Over the past fifteen months, something fundamental has changed in the relationship between Russia and the European Union. The great disillusionment over Putin’s decision to return to the Kremlin; the rise and fall of the Russian protest movement; the targeted repression of opposition activists and the passage of new restrictive legislation in Russia; the Pussy Riot scandal; the U.S. Magnitsky Act and the Russian response to it have severely impacted the atmosphere of the EU-Russia relations. The hopes Europeans nurtured during the Medvedev years of a gradual top-down democratic evolution for Russia are now remembered, bitterly, as a hoax.

Disillusionment and disgust are powerful emotions but they are not terribly useful as one sets out to map a way ahead for relations with Europe’s biggest neighbor. Now is the time to assess the new reality soberly before making new steps.

The point of departure is the recognition that it is not just the atmosphere but the political landscape that has changed. Russia is clearly turning more nationalistic. Patriotism has become a valuable political commodity in Moscow. This goes beyond Putin and the Duma: important sections of the business community and society at large are leaning towards the same direction. As a consequence, they view Europe’s recent record more critically and question where it is going. Having rejected Europe as a mentor some time ago, these influential quarters are now also rejecting Europe as a model.

At the level of foreign policy-making, Europe is no longer assumed to be part of Russia’s extended family. While some still talk of a “Greater Europe,” the center of gravity is no longer on integration with the EU; it is on strengthening economic, security, and political ties with the former Soviet states. The “European choice,” boldly proclaimed by Vladimir Putin at the German Bundestag in 2001, has been replaced, a decade later, by a “Eurasian choice,” signifying a Moscow-led integration with its willing neighboring countries. A “Greater Europe” is still possible, Putin clarifies, but only as a binary construct in which the EU and a future Eurasian Economic Union would participate on an equal basis.

This change alters the agenda and the Leitmotif of the relationship, with elements of convergence and contention more or less in a dynamic balance. On energy, building new gas pipelines—from North Stream 3 and 4 to South Stream—will be accompanied by more intense arguing over the terms of gas trade in Europe. On visas, the positive aspect is that ordinary Russians will still want to travel to Europe. Any attempt, however, to relax visa requirements will be resisted by several European countries who remain anxious over Russians coming over here. This, in turn, will breed Russian resentment over Europe’s unfair treatment of their country and its citizens. On human rights and values, contention prevails: the Kremlin has not only acknowledged the values gap, but has proudly proclaimed its own set of values, such as national sovereignty; religious faith as a foundation for society’s morals; and support for the traditional family.

In the realm of geopolitics, expansion of the European Union and NATO into the former Soviet territory has not only stopped for the time being, but has ceased to be the only game in town. Putin’s proposed Eurasian Union is not a USSR Redux, as Secretary Clinton has recently stated—aiming perhaps for a new career—but it is the first serious effort in 20 years at meaningful economic integration, with obvious political and security implications. It is also clear that Putin wants to reach out beyond Belarus and Kazakhstan which already form a customs union and a single economic space with Russia. He has recently signed agreements with Kyrgyzstan and Tajikistan to strengthen his hand vis-à-vis China in Central Asia, and he is certainly working to bring Uzbekistan, the region’s heavyweight, closer to Moscow.

It is Ukraine, however, which promises to become the stage of the most intense competition between Moscow and Brussels. Had Ukrainians decided to reform their economy and moved to bring their political system closer to Europe, there would be no competition: the EU would have won hands down. But the Ukrainian elite is deeply mired in its old ways and has no real incentive to modernize. This puts Ukraine in a precarious position. Continuing a balancing act between Moscow and Brussels will be ever tougher for Kyiv whose partners will press it for a definite answer as to Ukraine’s geopolitical orientation. In any event, the EU needs to decide now how it wants to engage Ukraine in a situation where Russia is the other credible suitor.

Finally, on the issues of the global order and regional security, Europe and Russia, while sharing a number of important general interests, diverge on ways of dealing with actual contingencies. Syria is a case in point, where Moscow—for the first time in two decades—has not only complained about Western practices of military intervention and regime change, but has actually stood up for what it believes is the right approach. Thanks to Russian support, Bashar al-Assad has been able to hold on to power, while Moscow is discussing the future of Syria directly with Washington. That is something the world has not seen in two decades. The Russian position, however, is not ideological: Moscow has just approved the French military intervention in Mali.

Given this new environment, the way ahead for the EU in its relations with Russia needs to be based on the following elements:

  • Expecting—and bracing oneself for—several more years of Putin in power;
  • Appreciating the complexity of the Russian Awakening, which has a strong nationalist element to it;
  • Being prepared to compete with Moscow on a broad range of issues: from energy to values to geopolitics;
  • Being ready to engage with Moscow on matters of common interest, and on a more co-equal basis.

This means a big change from the time when the EU was the main driving force in western Eurasia and Moscow was seeking some form of association with it. The new environment brings discomfort to Europe. The upside—if one wants to look for a silver lining—is that, by competitively/cooperatively interacting with Russia, while at the same time reshaping itself internally, Europe may acquire elements of strategic power it presently lacks in its relations with the United States, China, India—and, of course, Russia.