Russian Economic Nationalism: The Genesis of the Growing Disconnect in EU-Russian Energy Relations

Abstract

Among many issues that the European Union faces when it comes to managing its relationship with Russia, the issue of energy is probably one of the most contentious. The European Union being a very import dependent region for oil and gas and increasingly so in recent years, has become quite heavily reliant on Russia for the supply of these commodities. For the European Union, Russia is its single largest and therefore most important source of imports for oil and gas and conversely the European Union is Russia’s single most important market for the sale of these commodities. The two parties fundamentally depend upon each other, one for revenues and the other for supply of these energy commodities. Both the European Union and Russia benefit from cooperation; however, even still, the relationship is earmarked by disagreement. We have seen the European Union and Russia reach the outcome of discord upon a number of issues. In particular both parties have disagreed with regards to the Partnership and Cooperation Agreement and the Energy Charter Treaty, as well as many other events and aspects. As such both sides appear to fundamentally oppose each other’s policies in this specific area. In light of this, this study aims to uncover the underlying reasons as to why there has been such disagreement between the Russian Federation and the European Union in the area of energy related negotiations and agreements over the past fifteen years. This thesis hypothesizes that the emergence of an energy policy in Russia that has transitioned to that of being based upon economic nationalism since the rise of Vladimir Putin in 2000, from the economic liberalist approach pursued during the years of Boris Yeltsin, has led to increased levels of disagreement between the Russian Federation and the European Union on energy related matters.