Тема III.

TRADE PERSPECTIVES OF THE EU WITH RUSSIA

As the European Union brings countries of Eastern and Central Europe into its fold over the next few years, its political clout in the region is expected to strengthen and its influence on Russian economic life is set to grow.

But although the political ramifications of EU extension are considered damaging for Russia, the economic consequences are far from being a black-and-white, win-or-lose situation.

The EU accounts for about 40 percent of total Russian exports, but this is expected to rise to 60 percent in coming years as the bloc expands to include former Soviet satellite states in Central and Eastern Europe.

EU membership will require Eastern and Central European countries to bring their economic and trade legislation in line with EU standards, which could mean new hurdles for Russian producers.

"The most important concern on the Russian side is highly justified, that of EU trade policy being applied to yet another eight or 10 countries, many of them important Russian trading partners," said Erik Berglof, director of the Stockholm Institute for Transition Economies. "The EU's choice of protectionist tools, in particular the use of antidumping measures, is also particularly damaging to Russia and has hit the country where it hurts the most."

While this will hurt some major Russian companies, like steel and machine manufacturers, some say its biggest effect will be on smaller scale producers.

EU candidate countries in Eastern and Central Europe account Europe account for about 20 percent of Russian Exports. According to ING Bank Eurasia, raw materials account for 75 percent of that total. Oil and gas make up 50 percent, according to the bank.

"We do not expect a substantial impact in the short run resulting from trade with the new EU members," said ING Bank Eurasia general director Hendrik Ten Bosch.

That was the case with Finland, currently the only EU member bordering Russia. Finland joined the EU in 1995. Russian export volumes have remained constant since then. Oil, gas make up the lion's share of exports to Finland.

The EU' s interest in little more than Russian energy resources, which would only intensify with the additional states, adversely affects the development of the Russian economy, some say.

Many observers see benefits for Russia from EU expansion. Some say EU extension could theoretically even help Russian exporters of European-standard goods.

"EU tariff barriers are lower on average than existing barriers in Eastern Europe," said Christopher Granville, chief strategist at United Financial Group. "Thus technically, Russian companies could have a larger export capability, but in real life things are a lot more complicated and regulations could change. The overall effect of EU expansion will be minimal."

But although EU tariffs are lower than current European tariffs, Russian goods may still lose their competitiveness in both these regions after EU expansion. Current tariffs between the EU and Eastern Europe will disappear with EU expansion, making each regions' goods more competitive relative to Russian goods within the expanded EU market.

EU regulations may single out goods entering Eastern Europe, but they can't single out investors. And in Eastern Europe, where Russia-phobia has shown itself at tenders for major state property, Russian investors should see a more level playing field.

Hugo Erikkson, head of public relations at oil major Yukos, said some of these countries have been reluctant to welcome Russian investments. "Under EU regulations, these countries can't discriminate," he said. "They have to treat all investors as equals and that gives Russian companies new opportunities."

Expansion gives Russian companies with assets in Eastern Europe access to the entire European market, analysts say. Some say this could pull Russian investors into Eastern Europe.

Analysts are quick to point out that the chances Russian companies will be able to take advantage of such opportunities right away are minimal. Competition in the EU market is already fierce, they say.

However, expansion could have positive consequences for Russian companies beyond dollar figures and market share.

Eastern European politicians and economists will be able to bring their knowledge of Russia to the decision-makers at the EU headquarters in Brussels, some analysts say. Russia will also slowly become integrated into the EU culturally as it plows more investment into the EU member states in Eastern Europe. Russian companies operating there will have to adopt EU business standards and ethics.

But that is a double-edged sword for Russia. EU regulations demand greater transparency in financial transactions than currently exist in Eastern European countries, and that may scare off some Russian companies.

Moscow has expressed fears that EU expansion may erode trade with Eastern Europe, but observers sat that breakdown has for the most part already taken place. EU expansion could only enhance those former Soviet trade contacts by strengthening Eastern European economies, they say.

Economists expect Western European nations to pour money into Eastern Europe after expansion to take advantage of the cheaper labor force. That should lead to stronger economic growth in the region, including parts of Russia.

"Russia will gain from any increased economic well-being in Eastern Europe following enlargement, both in terms of increased demand for Russian products and appreciation of Russian assets in these countries," said SITE' s Berglof.

Those Eastern European countries that looked westward following the fall of the Soviet Union may look eastward after EU expansion. And that could pull the EU and Russia closer together.

"Eastern European consumer goods producers will have to fight with Western European producers on the EU market and their chances of success are not very good. The long-term tendency will be for Eastern European countries to export more and more to Russia, and this will strengthen EU-Russia relations."

