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Russia needs Europe’s technological resources to maintain its current economic and political system. Europe, however, wants its investment in Russia to lead to long-term institutional reform in Moscow.
Moscow’s unwillingness to trust market forces and continued insistence on top-down economic policies undermines any attempt at a true economic partnership with Europe.
The need for a strong relationship between Moscow and Brussels is clear, but Europe faces administrative and political barriers to a common policy on Russia and Russia remains unwilling to undertake the reforms that would make it more compatible with the EU.
Changing market conditions, increasing costs of production, and a new commitment to efficiency have given Russia an opportunity to increase its collaboration with Europe on issues of energy security.
Despite the renewed flow of bank credit, investment remains low in Russia. If investment growth fails to materialize soon, the economy may be headed for a long period of stagnation.
The U.S. administration and politicians in Moscow have sharply divergent views on the ‘reset’ in bilateral relations. Where U.S. officials see dialogue, compromises, and concessions as a means of winning over the other side, the Russian elite considers dialogue to be a sign of weakness.
Although Azerbaijan and Turkey have reached an agreement to supply natural gas to Turkey, the Nabucco pipeline project still faces many challenges.
The Kremlin’s new foreign policy agenda reflects Russia’s increasing need to channel resources towards modernization, a project which requires improved relations with the West.
In 1998, Russia successfully dealt with a severe fiscal crisis by restructuring its debt. If Greece chooses to do the same, it should take note of three valuable lessons from Russia’s experience.
Nuclear nonproliferation cannot be considered utopian since we know what can and should be done to achieve it. The harder question, however, is whether we can muster the political will to create the necessary geo-political and security conditions to achieve common nonproliferation goals.
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