Archive for December 20th, 2014


(Strategic) Partner/trading partner/adversary/enemy? Russia

December 20, 2014

A few days ago in an entry prior to the continued and expanded EU sanctions relating to Crimea, the following few lines appeared thus:  “In effect Crimea and those involved, (and are yet to be so), will become ring-fenced as a separate issue from events in eastern Ukraine as time passes, leaving Crimea a perennial bone of contention, whilst eventually a transactional – rather than business as usual – relationship with the Kremlin eventually becomes the normative when matters in the east are far more to the collective European liking.”

A statement that infers there has been a move from seeing Russia under current management as a partner to something other.  After all, a transactional relationship is not the relationship with an elevated status of a strategic partner, or more broadly speaking, a partner underwritten by goodwill – regardless of strategic need.  It is at best neutral/indifferent, perhaps adversarial – or worse.  It is a necessary relationship based on transactions between parties and little more.

It should perhaps therefore come as little surprise that Germany’s BASF made the unilateral decision to cancel a long planned asset swap with Gazprom yesterday.  BASF stating  “Due to the currently difficult political environment, BASF and Gazprom have decided not to complete the asset swap planned for the end of the year.

Europe and Russia need each other also in the future. Europe will continue to be the largest and most important market for Russian natural gas.”

A statement that underlines a move toward a transactional relationship, but clearly undermines one of a growing strategic partnership, leaving the current arrangement between the two companies as a 50/50 joint venture and no more – for the foreseeable future at least.

How much the “Energy Union” that seems certain to be at the very least enshrined into EU strategy documents – and thus very hard to undo even if it never actually functions – also has a potentially detrimental effect to the proposed BASF/Gazprom asset swap is hard to tell, as the draft action plan has yet to presented – though it is a very safe bet that large companies such as BASF will have a very good idea about the content already.

Thus, considering the “Energy Union” issue, and the associated weight it may carry, the BASF-Gazprom announcement does not necessarily provide the best of indicators in attempting to corroborate the statement regarding a move to a far more transactional relationship with Russia than one of partner.  That said, when it has now become increasing difficult to decide if the Ruble, the price of oil, or the word of The Kremlin has lost the most value in 2014 – all plummeting – it may well be that purely transactional relationships are far more likely to stand the test of time than anything more grandiose or politically/diplomatically elevated over the next 5 – 10 years (or more).

Whilst “partners” will become an increasingly estranged concept, yet “enemies” is far from currently being appropriate, it seems an “adversarial” but necessarily transactional decade confronts both Russian and European interaction.  Perhaps, to be blunt, no bad thing for all parties involved, forcing a need for introspection, emerging – hopefully – with a clear sense of what values are inviolable and non-negotiable, regardless of interests.  It is around such solid and unquestioned foundations that reliable partnerships are built after all.

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