Small is Feasible: Pondering the Future of EU-Russian Relations
Fabrizio Tassinari and Marius Vahl
The European Union and Russia are preparing to negotiate a new comprehensive agreement at a time when their bilateral relations have become increasingly prickly. On the one hand, Vladimir Putin's Russia is perceived as having gone undesirably far in reverting to a semi-authoritarian state and in exerting economic and political pressures on some pro-Western, former Soviet states. On the other hand, the EU's Russia policy remains ambivalent because of the continuing deference towards Moscow of a number of large European countries and the confrontational posture of some new EU member states. Other factors add to this deteriorating state of affairs. For one, there are a number of legal complications coming from the shape and scope of the new agreement. Perhaps more importantly, there are several political uncertainties, first and foremost the definition of those "common values" upon which the new treaty should be based. To get out of this quandary, the two sides will have to scale down their ambitions on the new agreement. A mutually acceptable formula might imply the negotiation of a concise "framework" treaty, accompanied in due time by sector-specific agreements.
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The Turn to Statism in Russian Economic Policy
Philip Hanson
Since 2003, state control in the Russian economy has increased significantly. This has affected mainly but not only the oil industry. This policy development gives some grounds for concern about Russia's long-run growth. Its origins lie in power struggles within the political elite, in efforts by members of that elite to enrich themselves and in a profound distrust on the part of that elite of any sources of power that they do not themselves control. One result is that business confidence has been dented, the growth of oil output has slowed, and future GDP growth depends more heavily than before on further growth in oil prices.
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Return to Heartland: Russia's Policy in Central Asia
Anna Matveeva
Reversing the retreat of the Yeltsin era, Russia has returned to Central Asia proactively. Its presence is increasingly felt in the traditional - that is, security - field and in new fields of engagement, such as strategically-placed investment or construction of regionalism. The cultural and "civilisational" role has also gained more prominence. Moscow's policy reflects pragmatic opportunism, aimed at getting the utmost benefits for Russia from a region in which it holds many assets rather than at a revival of the former empire. There are limits however as to how far its engagement can go due to constraints posed by Central Asian realities and Russian domestic developments. So far, the advance has been greatly facilitated by the West's retreat, giving rise to perceptions of an unfolding "great game", while in reality a record of both competition and cooperation between Russia, China and the West is a normal state of affairs. Although Central Asian elites find it easier to deal with Moscow in the current political climate, they view its assertive role with caution and may turn to a rival suitor should the price for the relationship with Russia become too high.
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The German Presidency and the EU's Constitutional Malaise
Andreas Maurer and Daniela Schwarzer
The "pause for thought" decreed by the heads of state and government for themselves and their citizens after the voters in France and the Netherlands rejected the Treaty Establishing a Constitution for Europe has been extended for at least another year. By the end of 2008, decisions will have to be taken on how to continue the reform process, yet a concrete strategy for implementing the Constitutional Treaty or an alternative treaty still appears out of reach. Before even beginning to agree on how to move forward, all 27 European Union member states will have to state clearly what goals they are pursuing in the process of institutional reform (a process which all sides agree is necessary) and what steps they believe are required for achieving these goals. In this context, clear statements on the importance of the Treaty and its fate are needed. Consensus on these issues among all 27 member states is unlikely to be achieved. In order to foster a constructive discussion, the German EU Presidency could move member states to agree on shared criteria for assessing the reform proposals that are on the table, and on the options for resolving the constitutional crisis.
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An EU Outlook on the Future of the Kyoto Protocol
Thomas Legge
The European Union has low expectations for the international climate regime after 2012, when the Kyoto Protocol effectively expires. The United States is not thought likely to sign up to new binding international commitments, whereas EU countries have experienced unexpected difficulties in implementing existing commitments. As a consequence, the European Union may be prepared to settle for a surprisingly weak follow-up to the Kyoto Protocol. At the same time, the European Union will pursue bilateral and regional climate agreements with like-minded countries, parallel to the UN framework and possibly independently of it. Collectively, such agreements could produce an international climate regime that is more robust than what could be agreed at the consensus-based UN level. Nevertheless, the European Union will continue to support the UN process as the only legitimate forum for international negotiations on climate change.
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The Development Dimension of IMF Lending Policies
Domenico Lombardi
The debate on the role of the IMF in low-income countries has recently gained strength in light of the commitment by the international community to support achievement of the Millennium Development Goals by 2015. The IMF fulfils an important role as an information provider to low-income aid-recipient countries and their bilateral donors, who consider Fund signals as a useful device in their allocation decisions. The IMF also provides lending to low-income countries through the Poverty Reduction and Growth Facility (PRGF), established in 1999. The PRGF was designed to address earlier criticism claiming that IMF lending programs to low-income countries had privileged stabilisation over poverty-reducing growth through financial arrangements that had shown little ownership by those countries. The PRGF was meant to support a balanced macroeconomic framework in which low-income economies could pursue growth-enhancing measures with relevant poverty-reducing effects, reflecting policy priorities put forward by the countries themselves. Based on the available evidence, PRGF-supported countries have recorded a favourable growth performance vis-à-vis non-PRGF-supported countries, although the extent to which this outcome has translated into poverty reduction has yet to be assessed.
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Opinions