Notes:

to account for (phrasal verb) – to compose to constitute: The elderly account for an increasing proportion of the population.

clout (U) – influence, especially political: Its massive export earnings give the company a lot of clout with the government.

ramification – 1. (usually plural) a branch of a system that has many parts; part of a network: ramifications of a business of a railway system 2. Any of a large number of results that follow from an action or decision: What are the ramifications of our decision to join the union?

the Stockholm Institute for Transition Economies (SITE) – Стокгольмский институт экономики переходного периода

hurdle – a difficulty to be overcome, an obstacle: political and economic hurdles standing in the way of progress

to pull something together (phrasal verb) – to improve something by organizing it more effectively: We need an experienced manager to pull the department together.

Active Vocabulary:

to affect – воздействовать на что-либо, влиять, затрагивать (интересы)

to affect the atmosphere – повлиять на атмосферу/обстановку

to affect public opinion – оказать влияние на общественное мнение

to affect privileges/immunities – затрагивать привилегии/иммунитеты

to affect somebody' s interests – затрагивать чьи-либо интересы

to affect a resolution – оказывать влияние на принятие резолюции

to affect the situation – оказать влияние/воздействие на обстановку

to apply – 1. обращаться с просьбой, просить, подавать заявление 2. применять, использовать 3. применяться, быть применимым, касаться, относиться

to bring something in line with something – приводить что-либо в соответствие с чем-либо

clout – ударная или пробивная сила; большое влияние (особенно политическое); власть

to exercise diplomatic clout – осуществлять дипломатический нажим

the President's clout on Capitol Hill tends to sag – влияние президента на конгресс, вероятно, ослабнет

to enhance – повышать, увеличивать, усиливать, углублять

to enhance international peace – укреплять мир между всеми государствами

to enhance security/stability – укреплять безопасность/стабильность

to enhance deterrence – повысить эффективность сдерживающих/устрашающих средств

to enhance the operational reliability of the station – повышать эксплуатационную надежность станции

impact – 1. влияние, воздействие 2. последствие, результат

well-being – благосостояние

to ensure a rise in the well-being – обеспечить подъем благосостояния

to improve the well-being of ... – поднять благосостояние ...

well-being of mankind – благосостояние человечества

well-being of the nation – процветание всей страны

Exercise 1. Give English equivalents:

усиливать влияние на развитие экономики; иметь благоприятные последствия в сфере экономики; приводить в соответствие с европейскими стандартами экономическое и торговое законодательство; применять антидемпинговые процедуры; оказывать большое влияние на мелких производителей; улучшать экспортные возможности; повышать конкурентную способность экспортных товаров; развивать инвестиционные программы; интегрироваться в структуры Европейского Союза; укреплять торговые связи; осуществлять дипломатический нажим; повышать эксплуатационную надежность станции; процветание всей страны; повысить эффективность сдерживающих/устрашающих средств; обеспечить подъем благосостояния; приводить что-либо в соответствие с чем-либо; затрагивать привилегии/иммунитеты; повлиять на атмосферу/обстановку; оказать влияние на общественное мнение; укреплять безопасность/стабильность; оказывать влияние на принятие резолюции; оказать влияние/воздействие на обстановку

Exercise 2. Give Russian equivalents:

to strengthen

to strengthen one's position, to strengthen the leading role of the party, to strengthen political links, to strengthen ties of friendship and cooperation, to strengthen a draft resolution, to strengthen the defense capability of the country, to strengthen the political clout in the region

to apply

to apply for agreement, to apply for membership, to apply for visa, to apply to the competent authorities, to apply international agreements, rule 124 does not apply to the proposal, to apply antidumping measures

to enhance

to enhance the reputation, to enhance the position, to enhance efficiency, to enhance power and influence, to enhance international peace, to enhance security/stability, to enhance deterrence, to enhance the operational reliability of the station

to affect

the tax increases have affected the people's welfare; the opinion will not affect the opinion; the change in climate may affect the health; to be deeply affected by the news of the death; cancer has affected lungs; the worst affected areas are the Midlands and North-West; to affect privileges/immunities; to affect somebody' s interests; to affect a resolution; to affect the situation; to affect the atmosphere

Exercise 3. Give Russian/English to the following the word combinations to go with the word impact:

impact

1. to add, to assess, to cushion *, to diminish, to exaggerate, to exert, to feel, to have, to make, to lessen, to offset *, to realize, to reduce, to resist, to soften, to take into consideration, to weigh impact

