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FACTBOX-Key issues in Russia-EU relations

Published 05/22/2009, 09:10 AM
Updated 05/22/2009, 09:16 AM

May 22 (Reuters) - The following are key issues in Russia-EU relations:

ENERGY

Russia supplies just over a quarter of the European Union's gas needs but some consumers in the 27-member bloc were left without gas for nearly two weeks this winter because of a row between Russia and Ukraine over gas prices and unpaid bills.

The European Union says it wants to find alternative supplies, but Russia's state controlled gas company, Gazprom forecasts EU dependence on Russian gas will rise to 33 percent by 2015.

Russia was angered this year when Brussels announced a deal with Ukraine to refurbish ageing Soviet-era pipelines, a move Moscow felt had been taken without due regard for its interests.

The European Union has been pushing for a gas pipeline known as Nabucco to be built that would bypass Russian territory and transport gas from the Caspian Sea and Central Asia via Turkey to southern Europe.

Russia, which opposes attempts to break its control of supplies from the former Soviet Union, is developing its rival South Stream project to supply Europe.

TRADE

Russia has said it is losing patience over Western promises to help with its WTO bid after more than a decade of talks on joining the 153-member body.

The EU said on Friday that there could be no final deal on a replacement for the 1994 Partnership and Cooperation Agreement, the foundation of EU-Russia relations, until Russia before it joins the WTO. [ID:nLM689774]

The EU is Russia's main trading partner, accounting for over 52 percent of its external trade in 2008.

EU exports to Russia totalled 105 billion euros ($144.7 billion) in 2008 while imports from Russia totalled 173.2 billion euros, according to EU data. Energy and mineral fuel products account for 68 percent of bilateral trade.

WAR IN GEORGIA

The war between Russia and Georgia last August over the Moscow-backed region of South Ossetia strained Moscow's ties with the EU, which threatened to suspend talks on a new partnership agreement unless Russia withdrew troops from Georgia.

French President Nicolas Sarkozy, whose country then held the rotating Presidency, played the central role in negotiating a ceasefire between Russia and Georgia.

But Moscow believes the EU collectively took Georgia's side over the five-day war, which was sparked when Georgia sought to retake South Ossetia.

EU EXPANSION

The EU took in 10, mostly ex-communist countries from central and eastern Europe in 2004 and two more in 2007, creating the world's biggest integrated economic area.

Russia, while not overtly opposed to EU expansion, has been deeply critical of NATO expansion towards Russia's borders.

Kremlin officials say privately that European leaders missed an opportunity to invite Russia to join the block after the 1991 fall of the Soviet Union.

Russian leaders have repeatedly said they are frustrated by the EU's decision making structures. Moscow has been effective at making bilateral deals with individual states rather than dealing directly with Brussels.

EU leaders at the Khabarovsk summit struggled to convince Russia that a new Eastern Partnership was not intended to turn Belarus, Ukraine, Moldova, Georgia, Armenia and Azerbaijan against Russia.

"What we don't want is the Eastern Partnership to be turned into a partnership that is against Russia," President Dmitry Medvedev told reporters.

POPULATION AND GDP

The International Monetary Fund estimates EU gross domestic product totalled about $18 trillion in current prices in 2008, making it the world's biggest economic power.

Russian nominal GDP totalled about $1.7 trillion last year, according to government statistics. The EU's 27 member states have a combined population of 500 million while Russia has a population of 142 million.

Sources: Reuters, IMF, Eurostat, Kremlin (Compiled by Guy Faulconbridge, editing by Philippa Fletcher)

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