Analytical Perspectives on the War in Lebanon
Volker Perthes
The summer 2006 war in Lebanon can be perceived through at least five different frames of reference. The US administration saw the war in Lebanon as a local manifestation of the global war on terror. According to this framework, Hezbollah is an Al Qaeda-type enemy, not a national group with a local agenda and constituency; bargaining with Hezbollah is not possible. This point of view makes fighting global terror more difficult and jeopardises the search for stability and peace in the region. Many Israeli and European politicians saw the war as a confrontation between radical Islam and a modern Israeli state, a clash of cultures between Islamic fundamentalists and Western civilisation. This frame of reference, however, fails to recognise the fault line within the Muslim world itself, between those who want to integrate their societies into a globalised world and those who do not. The conflict in Lebanon can also be interpreted as a consequence of the weakening of a state, a framework which underlines the need to strengthen Arab institutions, or as an asymmetrical war between an armed nation state and a guerrilla movement. Finally, the war in Lebanon can be seen as a conflict over power, land, resources and sovereignty - the classic realist perspective. If the international community fails to work toward a comprehensive peace settlement in the Middle East, another framework will gain strength in the Arab world: one that interprets events according to a theory of non-negotiable conflicts between Western imperialism and radical Islamic resistance.
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The EU in Somalia: Furthering Peacemaking and Reconciliation
Mario Raffaelli
Since the Transitional Federal Institutions were established after the 2002 Nairobi Conference, the situation in Somalia has seen two drastic about-turns - in opposite directions. In June 2006, starting out from Mogadishu, the Islamic Courts rapidly extended their control over most of south-central Somalia. Now, after the Ethiopian military intervention, the Transitional Government is trying to establish itself in the capital and to effectively exercise its formal authority for the first time. But the military defeat of the Courts has not solved the problems that initially made their success possible. Only reconciliation can create real stability and the European Union can contribute to achieving this. A peaceful and stable Horn of Africa is in the EU's interest, given the risks of it becoming a breeding ground for Al Qaeda-like organisations and a source of immigration. Somalia could also become a test case for solving the problems of a failed state by peaceful means, and an example of the EU's willingness and ability to have an effective dialogue with the Islamic world. Success in Somalia would strengthen the EU as a regional player with Arab and Muslim countries.
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Italy in World Affairs

How to Change Your Foreign Policy in 100 Days: A New Course with Prodi?
Elisabetta Brighi
Conventional wisdom has it that the new government of Romano Prodi managed to effect a significant "shift" in Italy's foreign policy away from the course of the centre-right in the proverbial first 100 days of government. A number of discontinuities with the foreign policy of the Berlusconi government have been invoked, ranging from Italy's relations with Europe and its transatlantic posture, to its engagement with areas of crisis such as the Middle East. But these claims have to be substantially qualified. In fact, it appears that the foreign policy of the Prodi government has rather pragmatically blended elements of change and continuity, and that the shift which has occurred in some areas should be understood more as a combination of domestic and international developments than a result of the change in government alone. Moreover, in order to really change Italy's foreign policy - and change it for the better - the government should focus on a different set of priorities, mainly the institutions, instruments, politics, and ideas of foreign policy.
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Book Reviews

Does the EU have a Value-Driven Vision of the World?
Sharon Pardo
Review of: Values and principles in European Union foreign policy, edited by Sonia Lucarelli and Ian Manners, Routledge, 2006
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American Hegemony Demands a Different Kind of Leadership
Emiliano Alessandri
Review of: Liberal order and imperial ambition : essays on American power and world politics, G. John Ikenberry, Polity, 2006
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The US and the EU: An Alliance with no Alternative
Gianni Bonvicini
Review of: Alleanze alla prova : Europa e Stati Uniti tra cooperazione e conflitto. a cura di Carlo Secchi e Enrico Sassoon, Egea, 2006
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Recent Publications
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