The EU and Russia are engaged in an open conflict over their joint neighborhood. Yet, curiously, the EU never intended to get into a geopolitical confrontation with Russia. Quite the opposite—it sleepwalked into it.

But now the stakes are too high for both sides to back down. Both sides see the conflict as vital, and it is shattering fragile relations between Russia and the West. How did they stumble into a confrontation that the EU, at least, wanted to avoid? Why is this conflict so intense? And what have both sides learned so far from the confrontation?

Core Interests at Stake

The EU has two vital interests at stake in the current conflict with Russia. First is a stable and prosperous neighborhood in the East. The second is Russia’s respect for the ultimate taboo of Europe’s peace order—the prohibition against changing borders by force. For a bloc that is founded on accords between states, upholding the rule of law in international agreements is vital. And to see a powerful country invading and annexing the territory of a weaker neighbor for Europeans brings back memories of a darker age of ruthless competition.

In addition, the longer the open confrontation lasts, the more not losing becomes an important goal in itself, as the EU’s credibility as a united and powerful actor on the international scene is on the line.

What is at stake for Russia is its position as a great power, which in the Russian view implies dominance over the post-Soviet space. A state that cannot even control smaller and weaker neighbors is, from the perspective of classical power politics, not even a regional power. Losing in Ukraine would be seen in Russia as a humiliation, especially after Kremlin-controlled Russian media have strongly beaten the drums of war. And without Ukraine, Moscow’s Eurasian Union project is unlikely to gain traction.

Both sides have unique instruments at their disposal in the struggle over their joint neighborhood. Russia can attract states mainly by offering low energy prices in return for closer relations. It can also threaten states with trade restrictions and bans as well as with military force (in traditional and “hybrid” forms, as it did in Crimea). And it uses a sophisticated propaganda apparatus to paint the EU and, even more, the United States as enemies who are threatening Russia.

The EU, meanwhile, attracts its neighborhood mainly by offering access to its huge common market and a joint space defined by principles of liberal democracy. The bloc has, however, long been hesitant to develop forceful instruments to bring its Eastern neighborhood into closer association. It was not until 2009 that the EU—reluctantly—agreed to put a bit more energy into its European Neighborhood Policy by adopting the Eastern Partnership initiative.

The Eastern Partnership

The Eastern Partnership, in which partner states are meant to eventually sign a free trade agreement and a wide-ranging association agreement with the EU, was conceived of by Polish Foreign Minister Radosław Sikorski in 2008. It was built as an offer of closer relations with six countries of Eastern Europe and the South Caucasus—Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine—following the Russia-Georgia war of August 2008.

Sikorski had proposed the Eastern Partnership to Frank-Walter Steinmeier, German foreign minister from 2005 to 2009 in a grand coalition led by Chancellor Angela Merkel (and in the same position again since December 2013), but Steinmeier declined to make it a joint initiative. Sikorski then decided to launch the initiative with Swedish Foreign Minister Carl Bildt. Together they managed to convince the EU to give the project the green light.

But the Eastern Partnership never had the full support of the strongest member states. They were reluctant to engage because of various fears—of increasing their financial burden and the perspective of opening up markets (especially the labor market) to new and economically very weak entrants, of another heated debate within the EU over further enlargement, and of a confrontation with Russia.

Indeed, one reason Steinmeier declined to join Sikorski was that he had just proposed a modernization partnership to Moscow. Engaging with EU neighbors in the post-Soviet space appeared to threaten the German attempt to deepen relations with Moscow.

Germany’s support for the Eastern Partnership was always halfhearted at best. Merkel provided some rhetorical backing before the November 2013 Eastern Partnership summit in Vilnius, Lithuania, calling on Russia to accept Ukraine’s sovereign right to choose its alliances. But neither Berlin nor other big member-state capitals sent clear signals to the Kremlin that the EU was ready to confront Russia over the right of countries in the post-Soviet space to associate themselves more closely with the EU.

When Moscow began to put pressure on Ukraine and Moldova in summer 2013 using embargoes and bans, the EU failed to respond in a resolute way that might have convinced Russia that the union and its powerful member states were ready to make Russia pay a price for sabotaging the Eastern Partnership. When Armenia suddenly stopped its process of EU association in September 2013, apparently under pressure from Moscow, EU leaders just shrugged; no EU government made an effort to change Yerevan’s mind. And the promise of EU accession—the strongest carrot—has never explicitly been offered to Eastern Partnership states (it hasn’t been excluded either, though).

Meanwhile, Central European EU member states were much more eager than their Western neighbors to move ahead with the Eastern Partnership. Poland was the main driver. Warsaw found a strong ally in the European Commission, especially in the person of Štefan Füle, a Czech diplomat and European commissioner for enlargement and neighborhood policy. And Germany was willing to support Polish initiatives to a certain extent in the context of the Polish-German rapprochement that has taken place in the last year.

The Maidan as the Trigger

From a “postmodern” EU perspective the Eastern Partnership looked like a win-win project to all sides concerned. For years, the EU hoped that it could indeed have both: a closer association with the Eastern neighbors and unshaken relations with Russia. Moscow would profit as well from a stabilized neighborhood. And Eastern countries could continue to engage with both sides equally, becoming a kind of bridge between the EU and Russia.

