Pragmatic Integration: Scenario 1 for Eastern Partnership 2030

Over the next ten years, in the absence of major political setbacks or security related turbulence, most of the countries of the Eastern Partnership will have a fairly good chance of success in their political association and economic integration with the EU.

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The soft power of the world’s largest trading bloc and the market-based advance towards greater economic integration and technical approximation will develop into an pragmatic, fairly inconspicuous, yet effective approach.

There are no major slogans, symbols or serious expectation for membership, but foreign direct investment, trade and economic interdependence will continue to increase, with some improvement in infrastructure development and interconnectivity. In turn, this will lead to an effective consolidation within the Eastern Partnership countries, at least in the cases of Georgia, Ukraine and Moldova, by virtue of their Association Agreements (AA) and Deep and Comprehensive Free Trade Agreements (DCFTA). For the three other EaP members, the focus is on pursuing a similar, but silent form of integration, based on pragmatism ahead of any changes to their security and diplomatic ties to Russia. Meanwhile, as this apparent divergence among EaP countries still widens, in the next years, the differentiation between the first and the second group becomes so significant and pronounced that the EU is forced to reframe the approach and modify the Eastern Partnership framework.

Subsequently, as the EU needs to reshape its neighbourhood policy overall, the Eastern Partnership remains an important template. The Commission would seek to maintain a positive trajectory but refrain from any emphasis on a “geopolitical” narrative.

This chosen course is to avoid the inherent risk of a Russian overreaction to what Moscow may see as a process of integration that moves the EaP states too fast and too far away from the Russian orbit. At the same time, the policy framework enjoys the support of a dedicated group of political advocates within the Union, such as Sweden, the Visegrad Group countries, Austria and Germany, each playing a notable role in pushing and pressing this agenda forward, building up on major breakthroughs of the previous decade such as the implementation of several association and free trade agreements as well as visa liberalisation.

In the perspective of the next decade, the EU extends its connectivity projects all across the neighbourhood, by emphasising good trade relations and increases in investment opportunities. This is coherent with the political strategy of an ambitious Commission that seeks tangible foreign policy results by means of economic tools. The subsequent success and support, however, stems from the fact that more states within the EU are increasingly persuaded to adopt a more pragmatic form of integration and approximation as ways to boost the intra-EU economy and project the bloc’s regulatory power. Financial support and technical expertise are provided both by EU-wide programs as well as individual countries. It goes hand in hand with businesses expanding their portfolios in Eastern Europe. There is also an increased attention to vocational training and the exchange of civil servants to encourage the diffusion of best practices.

However, the absence of any major political changes regarding the EaP platform will foster a sense of stagnation in the six neighbouring countries. While some technical improvements are introduced, such as a unified cellular roaming area, and positive developments regarding the standard of living are achieved, there remains an acute lack of policies that address the challenges of civil society.

In turn, this marginalisation starts to antagonise civil society actors, whose dynamism depletes or who build up grass root momentum critical to the common European project. Since the EU shows much less desire to seek and strengthen democracy in the region, the relevance of the rule of law is limited to only private property, contract enforcement, arbitration, trade and foreign investment. This limited focus on pragmatic integration constrains the EU’s ambitious climate agenda, delaying the transition and the transformation of legacy industries within the EaP countries, although there is some progress in the adoption of ‘green’ policies, regulations and investments. In demographic terms, relative prosperity allows for some return migration.

Ultimately, Russia fails to offer any alternative for increased trade and economic growth but instead seeks to anchor itself in the integration process by building up connectivity with the EaP countries. Moscow may only resort to limited but visceral displays of hard power, where greater political integration is likely to take place.

Over the next decade, the EaP countries gradually achieve tangible but limited progress on their road to Europe. While not accomplishing much beyond political association, they await a new opening made by the EU in the direction of future enlargement.

This stand-by mode, however, has a decimating effect on younger, entrepreneurial generations, which results in the radicalisation of the domestic political scene.

