EU-Russia relations in the context of the eastern neighbourhood

This report briefly examines EU-Russia relations in the context of the eastern neighbourhood. It contends that both the EU and Russia’s ambitions for the eastern region have evolved into two competing region-building projects underpinned by differing strategies, norms, instruments, and actors. Although projecting competing rationalities, the two projects, until recently, had peacefully co-existed, working around conflicting issues of political norms and economic convergence, which were not necessarily seen as insurmountable for furthering regional cooperation. Their subsequent politicisation and securitisation, as a consequence of events in Ukraine, have rendered regional partnership currently incompatible, revealing a profound lack of understanding the region by both the EU and Russia; and the EU under-exploited capacity to work co-jointly with the Eurasian Union (and Russia) vis-a-vis the region. This report contends that the EU must make an effort to acknowledge and engage with the above actors in the region, in order to develop cooperative strategies, based on shared interests, international norms and compatible instruments for the advancement of economic and political convergence

The Eastern Partnership Initiative: A New Opportunity for Neighbours?

The EU's relationship with its neighbours to the east has long been founded on the aspiration to build a kind of partnership that does not automatically offer the prospect of membership to former Soviet republics apart from the Baltic States. The mechanism for this was initially the European Neighbourhood Policy, embracing a wider range of countries, which has been further buttressed by the Eastern Partnership initiative (EaP) in an effort to revitalize the partnership-building process in the east. Although more differentiated and versatile, the EaP has nevertheless inherited the Neighbourhood Policy's original conceptual limitations, especially concerning the ill-defined nature of partnership. Practical limitations, on the other hand, include the policy's lack of coherence and management, as well as its low visibility and public appreciation on the ground across the board. The East European response to the EU's initiative reveals further tensions and contradictions, especially pertaining to partner countries' geopolitics and cultural and civilization differences. It is clear that the EU's ‘politics of inclusion’ needs further conceptualization in order to shift the balance away from the EU towards the partner countries themselves. Only in these circumstances of de-centring can the notion of partnership become true and effective

Evaluating the role of partnership in the European Neighbourhood Policy

After recent enlargements, the EU sought to develop a new strategy that would incentivise rather than compel, in the absence of a membership prospect, the neighbours for reform. The concept of partnership was placed on the agenda as a supplementary tool of EU governance to offset negative externalities of convergence and compliance. However, it has taken the EU three conceptual iterations to finally identify a suitable frame for engagement. This paper posits that the EU is currently at a critical juncture observing an important shift in its modus operandi – away from hierarchical coordination and control, to more networked relations of self-censorship and ownership, designed to operate through a complex matrix of grass-root initiatives to penetrate all levels of society. To make it an effective model for the future external relations, the EU still requires two important elements – institutionalisation of the new governance structure, and learning about ‘the other’, to mobilise partners’ support for reciprocal and sustainable cooperation

The Belarusian Case of Transition : Whither Financial Repression?

The present paper examines the financial development of Belarus, with special emphasis on 1996-2002, when the financial sector was restrained by pervasive government controls. Belarus is of particular interest, as, despite no economic restructuring, annual growth has averaged seven per cent since 1997. It has been argued that monetary stimulation of investment activity through interest rate ceilings, directed credit and preferential loans revived growth. This article investigates whether a repressive financial policy, adopted by the authorities in the late 1990s, led to financial deepening and increased the share of savings allocated to investment.financial sector; financial repression; financial depth

Better means more: property rights and high-growth aspiration entrepreneurship

This paper contrasts the determinants of entrepreneurial entry and high-growth aspiration entrepreneurship. Using the Global Entrepreneurship Monitor (GEM) surveys for 42 countries over the period 1998-2005, we analyse how institutional environment and entrepreneurial characteristics affect individual decisions to become entrepreneurs and aspirations to set up high-growth ventures. We find that institutions exert different effects on entrepreneurial entry and on the individual choice to launch high-growth aspiration projects. In particular, a strong property rights system is important for high-growth aspiration entrepreneurship, but has less pronounced effects for entrepreneurial entry. The availability of finance and the fiscal burden matter for both

