Economic Relations Between Visegrad Group Countries and Russia: How Much Has Changed?

Dangerfield, Martin (2015) Economic Relations Between Visegrad Group Countries and Russia: How Much Has Changed? [Conference Proceedings] (Submitted)

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Abstract

Introduction: Economic relations between EU member states and Russia have been strengthening steadily since 2000, especially after the EU eastward enlargement. The importance of Russia as an export market means that disruptions caused by sanctions are not only potentially costly but also contentious. Effects upon individual EU states vary due to the extent of trade with Russia and other important indicators of interdependence (such as energy sector integration). This paper focuses on the three ‘small’ Visegrad states’ – the Czech Republic, Hungary and Slovakia – which have all been at the forefront of the EU export boom to Russia. They have also been amongst those EU countries that have expressed strong reservations about the use of economic sanctions against Russia and the leaders of Hungary and Slovakia have been amongst the most vocal critics of this aspect of the EU and US response to Russia’s actions in Ukraine. In August 2015, a day after Slovak Premier Robert Fico had stated that ‘meaningless’ EU sanctions were damaging economic growth in the EU, Hungarian Prime Minister Viktor Orban said that the West’s sanctions policy “causes more harm to us than to Russia…in politics, this is called shooting oneself in the foot” (Szakacs, 2014). The Russian government apparently regards Hungary as one of its main allies in the struggle to avoid renewal of EU sanctions in March 2015. In December 2014 it was reported that Moscow had “begun lobbying what it sees as sympathetic EU capitals – Budapest, Nicosia, and Rome – to veto next year’s renewal of Russia sanctions” (Rettman, 2014).On February 17 this year Orban hosted Vladimir Putin in defiance of the EU ban on bilateral summits with the Russian President. Meanwhile a few days earlier Czech President Milos Zeman, who has tended to take Russia’s side throughout the Ukraine crisis, called for the lifting or easing of sanctions against Russia following the ‘Minsk 2’ peace deal. Though a division between views of President and views of government in the Czech Republic is often claimed, on January 15 this year Czech minister of industry and trade Jan Mládek stated that “(o)ur primary goal is to maintain exports to Russia. Diversification of exports is desirable, but we must do it with a humble mind, knowing that it is a long and costly affair. Therefore, it is important for us to keep on staying on the Russian market” (Czech Ministry of Industry and Trade, 2015).

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