MOSCOW – “Plus ca change, plus c’est la meme chose” – the more things change, the more they stay the same.
After Russian President Vladimir Putin attempted to make the most of two summit meetings in a week with European leaders, it’s time to remember the dictum coined by Frenchman Alphonse Karr more than a century ago. Karr was a writer whose reputation fell into oblivion once he retired from Paris to Nice. There he cultivated, among other things, a species of bamboo to which his name has been attached in botanical encyclopedias.
Karr’s wit deserves to be better remembered than that. There was the time, for example, when a barbed publication he had aimed at Louise Colet, the occasional lover of writer Gustave Flaubert, led the lady to attack Karr with a knife. Karr had the weapon mounted in a case and displayed with the label, “Given to me by Madame Colet in the back.”
It’s never improper to remind European Union functionaries such as Romano Prodi (former Italian premier and current president of the European Commission) that their stabs in the back are not exactly forgotten; moreover, that their posturing toward Russia last week was a case of “plus ca change”. Of course, though, it is up to the Russian leadership to demonstrate that it can remember Prodi’s economic record. At the start of this year, at the insistence of Europe’s steelmakers, the EU sabotaged Russian steel exports by a sudden change in its steel quota regime. For a time in January, this left more than 80,000 tons of Russian steel products in limbo, unable to be shipped from Russian ports, or unable to be delivered out of customs warehouses on the European side of the border. That problem was resolved, but by a change in the terms of the EU-Russian steel trade regime that had not been negotiated in advance, and that was decidedly disadvantageous to Russian exporters. Compared with last year’s terms of trade, this makes Russia worse off. It is therefore simply untrue, as Prodi’s underlings kept claiming in Moscow, that the European restrictions on Russian steel were being reduced and removed.
Prodi’s announcement that the EU would grant market-economy status to Russia was also misleading. It was more than three years ago that the EU modified the rules for its anti-dumping investigations so that Russian exports could be valued, according to Russian, rather than surrogate country prices, on a case-by-case basis. All Prodi did last week was to call that decision by another name.
It is therefore premature of Russian industry analysts and the domestic media, let alone Putin’s sidekicks, to claim a significant gain worth dozens of millions of dollars to Russian exporters. Naturally, Prodi’s announcement had a price, which will hurt more Russians than it will benefit from purported trade gains. This is the increase that the EU is demanding in Russian utility rates, especially for electricity and gas. Those are the inputs that the EU claims are subsidizing Russian exports, and leading to dumping price margins. Prodi’s offer requires Russian prices to rise – a point the Kremlin has yet to explain to those on whom the price increases will fall heaviest.
It’s not possible here to explain the dozens of demands the EU is pressing on Russia in the negotiations now under way in Geneva for Russia’s eventual accession to the World Trade Organization. What is surprising, however, is that the Kremlin, and trade officials such as German Gref and Maxim Medvedkov, are trying to conceal these demands, as well as the concessions they say they may accept, at least behind closed doors.
Don’t misunderstand me. I don’t believe the European countries will or should abandon their economic interests to be charitable toward Putin. If it were not for the secrecy on which, to date, the Kremlin insists, it would be possible to see more precisely whether Putin’s terms call for charity, or something better. However, someone seems to have convinced the Russian president that he should always appear to be agreeing with the leaders of Europe (and the United States), and that, for domestic consumption at least, the appearance of agreement is better than the substance.
The Russian polls don’t substantiate that advice. Instead, they show that Putin’s approval rating rises and falls with real domestic income. If wage arrears rise, his approval declines. By the end of April, an improvement of payments out of the federal and other budgets, plus a reduction in wage obligations owed by private enterprises, helped sustain approval of Putin’s performance at the high end of its historical range.
However, rising inflation and falling nominal and real wages in April have produced a warning. Voter trust isn’t the same thing as approval, and it is now clear that trust in Putin has slipped toward the low end of its historical range. It was 36 percent in April, compared with 52 percent last December.
In short, Putin is no longer as convincing as he once was. Voters may generally approve what he does, in the absence of practical alternatives and articulate opposition. But what Putin says is no longer as trusted by Russians as it used to be. The conduct of last week’s negotiations with the North Atlantic Treaty Organization and the EU show why this is happening. If Kaliningrad was the only point of disagreement which the Russian leadership chose to disclose, little wonder most Russians suspect their interests are at risk.