Eurasian Economic Union and the Difficulties of Integration: The Case of South Ossetia and Abkhazia

Abstract

And here comes in the question whether it is better to be loved rather than feared, or feared rather than loved. Niccolo Machiavelli, The PrinceIntroductionThe Ukrainian crisis of 2013, followed by the annexation of Crimea, has redistributed the balance of power among the political players of the world arena. Moreover, since Putin's return to the presidency in 2012, the concept of a shared neighborhood between the Russian Federation and the European Union (EU) becomes a strategic challenge not only for both but foremost for those post-Soviet republics struggling between two strategic decisions: to accept Russian protection or to choose Western development.1The aim of this paper is to shed light on the forthcoming 2015 Eurasian Economic Union's (EEU) economic and political perspectives, on South Ossetia and Abkhazia's economic attractiveness, the sentiment inside those breakaway regions of Georgia and the Russian Federation standpoint in resolving or maintaining the situation in the disputed territories.Originating in 2009, the Eurasian Customs Union or Customs Union of Belarus, Kazakhstan, and Russia (CU) came into existence on 1 January 2010 as an attempt to establish a defensible economic integration model. However, the EEU was also enthused by the creation of the Eastern Partnership (EaP), an initiative of the European Union to establish closer ties with the six post-Soviet countries in Eastern Europe and the South Caucasus (Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine), designed to promote regional stability between the EU and its Eastern neighbors trough trade and economic agreements, and democratic institutions building.2 Aimed at supporting these countries in overcoming economic and political challenges, the EaP was perceived by the Russian government as a platform for the European Union's (EU) enlargement, close to Russia's borders and its strategic near abroad, thereby threatening Russia's national, geopolitical and security interests.Since 1990, Russia has openly resisted any North Atlantic Treaty Organization (NATO) expansion towards its periphery3 and reemphasized this rhetoric several times: in 2004 when Georgia declared its intention of Euro-Atlantic integration; during the war in South Ossetia in 2008 by sending a strong message to Ukraine that its insistence on NATO membership may lead to war and/or its dismemberment4; and, most recently, when Ukraine's fomented domestic crisis over the European Trade Association Agreement resulted in Putin's annexation of the Crimean peninsula as a means of securing Russia's strategic naval base in Sevastopol.5Ukraine's importance to Russia has always been considered critical, even before the dissolution of the Soviet Union in 1991. Therefore Ukraine's choice to take a European path has meaningfully reshaped Putin's concept of the EEU integration.6At the very beginning, the EEU was regarded as an economic foundation for prosperous shared dividends, a project of broader reintegration within the former Soviet area to cement Russia's influence within the near abroad and as a direct response to the EaP activities. Today, however, we face a new geopolitical reality in which Russia may amend the EEU with political and military agreements in order to tip the balance of power in the region in its favor and secure its borders. Nonetheless, this scenario is a critical topic when hypothesizing about Russia's possible reaction towards a rapidly changing foreign context.Eurasian Economic Union: Perspectives and DrawbacksOn 1 January 2015 the EEU, an economic bloc comprised of Armenia, Belarus, Kazakhstan and Russia, was launched. Founded on the basis of the CU, the EEU will continue the policy of reducing tariff barriers, establishing free trade zones in all economic sectors among member states, facilitating trade and allowing the free movement of goods and services. In addition, all members must adopt common external and internal economic and trade policies, free movement of citizens and capital and possibly a common currency. …