Yet, Russia has never shared this view. For Moscow, the Eastern Partnership always looked like a hostile takeover. It set up a counterinitiative, a Eurasian customs union—later to become the Eurasian Union—and confronted the countries of Eastern Europe and the South Caucasus with an either-or choice. Membership in the customs union is per definition incompatible with the deep and comprehensive free trade agreements that the EU has sought to sign with Eastern states.

Still, the conflict between Russia and the EU over the neighborhood seemed to be avoidable, as Russian President Vladimir Putin’s attempts to undermine the Eastern Partnership appeared to be successful. Armenia was brought into the Russian camp, apparently balking in the face of significant pressure from Russia. (One of the country’s pressure points is its fear of losing Russian support in the struggle with energy-rich Azerbaijan over the disputed territory of Nagorno-Karabakh.) And in Ukraine Putin managed to push then president Viktor Yanukovych to make a U-turn in November 2013 and cancel his country’s process of EU association shortly before the Vilnius summit began.

At that point it looked as if Russia had won what it defined as a geopolitical struggle. Of the six Eastern Partnership countries originally in line to sign association agreements and free trade agreements with the EU, only Georgia and Moldova would have remained on track. Whether Moscow would have interfered to prevent the signing of the agreements or would have taken a longer-term approach to undermine the Western course was an open question. Both countries are vulnerable, especially because they have breakaway regions on their territory (Transnistria in Moldova, South Ossetia and Abkhazia in Georgia) that Russia supports. The governments’ struggles with these regions suck up enormous political energy and give Moscow plenty of leverage and potential to destabilize these countries.

But then came what nobody had expected: the popular movement on the Maidan in Kiev, a huge and powerful pro-EU demonstration, pushing the country back into the Western sphere. To many Ukrainians, association with the EU held the double promise of getting rid of both predatory, corrupt elites and Russia’s stranglehold. They were not ready to accept that their country’s turn westward had been suddenly stopped.

This bottom-up movement set off a chain of events that ended with an open and sharp confrontation between Russia and the EU. Yanukovych was forced to leave the country. Russia invaded and annexed Crimea, then started to destabilize Ukraine’s east by using proxies. The EU, massively challenged, had no choice but to take sides against Russia in a struggle for European values, provoked by a Russia that was undermining core principles of Europe’s peace order. Germany acted as the primary interlocutor for the EU in a conflict that drew in both the bloc and the United States, which agreed to jointly put diplomatic pressure on the Kremlin and threaten Russia with massive economic sanctions.

Limits of Confrontation

Still, the EU remains very reluctant to move with full steam toward a confrontation with Russia, for a number of reasons: Economic ties are strong, especially in energy, finance, and the arms industry. Western European countries are less concerned about Russian aggression and want EU attention to instead move toward the Southern neighborhood. Some EU members fear being confronted with a Russia that appears to be driven more by emotion than by rational considerations. And European governments cannot ignore sections of the public that sympathize with Russian action (partly driven by values that they feel are supported by Russia, partly driven by the wish to balance U.S. influence by moving closer to Russia).

While leaders on the EU side face the challenge of mobilizing support for a more confrontational stance toward Russia, Moscow must recognize that its means are limited and that it cannot win against an EU even if the bloc is reluctant to engage in the competition. It has had to repeatedly lower its goals, from full control of Ukraine to spreading instability in some Ukrainian regions. Now it seems that Moscow’s aim in Ukraine is to prevent the emergence of a stable liberal democracy that is firmly anchored in the EU, an outcome that would minimize Moscow’s ability to influence Ukraine’s political course and that would call into question Russia’s own model of governance.

Beyond Ukraine, Russia has Georgia and Moldova to think about. In both countries it is unclear to what extent the Kremlin is going to use its leverage to block or undermine their attempts to build closer ties with the EU; both signed agreements with the EU on June 27.

The EU is locked into a difficult geopolitical conflict with Russia that it absolutely wanted to avoid. While a new iron curtain has not descended across the continent, it is clear now that the EU and Russia live in different worlds, a divide that is becoming ever harder to bridge.

In the struggle over Ukraine, both sides have lost illusions, about themselves and about the other. The EU understands now that it has to back up foreign policy with substantial power—in a world that is much less “postmodern” than Europeans have hoped for in the past, a world that still largely looks at the international system in the terms of classical power politics. It also understands that Russia is not interested in the kind of partnership Europeans—guided largely by Germans—have proposed for two decades.

Russia, meanwhile, has found out that it is much less attractive to states in the neighborhood, especially in Ukraine, than it had hoped. And it has learned that when faced with a vital challenge, the EU can be a much tougher opponent than the Kremlin might have expected: EU member states, under German leadership, have managed to uphold a credible threat with massive economic sanctions for months, and they have built and upheld a common approach with the United States.

This more realistic understanding of strengths and weaknesses may over time open up the possibility for Russia and the EU of new forms of cooperation on some issues, with the two powers at the same time confronting one another on other issues. Instead of taking the form of a broad partnership and a comprehensive inclusion of Russia into Western structures, this cooperation is likely to be limited to clearly defined areas.