A united Europe is the most effective way to deal with Russia

Europe has considerable “soft power”. Using it intelligently is the best way to defend Russia’s bull

What, in relations with the west, is Russia's problem? It has a permanent seat on the UN Security Council, membership of the G8, the world's second-largest nuclear arsenal, vast oil and gas reserves - hardly the makings of a global underdog. Yet it sees itself as a perpetual victim.

As viewed from the Kremlin, Georgia's president, Mikhail Saakashvili, is the stooge of an expansionist Nato, intent on occupying Russia's southern flank. The north Atlantic alliance, thanks to the accession of the Baltic states in 2004, already abuts her north-western border. Through Ukraine, Nato could extend its presence to the Black Sea.

So it is unsurprising that, when Georgia made a push for control of South Ossetia, Moscow seized the opportunity to try to knock a western pawn out of the geostrategic chess game. As Misha Glenny argues convincingly on page 14, the Georgians, prodded by Washington, walked into a trap.

For Nato countries to denounce Russia's use of force as "disproportionate" misses the point. The Kremlin calibrated its response not according to Georgia's military capability, but in proportion to its own feelings of diplomatic impotence. Russia has been voicing frustration over western ambitions in its backyard since the collapse of the Soviet Union. Military actions, it has reasonably concluded (especially by observing US foreign policy in recent years), speak louder than words.

Washington, meanwhile, argues that Russia's actions confirm that nations formerly captive to the Soviet Union will only be safe under the protective umbrella of Nato. Russia's right of influence in eastern Europe, goes this argument, is trumped by the values of democracy and the rule of law, acceptance of which is a condition of Nato membership.

Georgia, however, is neither a functional democracy nor a paragon of human rights: a major reason why the country's Nato candidacy has moved slowly.

But arguments based on democracy have no force in Russia, for two reasons. First, it is unrealistic to expect a country to embrace villain status. Vladimir Putin is no lover of political freedom, but that doesn't mean he accepts that his behaviour is unprincipled. He simply sees restoring national pride and global influence as higher virtues. Second, any claim by the west to moral authority can be countered by allegations of double standards. (Why support independence for Kosovo but not South Ossetia?)

In other words, the Kremlin does not care what the west says about right and wrong. It cares about strategic advantage, which means arresting the decline in its military standing and advancing its control of east-west energy exports. A short war against Georgia - Nato candidate and host to a vital oil pipeline - served both ends.

What should be the west's response? The short answer is negotiation. After the South Ossetian war, the US administration is likely to see any accommodation of Russian interests as appeasement. That is why the European Union, rather than Nato, is the best vehicle to steer a new diplomatic course in relations with Moscow.

Nicolas Sarkozy's intervention as EU president was shrewd. His "six-point plan" for South Ossetia is no road map to lasting peace in the Caucasus. But the manner of its negotiation hints at what might be possible if Europe spoke to Russia with one voice. Britain appears to have been lamentably uninvolved in the process, though Sarkozy clearly consulted with Germany and Italy. Moscow will find it all too easy to exploit any such divisions within the EU, trading oil and gas for diplomatic indulgence from individual member states. Russia needs access to European energy markets. A united EU front on that score would give leverage over the Kremlin.

As the biggest single market in the world, Europe has considerable "soft" power. Exercising it intelligently is the best way to defend Russia's bullied former satellites, which, as Georgia discovered, have much to lose when Moscow is allowed to assert its influence the "hard" way.

The challenge for the west is to make the Kremlin play by less deadly rules.

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This article first appeared in the 18 August 2008 issue of the New Statesman, Superpower swoop