Should Russia’s chequebook diplomacy be a real concern in Europe?

The European Union is debating whether or not to include more countries from the Balkans in the organisation. The narrative is: integrate them into the West now, before they become puppets of Putin’s Russia. But is that really true?

The “How” and “Why” of the EU’s enlargement

In 2004, the European Union had its biggest enlargement process yet, accepting the membership of ten countries at once. Excluding the islands of Cyprus and Malta, all had been either been under Soviet occupation or, in the case of Slovenia, a former Yugoslav Republic country. The Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, and Slovakia were all accepted as new members in an effort to pull them out of the Eastern Bloc, providing their economies with EU funding and the right to freely work and travel across Western, Northern, and Southern Europe. Needless to say, pro-EU sentiment in those days was overwhelming. Fifteen years later, the stance of many people inside those countries has become more moderate. According to Eurobarometer — the European Union Commission’s own surveys–clear support for membership of the EU is a mere 52% in Latvia, 50% in Slovakia, or 34% in the Czech Republic. The EU’s latest addition, Croatia, also a former socialist country, only has 36% in support of the EU.

A number of factors explain this shift: after the fall of communism, the countries that had suffered under the Soviet Union were seeking safety through their European partners, but they were also seeking donors. Communism had wiped out the enormous potential that these countries had, leaving behind massive bureaucracies thoroughly infested with corruption. With the European Union’s so-called “cohesion funds,” incoming members were able to massively invest in new streets, tunnels, and bridges: all necessary infrastructure for the rebuilding of a stable country with a functioning market economy. And despite infrastructure renewal not being insignificant, many of the Central-, Eastern European, and Baltic countries excelled with low corporate tax rates, and even lower regulatory burdens, making  the countries attractive for business. This has given the opportunity to Czechs, Hungarians, or Slovaks, to reflect on the EU and its policies. Economic independence from Brussels handouts kickstarts growing euroscepticism in these countries.

For a while, the European Union has attempted chequebook diplomacy, but apparently new motorways don’t mean much in countries that have the ability to independently raise themselves to the higher standards. Romania, for example, also a former socialist dictatorship, is now boasting growth numbers of 4.8%.

And now that the countries are in, and because Brussels is confident that exits, as seen with Brexit, are unlikely in Central and Eastern Europe, the EU  is also cutting back on incentives. Despite complaints by many countries in Europe’s East, the current administration is planning on cutting the union’s Common Agricultural Policy (CAP), which would affect countries like the Czech Republic the most. This gives the impression to these countries that they were a useful tool for the procurement of a larger political union, but once safely locked in, will  not benefit from the aid promised in the first place.

This is where Russia, to a certain degree, steps in.

Russia’s foreign aid

It is hard to make concrete statements about Russia’s foreign aid payments because Moscow doesn’t shine with transparency on the issue. The ambitions of foreign aid payments, however, are particularly obvious. Russia’s development assistance officially seeks to “create a belt of good neighbourliness along the Russian national borders,” “strengthen the credibility of Russia and promote an unbiased attitude to the Russian Federation,” and “influence global processes with a view to establishing a stable, fair and democratic world order.”

This is particular true for Central and Eastern Europe, which are amongst the largest benefactors of Russian aid. As EU funds are being slashed, countries such as Hungary could rely on Russian aid to balance important investments. For instance, the Putin government is pushing for further nuclear cooperation with Hungary with noticeable effects: in June of this year, Hungary was the only member state of the EU to oppose financial aid to Ukraine, which is still at war with pro-Russian separatist groups in the East.

Take the example of Nicaragua: it is one of the few countries in the world that recognizes Abkhazia and South Ossetia, Russian-backed separatist regions, as independent nations. During the Crimea crisis, Nicaragua also joined a small minority of 11 states to oppose a UN General Assembly resolution on the territorial integrity of Ukraine. From 2011 to 2015, the Republic of Nicaragua received nearly US$150 million in Official Development Assistance (ODA) from Russia. In fact, Russia is constantly battling with nations such as Georgia to make the best bid to impoverished nations around the world to recognise pro-Russian separatist regions in the United Nations in return for foreign aid.

The reaction

In an effort to counter Russian influence, the European Union is trying to gain geographical ground in the Balkan region by pushing the accession of Kosovo, Serbia, Albania, Montenegro, and Macedonia. This is Brussels’ attempt to avoid the creation of Russian puppet-states, such as Belarus, through which the European continent has seen the Suwałki Corridor arise: a 60-mile border between Lithuania and Poland that is the only snippet to connect the European Union’s core continental area with the Baltic countries (Lithuania, Latvia, Estonia). Through Belarus, a broken and bankrupt artefact of Soviet times, and the Russian exclave Kaliningrad, Russia would need only to close the small corridor to isolate the Baltics completely, should such a desire arise.

Image result for suwałki corridor

But once again, blindly funding infrastructure cannot be the answer for the European Union. What it should actually do is conclude deep integration agreements with those countries, allowing them to trade freely with the EU and affording opportunity to young people to visit Paris, Rome, Berlin, and London. Such tools can have significant cultural influences that would make a considerable impact on the interactions of these countries with Russia. The EU must stage a  battle of not of dollars, but of values. If Serbia or Hungary turn to the Russian Federation, their people should know that they are choosing autocratic governments over liberal democracy.

Russia’s chequebook, having been abandoned with the dissolution of the Soviet Union, is now back in business. But years of absence have left their effect: not many countries are actually supporting Russia’s expansion efforts through the UN, and even those votes that were scored eat up large parts of the foreign aid budget. If Moscow really prefers to make it rain green rather than rain bombs, (a far more desirable strategy, let it be said) it’ll have to get better at it, because until now the effects of the millions already spent are not very visible.

Russia’s chequebook diplomacy in Europe isn’t of great concern because the cheques, for now, at least, are too small.

This article was first published by Values4Europe.

Thanks for liking and sharing! Consider subscribing to this blog.

About Bill Wirtz

My name is Bill, I'm from Luxembourg and I write about the virtues of a free society. I favour individual and economic freedom and I believe in the capabilities people can develop when they have to take their own responsibilities.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s