EU insists Russia signs partnership deal

The European Union insisted yesterday that Russia sign a key agreement on trade and other issues before the bloc's enlargement on May 1 to "avoid a serious impact on relations".

The EU's ties with Russia are governed by a Partnership and Cooperation Agreement (PCA). Brussels wants the PCA to apply automatically to the 10 countries due to join in May - eight of which are former Soviet bloc states - from the day they join.

Moscow has resisted, fearing it will lose trade and other privileges it already enjoys with its closest neighbours.

"The Council (of EU foreign ministers)... emphasises that the PCA has to be applied to the EU-25 without pre-condition or distinction by 1 May 2004," the council said in a statement of conclusions on Russia.

"To do so would avoid a serious impact on EU-Russia relations in general. The EU is open to discuss any of Russia's legitimate concerns over the impact of enlargement, but this shall remain entirely separate from PCA extension."

French Foreign Minister Dominique de Villepin said extending the PCA was "a position of principle".

"What was valid for the 15 is valid for the 25," he told a news conference while the debate on Russia was still under way. "Our Russian friends have got to understand this."

The EU has long had concerns over Moscow's war in Chechnya and on human rights, leading to frequent strains in relations.

But the wrangling over the PCA has added a new source of tensions, with EU officials saying the bloc could retaliate with sanctions if Russia applied different trade terms on goods from new EU states than on those from the current 15.

If Russia and the EU fail to agree on the PCA by May 1, there will be no formal basis for ties between the two major trade partners. The EU is a huge buyer of Russian oil and gas, the mainstays of Russia's economy.

Polish Foreign Minister Wlodzimierz Cimoszewicz and his Danish counterpart Per Stig Moller said in an article in the Wall Street Journal Europe yesterday that extending the PCA to the EU-25 was essential.

"The agreement is the basis for the EU-Russia relationship... and it is therefore inconceivable that it does not cover the entire EU, including its newest members," they wrote.

"If Russia is not able to accept the enlargement of the European Union, Russia questions the basis of our strategic partnership."

The EU has been seeking a more coherent policy towards Russia since a disastrous summit in November, when Italian Prime Minister Silvio Berlusconi praised Moscow's handling of the war in Chechnya and its arrest of a leading oil tycoon.

Italy then held the rotating presidency of the bloc, so Mr Berlusconi was speaking with the authority of the Union, even though his remarks were at odds with EU policy, leading the bloc to reassess its ties with Moscow to ensure a common position.

Yesterday's discussion on Russia was based on a communication drawn up this month by the EU's executive Commission, and on a new text prepared by the bloc's Irish presidency.