How should Europe respond to Russia? The Dutch view

26 Feb 2015 - 10:08
Source: Flickr / Amanda Graham

The Netherlands-Russia year, held in 2013 to celebrate 400 years of diplomatic ties, highlighted the long-standing economic and cultural relations between the two countries. The Dutch have consistently combined excellent economic relations with Russia with a broader critical dialogue, which has included discussions on politically sensitive issues such as human rights. Balancing the two has always been difficult, often leading to tensions in the relationship. Whether economic diplomacy or human rights gets priority tends to depend on the political orientation of the Dutch government in office. The government has regularly been tempted to leave the more critical aspects of the dialogue with Russia to the European Union. However, the Dutch parliament has always ensured that human rights (including LGBT rights) and rule of law issues have been given their proper place in the relationship with Russia, reflecting the strong tradition of support for international and humanitarian law in Dutch politics. This also explains why the Netherlands has always been an active participant in international organisations such as the United Nations, the Council of Europe, and the Organisation for Security and Cooperation in Europe.

The Netherlands is one of Russia’s main trading partners (in 2013, trade exchanges totalled €27 billion) and provides a sizeable amount of Russia’s foreign direct investment, including reinvestment by Russian companies. This is in part explained by the favourable tax conditions for foreign companies in the Netherlands. Oil and gas and other energy products constitute the most important element in the two countries’ trade relations. Dutch company Shell is a major investor in Russia, including in a large LNG project in Sakhalin. And the Dutch natural gas infrastructure and transmission company Gasunie has a close partnership with Russian state operator Gazprom, which led to Dutch participation in the Nord Stream pipeline project. (Moreover, the former CEO of Gasunie heads the South Stream pipeline project’s Amsterdam office). Finally, Rotterdam is the main transit port for Russian oil and oil products, and Russia has plans for investment in downstream facilities in the port area.

Respect for international law and support for the post-war security order are important principles in Dutch foreign policy. Therefore, when the Ukraine crisis broke out, the Netherlands strongly condemned Russia’s annexation of Crimea and Moscow’s support for the destabilisation of the Donbas. The Netherlands worked closely together with the EU and other international partners on the issue. When sanctions were discussed in the EU, the Netherlands followed Germany’s lead as the main international mediator in the conflict; like Germany, the Netherlands at first did not favour imposing stronger economic and financial sanctions, in part because of its own economic interests in Russia.

The downing of civilian airliner Malaysia Airlines MH17, in which 196 Dutch people were killed, was an enormous shock for the Dutch public at large and a game changer for Dutch relations with Russia. From that moment on, it became clear that there could be no quick return to “business as usual”. The Dutch (including the Dutch business community) became convinced that, in crafting an appropriate response to Russia’s destabilisation of eastern Ukraine, tougher sanctions could no longer be avoided.

At the same time, the fact that the international investigation into the MH17 crash was to be carried out under Dutch leadership meant that the Netherlands sought no direct confrontation with Russia at this stage. The Dutch have tried to remain as neutral as possible until the final result should emerge. (The report by the Dutch Research Council on Transport Safety will probably be published this summer; the investigation by the prosecutor general’s office will take more time.)

In the Dutch view, the prospects for EU-Russia relations depend primarily on whether Russia contributes to de-escalation and to finding a political solution to the Ukraine crisis. Russian cooperation in the Donbas could eventually lead to the sanctions being downscaled; on the other hand, frustration with lack of results in German-led mediation efforts could easily lead to even more economic sanctions. And Minsk II has not presented any reason for renewed optimism.

The Dutch do realise that sanctions by themselves do not constitute a comprehensive policy. They believe that a broader bilateral and multilateral approach is needed.

Foreign Minister Bert Koenders has talked about a new approach to Russia based on three elements:

  • “Muscle”: reassuring East European NATO partners. The Dutch are contributing actively to NATO air policing above the Baltic states and to NATO’s Response Force, with around 2,700 military personnel.
  • “A clenched fist”: keeping targeted sanctions in place until Moscow starts working towards de-escalation in the Donbas and/or gives up Crimea (There are two separate sets of sanctions: even if Russia decides to cooperate on the Donbas, the Crimea-related sanctions will remain in force).
  • “An open hand”: the Netherlands will maintain a critical dialogue with Russia as equal partners and based on mutual respect. Some continuation of constructive engagement can be expected, with the Dutch working to save as much of the economic relationship as possible and keeping up cooperation in areas such as education, science, and civil society.

It remains to be seen how far re-engagement with Russia is possible; much will depend on the outcome of the Ukraine crisis. The Dutch will closely watch efforts to restart work on a free trade agreement from Lisbon to Vladivostok, possibly in connection with a new dialogue between the EU and the Eurasian Economic Union. The Dutch will also support re-engagement in the context of strengthening the OSCE, if that is the outcome of the Panel of Eminent Persons report due by the end of this year.

Dutch political circles and society are still broadly in consensus on the Netherlands’ Russia policy. Although this is good in itself, the understanding of Russia in the Netherlands could be described as a little shallow. Overall, the Dutch still seem to believe that Russia will eventually make a successful transition to a modern law-based economy and society. However, developments in recent years point in a fundamentally different direction. So, the Dutch could be in for more nasty surprises in the coming years. But in this, they are certainly not alone.