2. actual, considerable, decisive, direct, disturbing, evident, extensive, familiar, full, great, horrifying, immediate, initial, limited, major, marked, massive, maximum, minimal, painful, negligible, potential, powerful, real, revolutionary, serious, severe, slight, strong, terrific, tremendous, widespread impact

3. сила воздействия на общественное развитие; оказывать воздействие на ход переговоров; возможное влияние на отношения; уменьшить влияние в регионе; последствия быстрой перемены; влияние разоружения на экономику; экономическое воздействие; воздействие на окружающую среду; оказывать влияние на общественное мнение; воздействие рекламы; влияние на промышленность; сильное воздействие; налоговое влияние

to cushion*- 1. to reduce the force or unpleasant effects of; to cushion a blow – смягчить удар: Nothing can cushion the shock of the tragedy. The training program helps to cushion the effects of unemployment. 2. (against) to protect from hardship or sudden change: He was cushioned against inflation by his government pension.

to offset* (offset, offsetting) – to make up for, to compensate for; to balance: The cost of getting there was offset by the fact that the hotels are so cheap. He offset his travel expenses against his tax.

Exercise 4. Paraphrase the following italicized words or word combinations and explain the meaning using a dictionary if necessary:

1. The political clout in the region is expected to strengthen and its influence on Russian economic life is set to grow. 2. But although the political ramifications of EU extension are considered damaging for Russia, the economic consequences are far from being a black-and-white, win-or-lose situation. 3. EU membership will require Eastern and Central European countries to bring their economic and trade legislation in line with EU standards, which could mean new hurdles for Russian producers.4. EU candidate countries in Eastern and Central Europe account for about 20 percent of Russian Exports. 5. Moscow has expressed fears that EU expansion may erode trade with Eastern Europe. 6. Russia will also slowly become integrated into the EU culturally as it plows more investment into the EU member states in Eastern Europe. 7. Economists expect Western European nations to pour money into Eastern Europe. 8. That could pull the EU and Russia closer together. 9. EU regulations demand greater transparency in financial transactions. 10. Gas make up the lion's share of exports to Finland.

Exercise 5. Pay attention to a frequent usage of the conjunction ”But.” Read some preliminary information about the use of Conjunctions which can play different roles in English:

Conjunctions are divided into general classes.

1. Coordinate conjunctions (сочинительные союзы), which connect words, phrases, and clauses of equal rank: as, and, likewise, in like manner, but, nevertheless, yet, however, on the contrary, or, nor, therefore, hence, according, etc.

2. Subordinate conjunctions (подчинительные союзы), which are used to introduce subordinate clauses and connect them with the words which they modify: as, if unless, although/ though, since, for, so, so that, in order that, as if, as though, etc.

“But”

But is ordinarily a coordinate conjunction (сочинительный союз вводит противоречащие или ограничивающие друг друга слова и предложения и соответствуют в русском языке союзам “но”, “а”, “тем не менее”, “однако”), but may also be used in the following ways:

1. as a preposition, equivalent to except (предлог but переводится русскими предлогами “кроме”,”за исключением”): They had no alternative but to agree.

2. as an adverb, equivalent to only (соответствует русским ограничительным частицам “лишь”, “только”: We have but a few copies left. You have but to ask for it. They can but try.

The last sentence is not to be confused with “They cannot but try”, in which but is a preposition. This expression seems to be due to ellipsis of “They cannot do anything but (except) try.”

The expression cannot help but is an incorrect form resulting from a confusing of two correct forms: “They cannot but try,” and “They cannot help trying.”

3. as a relative pronoun, equivalent to that – not, who – not: There is no one but pities him ( who does not pity him).

4. as a subordinate conjunction, equivalent to but that or that – not: There is no doubt but they are rich (but that they are rich).

There is no doubt but they are rich (but that что they are rich). Нет сомнения, что они богаты.

I do not doubt but that you are surprised. -Я не сомневаюсь, что вы удивлены.

I cannot deny but (that) you are right. – Не могу не отрицать, что вы правы.

I didn’t know but you might be tired.

It never rains but it pours.

He never goes to the theater but he regrets.

But приобретает другие значения в составе сочетаний таких как:

but for – без, кроме; если бы не; all but – почти, чуть не; anything but – далеко не; все, что угодно, только не; и т.п.

But for you we shouldn’t have finished the work in time – Без вас (если бы не вы) мы бы не окончили работу вовремя.

He all but fell – Он едва (чуть) не упал.

It is anything but pleasant – Это далеко (вовсе) не приятно.

You can but try – Во всяком случае (по крайней мере) вы можете попробовать.

I can but hope – Я могу только надеяться.

