Everyone Loses: The Ukraine Crisis and the Ruinous Contest for Post-Soviet Eurasia

In its initial stages, this project should be graded as a guarded success.[66] Customs posts were removed on the borders between Russia and the two other members. EEC data shows a large increase in intra-Customs Union trade in 2010–12. Once Russia became a member of the World Trade Organization (WTO) in 2012, the Customs Union had to adopt a system of rules in line with WTO standards, hence exporting international norms to other members that did not belong to the WTO (Kazakhstan joined in 2015). Decision-making is conducted by consensus at the level of Council of the EEC, a body comprising deputy prime ministers from all member states with a rotating presidency. While there is evidence of Russia’s using political, economic and security instruments to keep other members in line, the need to achieve unanimous votes on major decisions has at times forced it to compromise. This requirement also gave the smaller member states a voice on policy decisions that were previously Russia’s exclusive prerogative. EEU officials professed an aspiration to emulate the best practices of the EU.

The EEU began as a technocratic, if geo-economic, endeavour, even though some outsiders have had doubts about the economic logic behind it. Be that as it may, Russia’s great-power aspirations and the intensifying zero-sum dynamic in the region between it and the EU soon began to shape Eurasian economic integration and to link it to geopolitics. In an article in the daily Izvestiya written in October 2011, as he was beginning his campaign to return to the presidency, then-prime minister Putin laid out his vision for the future of the bloc. He envisioned a ‘model of a powerful supranational association, capable of becoming one of the poles of the modern world and of playing the role of an effective inter-linkage between Europe and the dynamic Asia-Pacific region’.[67] What was then just a customs union – focused on mundane work like tariff unification and food-safety standards – had been given the geopolitical mission of ensuring Russia’s international heft for the twenty-first century. In the article, Putin called this future entity the ‘Eurasian Union’.

He had not cleared the rebranding with Nursultan Nazarbaev, the president of Kazakhstan, who was incensed, and demanded that ‘Economic’ be inserted into the name. The tiff with Putin was about far more than just word choice. Neither Nazarbaev nor Belarusian President Alexander Lukashenko was interested in more than economics, and they were particularly skittish about any effort to impinge on their political independence. Furthermore, they had not signed up for Moscow’s omnibus geopolitical vision for the EEU.[68] A few weeks after Putin published his article, Nazarbaev wrote his own piece for Izvestiya, in which he stressed that ‘economic interests, and not abstract geopolitical ideas and slogans, are the main driver of the integration process’.[69] That he was victorious on the name issue demonstrates that the EEU does give the non-Russian members some influence over important decisions.

In his Izvestiya article, Putin had noted that while ‘we welcome other CIS partners’ joining [the Union]… we do not plan to rush or compel anyone [to do so]’. He claimed that joining the Union need not contradict others’ ‘European choice’, because in the future, there would be bloc-to-bloc rapprochement talks. ‘So joining the Eurasian Union… will allow each of its members to integrate with Europe faster and on more advantageous terms.’[70] Unlike Putin’s 2005 comments in Kyiv, when he said that the approximation of Russian and EU legislation would allow its neighbours to integrate with both simultaneously, he now envisioned two separate blocs in Europe that would cut deals with one another but remain distinct. Under these circumstances, bandwagoning with Russia would be the only sensible option for CIS countries. The unspoken message to the In-Betweens was clear: Moscow wants to determine the extent and pace of their integration with the EU. Dealing directly with Brussels was not advisable.

The geo-economic dimension of the regional contestation had now taken on more significance, with both sides pursuing zero-sum policies. Russia, reverting to its coercive instincts, put pressure on the four In-Betweens that were flirting with the EU to block their Association Agreements and in some cases also to join the EEU. In the Georgian case, Moscow’s pull was limited; diplomatic ties had been severed in 2008 and Russia was no longer Georgia’s main trading partner. Moscow threatened to raise tariffs if Tbilisi signed the AA, but never followed through. In this case, the threat failed to sway Tbilisi; its AA was inked in June 2014.