NATO and Russia in war of words

Grim-faced NATO Secretary-General Jaap de Hoop Scheffer (right), speaks with British Foreign Affairs minister David Miliband before NATO's in Brussels to discuss Russia's invasion of Georgia.

TEXT OF STORY

Kai Ryssdal: Europeans have their own economic problems. All 15 countries that use the euro saw their economies shrink last quarter. But there's arguably a more imminent threat they have to deal with, which explains why it was all Russia all the time in Brussels today. NATO foreign ministers were meeting to try to figure out what they can do about Moscow and its invasion of Georgia. Not much, as it happens, because the allies have made it clear they don't want a military confrontation with Russia right in its own backyard. So the focus is shifting to the European Union and whether it can use economic power to persuade the Russians to pull out. From the Marketplace European Desk in London, Stephen Beard reports.


Stephen Beard: The EU should have more leverage with Russia than anyone else. Right on its doorstep, the bloc is by far Russia's biggest trading partner. The EU brokered a peace deal over the Georgia conflict, and Russia clearly breached it. But Nicholas Redman of the Economist Intelligence Unit says, don't expect any punitive action from the EU.

Nicholas Redman: The bottom line is that the EU is divided, and until Russia ups the ante so dramatically that even those countries that are basically well disposed toward Russia are willing take a firmer line, you're not going to see a firmer line.

And certainly not from Germany. The EU's economic superpower depends on Russia for almost 50 percent of its natural gas. Germany is unlikely to call for trade sanctions against Moscow. The EU could oppose Russian membership of the World Trade Organization. It could call for Russia to be booted out of the G-8. But, says Tomas Valasek of the Centre for European Reform, none of this would cut much ice with the Russians.

Tomas Valasek: The reality is that Russia wants to trade with the European Union. It wants to be liked and respected by the European Union but there's really no particular threat that you can level against Russia to threaten Russia into withdrawing from Georgia.

He says that Europe needs Russia more than the Russians needs Europe. That will only change if the Europeans can wean themselves off their dependency on Russian energy. They are trying, but it will take time. The fate of Georgia may well be decided long before the Europeans find enough alternative supplies of gas and oil.

In London, this is Stephen Beard for Marketplace.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

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