Building a Stronger Eastern Partnership: Towards an EaP 2.0

The European Union has been working to deepen the economic and political relationship with its Eastern neighbouring countries over the recent years. A set of formal agreements are intended for signature between the EU and Ukraine, Moldova and the South Caucasus states at the Eastern Partnership (EaP) summit scheduled for 28-29 November 2013. These agreements have provoked a response from the Russian Federation which is seeking to offer an alternative set of economic relationship to the exclusion of the EU. In the first Policy Paper to be published, the recently created Global Europe Centre (GEC) sets out a reform agenda that the EU needs to adopt towards the EaP states to enable a more binding relationship. The paper argues that the EU needs to define a ‘next generation’ objective for the EaPas it enters the implementation phase of the current set of Association Agreements (AAs). The proposal is that the EU should set a European Partnership Community (EPC) statusas a bilateral and multilateral goal for the EaP. The paper contends that there is urgency for the EU to think more strategically vis-à-vis its neighbourhood, and create a more clear-cut place for Russia to avoid the current situation of divisive competition. Further, the EU needs to reform aspects of its current EaP policy. The EU needs to define a clearer, and measureable set of objectives for its role in the resolution of the ‘frozen’ conflicts of its Eastern neighbourhood; refresh its policy towards Belarus; speed up visa liberalisation to ease travel for citizens of the EU’s neighbouring states; and deepen and broaden civil society engagement by investing more in deep democracy, linkage and people-to-people contacts

Maximising Seigniorage and Inflation Tax: The Case of Belarus

While most Central European countries, realising the inflationary potential of money creation, had by the mid-1990s switched to market instruments based monetary policy, Belarus continued to use money emission, so gaining seigniorage and inflation tax. The productivity of the inflation tax can be analysed by comparing the revenue actually raised from inflation tax with the revenue that could be raised if the quantity of money had risen at a constant rate. The present paper, based on Cagan’s (1956) seminal work ‘Monetary Dynamics of Hyperinflation’, analyses the effect of inflation on seigniorage revenue in Belarus and draws conclusions about the effectiveness of monetary policy in 1995-2002, and about the consequences of inflationary financing.

NATO: the view from the East

Relations between Russia, Ukraine and Belarus and NATO have placed more emphasis on cooperation than confrontation since the Cold War, and Ukraine has begun to move towards membership. At the popular level, on the evidence of national surveys in 2004 and 2005, NATO continues to be perceived as a significant threat, but in Russia and Ukraine it comes behind the United States (in Belarus the numbers are similar). There are few socioeconomic predictors of support for NATO membership that are significant across all three countries, but there are wide differences by region, and by attitudinal variables such as support for a market economy and for EU membership. The relationship between popular attitudes and foreign policy is normally a distant one; but in Ukraine NATO membership will require public support in a referendum, and in all three cases public attitudes on foreign policy issues can influence foreign policy in other ways, including the composition of parliamentary committees. In newly independent states whose international allegiances are still evolving, the associations between public opinion and foreign and security policy may often be closer than in the established democracies

The parliamentary election and referendum in Belarus, October 2004

Belarus became an independent state in December 1991 on the dissolution of the USSR; and it became a presidential state under its constitution of March 1994. At the first election under that constitution, in July 1994, Alexander Lukashenko won a convincing mandate with 80% of the vote in a second-round runoff against the then prime minister, Vyacheslav Kebich. Once elected, Lukashenko moved quickly to extend the powers of his office, which soon brought him into conflict with the Belarusian parliament (then known as the Supreme Soviet) and the Constitutional Court. He sought to resolve this by calling a referendum, in May 1995, when a positive vote allowed him to expand his presidential powers. In November 1996, a further and more controversial referendum approved an extension of the presidential term and replaced the parliament with a smaller and wholly subordinate National Assembly (Natsional'noe Sobranie). This was effectively a constitutional coup, which paved the way for the establishment of an increasingly authoritarian regime