EU-Russia Relationship: Brexit Could Open the Door to Russia Joining the EU (and why not?) - by Cyrus Sanati

Could Russia become a full member of the EU?

A little over a year Cyrus Sanati  wrote in an OpEd for Fortune Magazine:  "Britain’s exit from the European Union opens the door to a possible Russian entry—a “Rentry” or perhaps “Russ-in”—into the (now) 27-member club. While it could take years, even decades, before the Russian Federation could meet all the criteria under the so-called Copenhagen Criteria to join the EU as a full member, it is far more likely to occur now with the U.K. out of the picture."

"Obviously the question now is: "why not? "

Tempting Russia with EU membership would do far more to elicit better behavior from Moscow than the weak economic sanctions the EU currently imposes on it. Russia’s entry would not only be a boon for trade in the region, but it would also finally make Europe a true superpower with the ability to take on China and the U.S. both economically and militarily.

At first blush, it might crazy to think “Rentry” could happen. After all, tensions between Russia and the EU are arguably at their highest level since the end of the Cold War. Last week, amid Russia’s continued aggression in the Ukraine, the EU extended its long-running banking sanctions against Moscow for another year.

Retaliatory Russian sanctions against EU foodstuffs will remain in effect as well, costing the EU agri-food sector billions of euros in lost revenue. Meanwhile, net foreign direct investment flows between Russia and Europe are now at their lowest level in nearly two decades, going from $80 billion in 2013 to almost nil last year.

And if the economic tension wasn’t bad enough, the Baltic states and Poland, which are all EU (and NATO) members, have increased their defense spending considerably following Russia’s invasion of the Crimea two years ago. They are increasingly concerned that Vladimir Putin, Russia’s long-standing leader, might try to reenact the opening scene of World War II and invade their territories. This might be paranoid, but it’s not totally off-base.

Still, despite the increased tensions and simultaneous crash in energy prices, Russia remains the EU’s fourth-largest trading partner and the EU continues to be Russia’s biggest trading partner; total trade between the two was nearly €209 billion in 2015, according to figures from the European Commission.

If energy prices rebound, which will happen sooner or later, those trade figures will explode. Back in 2012, before energy prices crashed and before sanctions were imposed, annual trade between the two equaled €338 billion, making Russia the EU’s third largest trading partner behind the U.S. and China.

If there was truly free trade and open borders between Russia and Europe, that number could easily double or triple in just a few years.

It will be hard for the sides to continue dismissing each other given their close geographical proximity and historical ties. Indeed, half of the European Union was either directly or indirectly ruled from Moscow at some point in the last century. As such, much of the infrastructure needed for trade—such as pipelines, roads, and railroads—are already connected. Today, Russia supplies nearly all he natural gas for many of the eastern members of the EU, as well as the bulk of Germany’s needs. As Germany continues to retire its nuclear and coal power plants, this link will only grow more important.

"The question is therefore not if, but when will both the EU and Russia start looking at their relationship in a more serious way, despite all the negative rhetoric coming from Washington about Russia."
 
EU-Digest