I cannot but suggest – Не могу не предложить.

We cannot but hope he is right – Нам остается только надеяться, что он прав.

I cannot help but think – Не могу не думать.

But then – Но зато; но с другой стороны.

Last but one – предпоследний.

“But that”

But that is used as subordinate conjunction.

I don’t know but that I shall go.

I have no doubt but that he will come. Я не сомневаюсь, что он придет.

In these sentences, but emphasizes the idea in the subordinate clause – it implies greater certainty that what is said there is true or will occur. Compare the following sentences without but.

I don’t know that I shall go.

I have no doubt that he will come.

Note: But what should not be used for but that. The sentence, “I don’t know but what he will do it, ”is incorrect (say but that). In general, but what is correct as a connective only when but that which can be substituted for it (what is equivalent to that which: thus, “I do not know anything but what he told me”(but that which he told me).

Translate the following sentences identifying the functions and the role of but:

1. But after the breakdown of negotiations over the EU’ s new constitutional treaty at the Brussels summit , the task of center-right coalition in Europe looks more formidable * still.

2. Free movement of workers across borders is a basic EU policy. But it poses problems of scale when the EU is gaining ten countries, with a combined population of 75m that have wage levels and living standards far below the 15 existing member countries (and 280m people). Cyprus and Malta apart, the new members include eight central European countries with an average income per head of only 23% of the EU average in 2001. That figure falls to 18% if Bulgaria and Romania, which hope to join in 2007, are added. Given such a big gap, and high unemployment in many of new countries, the question should perhaps not be why so many workers might want to leave, but why so many might choose to stay.

2. Under the EU treaties each of the 15 member countries – to be 25 as of the next May – takes it in turn to be “president” of the Union for a period of six months. This system of rotation was set up to ensure that everybody had a crack at managing the EU’s internal agenda and at representing the Union to the outside world. But it can be a recipe for incoherence and confusion. Foreign leaders are treated to an endlessly changing cast of presidents, each of whom approaches the job with different priorities and personal styles. Naturally, the presidency is meant to reflect the consensus of opinion within the EU as a whole. But president can launch initiatives, act as a spokesman for the Union and draft the diplomatic statements that are issued at the end of each big European summit.

3. But, as ever in the Berlusconi era, the real concern is not their objective merits but their subjective intention – which seems to be to undermine Mr. Berlusconi’s attackers.

4. But the three Baltic countries find it irritating to be tagged as ‘tiny’.

5. Over the next 12 months Gerhard Schrцder, the German chancellor, and Jacques Chirac, the French president, carefully coordinated their positions on all big international and European issues. But now a new year has dawned; it appears that the old couple no longer have eyes * only for each other. On February 18^th Mr. Schrцder will host a summit in Berlin. The guests will be Mr. Chirac, naturally, but also Britain’s Tony Blair.

6. The immediate outcome of the Berlin summit is likely to be unexciting. Expect guff about the urgency of economic reform and the need for progress on the EU’ s new constitution. But the meeting is still important, because it may be part of an emerging pattern.

8. But a senior British diplomat counters that it would be a mistake for Britain to rely too heavily on the new close relationships with the Italian, Polish and Spanish governments. If the left were to return to power in Italy and Spain, for example, those countries might well revert to their traditionally federalist views and fall in behind France and Germany. Britain might then be left high and dry *. “It’s not that we’re switching horses,” explains the diplomat. “But we’re trying to ride several horses at once.” Britain needs its ties with the “new” Europeans; but not at the expense of an estrangement * from France and Germany.

9. But what is in it for the French and Germans? There are still officials in Paris and Berlin who believe that any flirtation with Britain is bound to end in tears. In the end, they reason, the British will always be incorrigibly pro-American and suspicious of the EU. But others think the British may be tempted into a more “European” position, particularly on defense, if only they are treated with more respect.

The current stock phrase in Berlin is that Franco-German agreement is a ‘necessary, but not a sufficient condition’ for moving the EU forward.

10. But the new members must also fear that, having striven so hard to join the EU, they may discover that the real decisions are increasingly taken elsewhere.

11. Poland, along with nine other countries, mostly from central and eastern Europe, will formally join the EU in may, but all have been included in the constitutional debate as they will be full members when any constitution comes into force.

12. To make the point that Germany is thinking of European rather than national interests in pressing for the new constitution, German diplomats are now recounting a key moment in the Brussels summit. Searching for a compromise, Silvio Belusconi, the Italian prime minister who was chairing the talks, suggested to Gerhard Schrцder, the German chancellor, that rather than moving to a voting system linked to population, Germany could simply have more votes within the current system: perhaps more votes, giving Germany 32 votes, against 29 each for France, Britain and Italy, and 27 each for Poland and Spain. Mr. Schrцder, dismissed this angrily: the point. He said, was not to increase German power, but to give the EU a more rational system of government. Maybe so. But then a population-based voting system is even more advantageous to Germany.

