(L-R) European Commission President José Manuel Barroso, Czech President Vaclav Klaus and Russia's President Dmitry Medvedev talk during a Russia and the European Union summit in Khabarovsk
The location may have been the first hint. The 23rd European Union-Russia summit on Friday was held in the Russian Far East city of Khabarovsk, a former Tsarist army outpost just a few dozen miles from the Chinese border and 5,000 miles east of Western Europe. The location seemed more aimed at inducing jet lag and awe at Russia's size than at forging agreement on energy, an issue that has consistently soured relations between the two powers over the past months — and which the summit failed to resolve.
While the site implied that Russia was not ready to budge on any of the issues on the table, Russian President Dmitri Medvedev made the point exceedingly clear. "The Russian Federation has not given any assurances and will not give any," he said after requests from the European side that the January gas crisis — when Russia cut off supplies to Ukraine for over a payment dispute — not be repeated. Although smiles abounded and the talks were held at the Musical Comedy Theatre, just off Khabarovsk's main Karl Marx Prospekt, the tone was one of disagreement. (See pictures of Russians celebrating Victory Day.)
The major sticking point was Ukraine's place in the gas supply chain between Russia and Europe, and the country's role in the January gas war. In the coming months, Ukraine will have to spend $4 billion to buy the 19.5 billion cubic meters of gas it requires to fill its storage reservoirs before the cold comes again. But how it will afford the purchase from Russia remains unclear. "We have doubts about the solvency of Ukraine," Medvedev said, according to Russian news agency Interfax. "We are ready to help Ukraine, but we would like to see much of this work taken up by the European Union, that is, by those who are interested in the reliability and security of energy cooperation."
In response, head of the European Commission, José Manuel Barroso said that the two parties involved in the dispute should be the ones to settle it: "We have asked Russia and Ukraine to do everything they can to avoid such crises. It would not be good for the overall climate of relations if such a crisis happened again." Barroso was part of a delegation that included E.U. foreign policy chief Javier Solana and Czech President Vaclav Klaus, whose country holds the E.U. presidency. (Read: "Vaclav Klaus: "The Man with the E.U.'s Fate in His Hands.")
Medvedev said Russia could help with some of the cost, but not all. "When it comes to credit, let us help syndicate the corresponding money for Ukraine, but this should not be only Russia doing this," he said. "At the end of the day, it is not us who have problems paying." Yet, observers see Medvedev's comment as more of a barb than as a viable suggestion. "I would be surprised if the E.U. felt that [helping Ukraine purchase gas from Russia] was an appropriate use of their funds," says Niall Trimble, director of The Energy Contract Company, a consulting company based in England. "In order to rebuild relations, Russia needs a period of uninterrupted supply for a significant time. Action always speaks louder than words and the Russians do have a little bit of work to do."
But Trimble acknowledges that, even amid the quarreling, the summit showed some hope: "Russia has a good track record. They were always seen as a very reliable supplier. There is no reason to believe the problems can't be resolved. I think the chances are pretty good that gas will continue to run."
The E.U. also lost its bid to convince Russia that a consortium to manage Ukraine's pipeline system should be exclusively controlled by the E.U. Another sticking point was the Energy Charter Treaty, adopted in 1991, that integrated the energy sectors of the former East Bloc into Europe. Russia has sought to "ensure that the Energy Charter ceases to be the basis for the energy dialogue between the E.U. and Russia in the future, and to emphasize the need for new ad hoc arrangements in the format proposed by Russia," says Dmitry Orlov, head of the Agency for Political and Economic Communications, a Moscow-based think tank. During the talks, Medvedev reiterated that Russia would not participate in the current version of the document. Because of Medvedev's steadfastness, Orlov believes the E.U. is "now ready to consider new positions on energy questions." (See TIME's special package on the Russia-Georgia war.)
Words were also traded between the two sides concerning the place of Georgia in current defense architecture. Russia remains suspicious about security frameworks expanding into its Soviet-era sphere of influence.
Though no major breakthroughs were made during the summit, there were also no major collisions. "Expectations that the summit would only cause troubles and fruitless discussions were wrong," says Nikolai Petrov, an analyst at independent think tank The Carnegie Moscow Center. "It looks like it wasnt extremely successful, but it wasn't a failure." Referring to past E.U. conferences that have been held in remote Russian cities, he adds: "If anything, this was a continuation of E.U. field trips into Russia's deep countryside."
For those who experienced the bite of the cold during Russia and Ukraine's gas row last winter, they can only hope an agreement between the two sides is not as far off as Khabarovsk is from Brussels.