Table of Contents

The United States and European countries have a history of cooperation on Eastern Europe, the Western Balkans, and Russia that dates back to the end of the Cold War. The transatlantic partners have collaborated by extending institutions and alliances to embrace newly sovereign countries, pursuing diplomatic and military engagement to prevent and end conflict, and providing financial support for Euro-Atlantic integration.

After a challenging four-year interlude, the election of Joe Biden as U.S. president offers the Europeans and Americans an opportunity to restore their cooperation in the region. Specifically, Brussels and Washington can step up their efforts by providing a firmer anchorage to countries that are still fragile and undergoing change, especially on supporting democratic reform and anticorruption, and by addressing more effectively the unsolved statehood issues and ongoing conflicts that still pervade the whole region.

Permissive Environment for Disruptive Actors

Rosa Balfour
Rosa Balfour is director of Carnegie Europe. Her fields of expertise include European politics, institutions, and foreign and security policy.
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Ostensibly, the administration of former U.S. president Donald Trump did not halt the shared commitment to shaping post–Cold War Europe. European-U.S. coordination on sanctions to condemn Russia’s 2014 annexation of Crimea was not interrupted. Despite disagreements on other issues relating to the North Atlantic Treaty Organization (NATO), the United States supported North Macedonia joining the alliance in 2020.

However, under the Trump administration, the ability of U.S. and European officials to act in concert to influence governments from Georgia to Ukraine on a range of issues depended on the initiative of individual ambassadors. In some places, such as Ukraine, coordination has halted.

Thomas de Waal
De Waal is a senior fellow with Carnegie Europe, specializing in Eastern Europe and the Caucasus region.

The Trump administration also supported a permissive environment for other actors to disrupt Euro-Atlantic cooperation. In some cases, the United States was even a disruptor itself: in Ukraine, Trump attempted to coerce the government into undermining Biden’s credibility as a U.S. presidential candidate, while in Serbia and Kosovo, the United States sought alternative arrangements to the European Union (EU)–sponsored dialogue between Belgrade and Pristina to solve the bilateral relationship between the two countries.

In this environment, China, Russia, and Turkey have gained an influence in Eastern Europe that is commensurate neither with their own material investments in the region nor with the EU’s; the union and its member states together are by far the largest donor and investor in the Western Balkans.1 China, Russia, and Turkey have promoted disinformation and pursued grandstanding diplomacy—including the so-called mask diplomacy at the start of the coronavirus pandemic, when Beijing shipped medical supplies around the world in an effort to raise its image as a responsible global player.

Russia has close relations with the Western Balkans, especially as a military partner of Serbia and the almost sole energy provider of Bosnia and Herzegovina, North Macedonia, and Serbia. Although Russia’s financial investment in the region is far behind the EU’s, Moscow is widely perceived as Belgrade’s closest ally.

Turkey’s overseas development aid to Eastern Europe has grown exponentially in the past few years alongside its foreign investment, trade, and financial support for Muslim centers of worship.2 China has been trying to fill the infrastructural gap in the region and extend its Belt and Road Initiative to Europe’s closest neighborhood. According to Serbia’s infrastructure ministry, China has obtained contracts in the region worth €5.5 billion ($6.7 billion) for the construction of highways and railroads.3 This type of engagement pays dividends: according to a spring 2020 survey, Russia and China were the most popular international actors in Serbia, viewed favorably by 71 percent and 68 percent of Serbians, respectively.4

Aside from being the EU’s closest neighborhoods and, by and large, those most dependent on its support, Eastern Europe and the Western Balkans are also areas where competition with Russia and China plays out. The convergence between the United States and Europe on commitments to this part of the world can be mutually reinforcing if the two sides avoid the risk of broader rivalries. The best way forward is for the EU to double down on its obligations. This would include resolving the union’s internal contradictions on rule-of-law standards, anticorruption strategies, and commitments to enlargement and economic integration and stepping up the EU’s role as a conflict mediator.

The Return of a Reliable Partnership

When it comes to Eastern Europe, as in other areas, the Biden administration holds out the promise for Europeans of more reliability, competence, and professionalism. But given longer-term trends in U.S. foreign policy and the many other challenges the new administration will face in the world, there needs to be realism about how deep engagement will be.

An end to the personal and transactional agendas of the previous U.S. administration will allow for stronger coordination with the EU. It will be possible for the United States to reengage with conflict resolution efforts and a democracy promotion agenda—even though the Trump administration tarnished U.S. credibility when it came to promoting the rule of law and clean elections.

Stronger engagement with Eastern European countries would benefit from reform of the Organization for Security and Cooperation in Europe (OSCE)—a challenge on which the United States, Canada, and EU member states need to coordinate well to see it through. Europe would benefit greatly from a well-functioning and strengthened OSCE as the one pan-European organization in which all relevant countries, including Russia, are members and regional crises can be debated.

Currently, however, the OSCE is in crisis, and its four top leadership posts were vacant for the second half of 2020. For the organization to function properly, reform is needed to correct its flaws. That means giving the leadership structure more power, removing the ability of any one member to veto any decision, and increasing the organization’s budget. This can be a joint project for EU member states and the incoming U.S. administration, which together can exploit the opportunity offered by the appointment of Helga Schmid, one of Europe’s top diplomats, as secretary general of the OSCE.

The OSCE oversees three post-Soviet conflict resolution processes: in eastern Ukraine, Transdniestria, and Nagorny Karabakh. The last, which is the remit of the OSCE Minsk Group, needs some urgent attention. In September 2020, Europeans and Americans were virtual bystanders as Armenia and Azerbaijan went back to war over the disputed region of Nagorny Karabakh. After a brutal conflict that lasted six weeks, on November 10, Russia brokered a ceasefire deal in coordination with Turkey that allowed for Russian peacekeepers to be deployed to the region. Despite paying lip service to multilateral diplomacy, the truce seemed designed to limit the involvement of France and the United States, the other two co-chairs of the Minsk Group, to supporting Russian diplomacy while helping deliver humanitarian assistance and resettle internally displaced people.