13. Even diligent and legal migrant workers from central Europe could pose political problems for western European governments, if they come in large enough numbers and seem to price locals out * jobs. But they will still be valuable economically, because they are likely to contribute more in work than they take out in * pay.

14. Once a policy initiative is launched by a presidency, it is then up to the European Commission to propose ways of turning it into law. In most cases the European Parliament will be involved in amending any proposals. But final shape of the law is usually decided by EU countries meeting in the Council of Ministers. Here the presidency can have a crucial influence by discerning “consensus”, drafting compromises, or delaying discussion.

15. Brutal it may be. But there is not a lot the European Central Bank can do about the appreciation * of the euro.

to have eyes for sth (idiom) * – be a good judge of or have a proper sense of sth: He has an eye for a bargain; обладать наблюдательностью; быть знатоком чего-либо; знать толк, разбираться в чем-либо;

high and dry (idiom) * – in difficult position, unable to continue normally: Her husband has left her high and dry without money;

estrangement *- отчуждение; разрыв;

formidable * -(task) невероятно трудный; устрашающий; грозный;

to price out * (phrasal verb) – завышать цену чего-либо; ценить (себя) слишком;

to take out in *(phrasal verb) – компенсировать долг не деньгами: When he broke the window , the owner let him take it out in garden work.

appreciation * – повышение курса валюты.

Exercise 6. Study the notes and translate what follows with the word far (the Economist, The Guardian 2004):

Far is used for emphasis. Normally, far combines with comparative/superlative forms: far better (намного лучше, гораздо лучше), far the best. This edition is far (=a lot) different (совершенно другой) from the earlier one.

Far combines with verbs like prefer and would rather. I far prefer swimming to diving.

1. If the Turkish side now agrees to a version of the Annan proposals, the onus * will then fall on the Greek Cypriots, who are far from enthusiastic about the plan.

2. Thus, polls suggest that Americans are far more sympathetic to Israel than Europeans and also more open to the use of military force. Some Europeans complain that American policymakers, preoccupied by the Middle East, take a cavalier approach to some extremely sensitive issues, such as Turkish membership of the EU. One German analysts groans “as far as the Americans are concerned, the discussion over whether Turkey should join the EU is already over. Now they want us to accept Israel, Palestine and Georgia”.

3. The euro area is also far from blameless. Policymakers wring their hands * about “brutal ” rise in the euro zone, yet the euro is still close to fair value against a basket of currencies. If Europeans are worried that a stronger euro will hurt their economies, then the solution is simple: The European Central Bank should cut interests rates to boost demand.

4. Meanwhile, at the present stage of cooperation with the European Union, which is far from ideal, the government and private companies are running into serious difficulties.

5. Americans have long seen Europe as the old world. Now they have another reason to count the difference. Europe is ageing far more faster than the new world. The old world faces a daunting demographic challenge. This year’s expansion of the European Union from 15 to 25 countries increases its population from 380m to 455m – way ahead of America’s 295m. Yet by 2050, the United States will have almost caught up: if forecasts prove correct, there will be 420m Americans, compared with Europeans.

6. Compare what the EU has now with what it will get in the new constitution, and the document passes with flying colours. It is far more coherent than its predecessors.

7. It is a good constitution, which sets the right framework for a reformed and effective EU, and deserves a far better support.

8. At their Brussels summit last year EU governments agreed on a security strategy that went far beyond the issue of Europe. They recognized that fortress Europe was unworkable and immoral. “The post-cold war environment is one of increasingly open borders in which the internal and external aspects of security are indissolubly linked,” the strategy document says. Implicitly rejecting the Bush concept of military preemption, it calls for “preventive engagement,” by which it means European action to help countries return to democracy, or build it, before military threats arise.

9. Far more than the conventional goals of improving airlift capacity or ensuring national weapon-systems are inter-operable, Europe needs brain and sensitivity if it is to be respected as a new global player.

onus * – бремя, ответственность

to wring one’s hands *- крепко пожимать руки

Exercise 7. Answer the questions keeping close to the text:

1. What are the consequences of the EU 's expanding for Russia?

2. What are the expected drawbacks of the EU's expanding for Russia?

3. What are the expected advantages of the EU' s expanding for Russia?

4. Express your position (your agreement or disagreement) on some issues.