Ahead of the EU-Russia summit the question about Russia's role in Europe and Europe's role in Russia acquires a new meaning. Economically, the modern Russia is part of Europe.
Europe's total direct investment in the Russian economy amounts to 75%.
European investors rushed to Russia in 2000-2001. Among the best-known transactions, British Petroleum paid €5 billion for a stake in the TNK oil company in 2002; Deutsche Telekom purchased a 25-% stake in MTS cellular mobile communication operator: Ruhrgas consolidated 6% of Gazprom's shares; Allianz bought a 25-% stake in the Rosno insurance company, and so on. Europeans are represented in consumer goods production, trade and financial services, which are receiving increased attention in Russia.
Here are some examples. The confectionary industry is dominated by Nestle, which has invested €4 billion to develop business in Russia and now owns 12 enterprises and a large distribution network. French Danone controls about 18% of the Russian dairy market and has here four enterprises. The Russian beer market is divided between Scandinavian Baltik Beverage Holding, Dutch Efes Beverages, Danish Carlsberg and British SAB, which together have invested at least €2 billion in the industry and control 76% of the production. In the tobacco and cigarette industry leading players - BAT, Gallaher, Imperial Tobacco and Altadis - account for about 65% of the output.
Branches of European banks develop most dynamically, and six of them - Raiffeizenbank, ING, ABN Amro, Dresdner Bank and Societe Generale - have subsidiaries that are on Russia's top 100 list of financial institutions (their aggregate own capital equaling €800 million).
Ikea, Karstadt, Metro and Auchan have opened their chain stores on the outskirts of large cities and invested over €2.9 billion in their development.
Russia's trade contacts with the European Union are even more impressive. In 2003, the EU countries accounted for 36% of Russian exports and 38.5% of imports. These indicators surged after ten new members joined the EU on May 1, 2004, to 51% and 46% respectively, according to preliminary estimates for 2004.
In the last six years, when the Russian economy has been on the rise, the aggregate exports from the Russian Federation has more than doubled from $71.3 billion in 1998 to almost $143 billion in 2004. Exports to the EU has been growing even faster, from $23.2 billion to almost $60.8 billion, an increase of 2.65 times. Imports from the EU countries have been up by over 65%, from $15.7 billion in 1998 to $26 billion in 2004.
Yet another crucial aspect of Russian-European interaction is mutual visits of their citizens. When Russians received an opportunity of relatively easy trips abroad, European countries immediately took top positions in the list of places most attractive for Russian citizens. In 2003 6.6 million Russians, or 56% of all Russians that went abroad, visited the EU. 2.7 million (76%) of them went on private trips, 1.8 million as tourists (40% of all Russian tourists) and 1.4 million on business trips (72% of all business trips).
The statistics of "return visits" to Russia is also telling. Unfortunately, reliable data are available only on 13 EU countries, but from these countries alone Russia in 2003 received 5.3 million people, or 65% of all guests from countries outside the CIS.
Naturally, the interaction is based on historic and cultural similarity of Russia and European states. Throughout the 18th and 19th centuries Russia was a new home for almost one million of educated Europeans, and in the 20th century Europe, in its turn, received about 4.5 million emigrants from Russia.
There is no other partner Russia is so much interested in economically and culturally as in European countries and the EU on the whole. In return it can offer Europe great competitive advantages of guaranteed supplies of natural resources and opportunities to enter its market, where European products seem most attractive.
Citizens of Russia and Europe are interested in and fond of each other. In the coming decades both Russian and European consumers and businessmen will be able to appreciate the huge benefits from the EU-Russia partnership.
At the same time, political interaction between the parties leaves an impression of a dialog where the Russian leadership takes part rather because of the sad necessity than with a hope for serious positive results. In recent years, Russian leaders have not made any clear statements about their attitude to the European Union that could be compared, for example, with Vladimir Putin's famous statement on solidarity with the USA in its fight against international terrorism. Russian politicians invariably interpret events inside the EU only as part of more global trends.
I believe this peculiarity is caused by the specifics of shaping these relations. There were no such relations in the Soviet era: the Soviet Union was the 39th country to recognize the EEC as a subject of international law and established diplomatic relations with it only in February 1989, shortly before collapsing. The creation of the EU proper (signing of the Maastricht agreement on February 7, 1992 and its coming into force on November 1, 1993) came at a time when Russia was little interested in the foreign policy.
Russia has entered the 21st century as a multinational and federative state, which, however, does not have deep traditions of true federalism. At the same time, Europe has accumulated a unique experience of coordinating interests of individual members of its "confederacy" after half a century of integration processes. This experience allows finding compromises for most complicated political problemswithin adopted legislation, gradually improving it. I believe that Russia's most important task today is to use this experience in its domestic affairs and to establish good neighborly relations and cooperation with its neighbors.
Both Russia and Europe need peace and stability. They are both interested in fight against terrorism.
Today Europe perceives some actions by the Russian leadership as alien to the European culture. Yet European politicians do not take trouble to try to understand Russian specifics. Russian and European politicians must learn to understand each other as our citizens do, cooperate as our businessmen do. Then the united Europe, spreading from the Atlantic to the Urals - the dream of great European politicians - will become the leader of the 21st century.
