the world's proven oil reserves and approximately 27 per cent of the world's proven gas reserves, it is obvious that Russia will be a major player on the European and global energy markets for decades to come. And there should be a mutual interest in Russia and the European Union to develop a mutually beneficial relationship in this area.

That this has proven difficult is obvious to each and everyone. And the reason lies in the different course that Russia has chosen since it signed the Energy Charter with its Transit Protocol.

This was based on an approach grounded on open and competitive markets, while since then Russia has chosen the course of building increasingly powerful semi-monopolies, bringing it into head-on collision with the approach most recently laid out by the European Commission in its new energy package last month.

In the debates around Europe there are mounting concerns over these issues.

If, in the period immediately after the Ukraine shut-off, these centered on the risks of similar action being taken for more or less political reasons versus other countries, they are now increasingly concerned with the ability of Russia to deliver, above all, gas in increasing quantities in the years ahead.

With investments in the big energy corporations primarily going elsewhere, and with important projects slipping further and further into the future, there is growing concern in Europe that we will have to deal with a Russia with declining gas production and with - at the best - flat oil production.

It is thus not unnatural that the European Union will be keen to diversify its sources of energy supply in the years ahead. And neither is it unnatural that issues relating to energy will be high up on the European agenda in the years to come.

The fact that both Turkey and Ukraine are actively interested in becoming part of the Energy Community centered on the European Union further testifies to the importance that all European countries attach to these issues.

Some years ago, the European Union and Russia committed themselves to the development of the so-called four spaces, and there was talk about a strategic partnership between the two.

Since then, progress on the four spaces has been haphazard, and I find it difficult to talk about a true strategic relationship between Moscow and Brussels. Instead, the relationship in recent years has been centered around a series of more or less important points of friction.

We saw the heavy hand used against Estonia during the debate about the bronze soldier this spring. We are still seeing the economic blockade against Georgia as well incidents like the one with the failed missile attack against a radar station in early August. We see pipelines to Latvia and Lithuania being cut off for reasons that are certainly not economic. We are all aware of the case of the murder in London of Mr. Litvinenko.

Incidents like these should not be in the interests of anyone. Rational analyses in Moscow should also lead to the conclusion that many of the policies pursued against smaller neighbors like Georgia have been profoundly counterproductive also from the Russian point of view.

In the years ahead - after the Russian elections - I believe we should see if there is a possibility of forging a truly strategic relationship between Brussels and Moscow.

With the new institutions of the Reform Treaty coming into force, the ability of the Union to be a true strategic partner will undoubtedly increase. And by that time we will also know which course Russia will have taken on issues ranging from WTO membership towards the rule of law in its own country.

That such a strategic relationship should be in our mutual interest is beyond doubt - but that is not to say that it will be truly achievable. The effort must however be made.

Sweden will try to play its part in these efforts. We have made our views known when we believe that the actions of Russia have violated the principles on which relations between European states should be based, and I can assure you that we will continue to do so.

As we take overt he Chairmanship of the Council of Europe we will also have an additional reason to focus even more on all issues related to the respect for the human rights that all members of the Council have committed themselves to, and where the record of Russia often comes in for critical scrutiny.

But we will also continue to develop an intense dialogue with Russia on the entire range of European and international issues we are facing. I have enjoyed my different meetings with Foreign Minister Lavrov as well as with other official Russian representatives, and there is certainly much to discuss in the months and years ahead. Kosovo and Iran - to name just two issues high up on the agenda.

We are also a partner with Russia in cooperation in the Baltic and Barents Sea areas, where we are discussing both the reform of the Council of the Baltic Sea States, the further development of the Northern Dimension and all the different issues related to new developments in the High North and the Barents Sea area.

I will be meeting my colleagues from Finland and Norway in northern Norway on Tuesday and Wednesday, and issues related to Russia and cooperation with Russia will certainly be high on our agenda.

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