Russia's pointed refusal to stop backing the Syrian regime may have attracted the most attention during talks Monday at the G-8 summit in Ireland, but the economic deals it is striking at the G-8 and elsewhere demonstrate what is really important to Moscow. Russia is using the Syrian crisis to divert the West's attention while it strengthens its position in Central and Eastern Europe and with other European powers like Germany and the United Kingdom.
Though the summit is ostensibly about economic matters — it is attended by the leaders of the top eight global economies, meaning the United States, United Kingdom, France, Germany, Italy, Canada, Japan and Russia — the Syrian conflict still seemed to dominate the discussion. Russian President Vladimir Putin held sideline meetings with most of the G-8 leaders, though Putin's meeting with U.S. President Barack Obama was the most anticipated. Going into the two-hour Putin-Obama summit, the White House claimed that Obama would work on convincing the Russian leader to stop supporting Syrian President Bashar al Assad's regime. Coming out of the summit, it was obvious that the two sides remained as divided as they were going in.
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The Russians have no incentive to drop their support for al Assad, and are actually in a strong position concerning Syria and the West. This is because the United States has no real appetite to seriously escalate its involvement in Syria. Last week, Washington did give ambiguous pledges to increase assistance to the main armed wing of the Syrian opposition, but the United States continues to be constrained by the difficulty of intervention and concerns that regional spillover could prove worse than the status quo. Already, the Syrian war has become a battle between a host of international players, including Iran, Saudi Arabia, Turkey and, indeed, the United States and Russia.
Russia knows that the United States is loath to get more involved in the Syrian civil war and Putin's very public refusal to reconsider Moscow's support for al Assad was probably intended to draw attention to Washington's unwillingness to do more itself. Russia firmly rejected any U.S.-backed no-fly zone over Syria, something Washington was already wavering on to begin with. And Putin colorfully condemned foreign arming of Syrian rebels, saying, "One does not really need to support the people who not only kill their enemies, but open up their bodies, eat their intestines in front of the public and cameras."
While Russia seems to be in a strong position against the West over Syria, the real importance of Russia's position globally has nothing to do with the Middle East. For Russia, the center of its international focus lies to its west, in Europe. Russia is only as strong internationally as it is within Europe. Currently, Europe is undergoing a political fragmentation that is fraying the social and economic bonds of people on the Continent. In the absence of European unity, Russia sees a window of opportunity to take advantage of these divisions.
Russia's strength lies in the fact that it is one of the few sources of investment, resources and technical expertise interested in striking economic deals and picking up struggling assets in Europe. Moscow is focusing specifically on Central and Eastern Europe, as well as the major European players who help mold the dynamics on the Continent.
But Russia knows that it cannot act too aggressively or too publicly, as any large forays into Europe will be met with fear of Russia trying to rekindle its Cold War dominance of the region. So instead, Russia is mostly either quietly going about its efforts or even attempting to portray itself in a position of weakness.
For example, Russia is undergoing a series of energy renegotiations across Europe, in which Russia has already slashed prices on natural gas exports by approximately 10 percent and is now renegotiating another 7-10 percent discount for the coming months. On the surface, Russia looks to be in a position of weakness, as it is perceivably being forced into such concessions due to more competition for Russian natural gas on the market in the near future. However, even if there are major constraints to Russian energy, Russia is using these re-negotiations to lock many countries into long-term contracts, and is still holding prices well above mid-2000s levels. Russia is also quietly picking up assets in Central and Eastern Europe, though not the high-profile state firms in most cases, but instead subsidiaries or shells in order to avoid attracting attention.
In addition, Russia is striking various large deals in strategic countries that are not as Russo-phobic as many Central and Eastern European states. Just before the G-8 conference, Putin spent two days in London meeting with several top businessmen and politicians. During that time, Russia signed a deal paving the way for Russia to start building nuclear power plants across the country, which is traditionally France's role. This deal comes after British energy giant BP dipped deeper into Russia's energy sector, taking a piece of Russian state oil firm Rosneft and launching projects across the country. Last week, a Russian energy delegation was also in France to add to Total's growing investments across Russia. In addition, later this week Russia will host the St. Petersburg Economic Forum, in which German Chancellor Angela Merkel will attend with a large German business contingent.
Gaining access into Central and Eastern Europe and striking deals with strategic large European states is part of Moscow's overall plan to weaken European unity, especially along Russia's borderlands. Russia does not want to call attention to this, however, and instead would rather the world focus on an issue, such as Syria, which at the end of the day has relatively less impact on Moscow.
Editor's Note: A previous version of this Diary misstated the composition of the G8, which is attended by the leaders of the United States, United Kingdom, France, Germany, Italy, Canada, Japan and Russia.