 

Country-specific scenarios

Armenia

Although Armenia sacrificed its Association Agreement (AA) and a DCFTA, these prior experiences of approximation and harmonisation with EU technical norms and regulations offer a foundation for the development of trade, the deepening of economic integration and a driver of strategic reforms in core areas of science, education and health care. Coupled with its Comprehensive and Enhanced Partnership Agreement with the EU, Armenia offsets the constraints inherent from membership in the Eurasian Economic Union and consolidates domestic reform, while mitigating Russian concerns by avoiding any shift in foreign policy or geopolitical orientation. Over time, Armenia garners dividends from serving as a ‘bridge’ between the EU and the Eurasian Economic Union, while pre-empting any threat from Russia by maintaining its security partnership with Moscow.

Azerbaijan

Facing a speedy decline in oil production and falling budgetary income, Azerbaijan embarks on genuine Singapore-modelled reforms to diversify the economy and improve the business environment. A new technocratic government is formed to tackle corruption and curb old monopolies. Taking advantage of its geopolitical location, Baku emerges as an important regional transportation hub: it attracts Western and Chinese investment. Although the EaP program strengthens local civil society and helps to recall the restrictive NGO legislation, Azerbaijan maintains a fairly sharp course on political dissent which rules out further integration with Europe.

Belarus

Belarus does not push for immediate economic agreements with the EU. Nevertheless, growing trade and supply chains between the EU and Belarus are inevitable in the light of new logistics for oil, gas and fuel supplies. The authorities launch a radical image-making campaign to attract EU investment and trade securing absolute guarantees for foreign-owned property, investments and personnel. The EU, in turn, furthers the support of infrastructure and energy projects to ensure deeper interconnectivity of Belarusian energy system with EU standards. Although military and security cooperation with the EU and NATO remains low, the exchange of civil servants happens to be more active than in all previous decades.

Georgia

Georgia has the lowest increase in its exports to the EU among three DCFTA signatories. Exporters are unable or unwilling to invest and improve their capabilities to meet the EU’s strict regulatory standards. While the AA and DCFTA had a limited positive impact on the Georgian economy, the country’s performance is gradually deteriorating, despite many tools for trade and investment, job creation and the improvement of the overall socio-economic situation. These negative trends considerably increase the influence of nationalist and illiberal forces in Georgian politics, thereby making the government prone to populist policies and receptive to competing trade offers from Russia and China.

Moldova

Moldova, reflecting on the strengths and economic benefits based on the implementation of the AA and DCFTA with EU, is determined to strengthen the agricultural and agro-food sector which still represents the essential driver of Moldova’s external trade. Expansions of trade flows with the EU, improvement of the foreign trade performance creates favourable conditions for enhancing competitiveness and poverty reduction. In the background, however, Russian pressure is increasing and affects Moldova’s domestic and foreign policies development. At the same time, the tension between the EU and Russia remains unchanged. Questions regarding the peaceful settlement of the Transnistrian conflict and the withdrawal of the Russian troops from the territory of Moldova continue to be sensitive.

Ukraine

There may be disappointment caused by the lack of an accession perspective for Ukraine. Political forces that promote the idea of EU integration face marginalisation. However, if public expectations are properly managed, the population adapts to the option of integration without accession. The EU keeps a competitive offer for a partnership on the table, so the Ukrainian government does not choose economic cooperation with other actors, such as China and Turkey, who are becoming more assertive in the region. A direct bilateral relationship between the EU and Ukraine in terms of trade and cooperation leads to civil society actors losing their role as watchdogs and drivers of deep and comprehensive reforms.

 

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Editor-in-chief
President Res Publica
Wojciech Przybylski

Co-editor of the report
Joerg Forbrig

 

© Visegrad Insight © German Marshall Fund of the U.S.”

This publication is a result of a joint effort of Visegrad Insight and the German Marshall Fund of the United States to chart possible trajectories for the Eastern Partnership region. Project partners include the Slovak Foreign Policy Association, the Czech Association for International Affairs, the Hungarian Centre for Euro-Atlantic Integration and Democracy, the Foreign Policy Council “Ukrainian Prism”, the Belarusian House and the International Strategic Action Network for Security.

This report has been supported by the International Visegrad Fund. It does not necessarily reflect the official policy or position of the Visegrad Group or the International Visegrad Fund. An earlier thematic report named Eastern Partnership 2030 Trends was developed with the support of the Polish Ministry of Foreign Affairs.