The November 10 truce does not contain many elements that would have been part of a more international agreement. Armenia-Azerbaijan normalization is still far off. There is no provision for addressing human rights abuses. Nor is there any new mechanism to resolve the disputed status of Nagorny Karabakh itself.

Making the process more fair, inclusive, and multilateral is a difficult task—but one that the United States and European leaders can attempt in coordination. Together, they can bring that effort to the leaders in Baku and Yerevan to empower the two capitals to identify their core interests toward each other—and not just follow an agenda set in Moscow and Ankara.

Democracy Promotion and Anticorruption

With the Biden administration in office, a democracy promotion agenda for Eastern European countries can get back on track. This will be especially important in countries like Georgia and Moldova, where the United States has leverage. In the Western Balkans, the United States can lend its weight in support of reform, although only credible backing for democratic reform within the EU accession process will give Brussels some traction.

The Biden presidency should allow for a stronger EU-U.S. focus on Ukraine, as was the case until 2017: as U.S. vice president, Biden oversaw Ukraine policy and visited the country six times. Euro-Atlantic coordination can help manage Ukraine’s perennial crises, such as the current conflict over the country’s constitutional court, which in October 2020 ruled to delegitimize Ukrainian anticorruption agencies. A closer transatlantic approach can also help balance the security and reconciliation agendas in the conflict in Ukraine’s eastern Donbas region.

The U.S. administration has already signaled its intent to pursue a tougher anticorruption policy.5 Crafting an effective strategy to tackle endemic corruption—better called kleptocracy—is perhaps the biggest policy challenge in Eastern Europe. The problem is especially acute in Moldova and Ukraine. The U.S. policy response has been much weaker since 2017.

On the domestic front in Ukraine, a tougher coordinated EU-U.S. policy can offer strong support to those organizations that are leading the fight against corruption; these include the nongovernmental Anticorruption Action Center and the beleaguered National Anticorruption Bureau of Ukraine.

Europe and the United States can do much jointly to curtail money laundering and abuse of the Western financial system by corrupt figures from countries such as Azerbaijan, Moldova, and Ukraine who use shell companies and other opaque schemes to hide illicit money. But first, more robust approaches are required from the transatlantic partners. Under the Trump administration, the United States weakened its anticorruption policies. The EU is struggling to persuade member states to comply with its 2018 directive obliging them to publish the beneficial owners of firms registered in their jurisdictions.6

A coordinated push by the EU and the United States to enforce transparency of beneficial ownership would not end corrupt practices. But it would set a global standard and make it harder for corrupt figures to hide their illegally acquired wealth.

Rethinking Russia

The transatlantic partners’ Russia policies are badly in need of an intelligent rethink—but not necessarily a reset. Better coordination between the Americans and Europeans would allow them to take a stronger stand when Russia is in aggressive mode in Ukraine or engages in episodes such as the poisonings of former Russian spy Sergei Skripal and opposition leader Alexei Navalny in 2018 and 2020, respectively. Europe and the United States can adopt a joined-up policy on sanctions toward Moscow because of its actions in Ukraine; that policy can include clear messages about what Russia needs to do to have sanctions lifted.

At the same time, the U.S. administration needs to recognize that European countries have a stronger economic relationship with Russia. For example, moving to cancel the planned Nord Stream 2 pipeline, which would bring natural gas from Russia to Germany under the Baltic Sea, is primarily a political issue for the United States, while in Germany, it is also an economic question.

Finally, there are different Russias in different contexts—and Moscow is an unavoidable partner on issues such as arms control, Transdniestria, or Nagorny Karabakh. What the transatlantic partners need is not so much an overarching strategy as political agility vis-à-vis Russia.

Across Eastern and Southeast Europe, perhaps the chief challenge for European capitals and Washington is to respond to rapidly evolving crises with the same determination and speed that Russia shows in these circumstances, from the Caucasus to Ukraine to the Western Balkans.

Notes

1 Mario Holzner and Monika Schwarzhappel, “Infrastructure Investment in the Western Balkans: A First Analysis,” European Investment Bank and Vienna Institute for International Economic Studies, September 2018, 11–15, https://www.eib.org/attachments/efs/infrastructure_investment_in_the_western_balkans_en.pdf.

2 Mehmet Uğur Ekinci, “Turkey and the Western Balkans: Stable Relations and Deepening Cooperation,” in Turkey and Transatlantic Relations, edited by Sasha Toperich and Aylin Ünver Noi (Washington, DC: Center for Transatlantic Relations, 2017), 167–175.

3 Michal Makocki and Zoran Nechev, “Balkan Corruption: The China Connection,” European Union Institute for Security Studies, July 2017, https://www.iss.europa.eu/sites/default/files/EUISSFiles/Alert%2022%20Balkans.pdf.

4 “Serbia: Public Opinion Research,” National Democratic Institute, March–May 2020, https://www.ndi.org/sites/default/files/serbiapollspring2020%20May%20NDI_PUBLIC%20v7.pdf.

5 Amy Mackinnon, “Biden Expected to Put the World’s Kleptocrats on Notice,” Foreign Policy, December 3, 2020, https://foreignpolicy.com/2020/12/03/biden-kleptocrats-dirty-money-illicit-finance-crackdown/.

6 “Patchy Progress in Setting Up Beneficial Ownership Registers in the EU,” Global Witness, March 20, 2020, https://www.globalwitness.org/en/campaigns/corruption-and-money-laundering/anonymous-company-owners/5amld-patchy-progress/.