East versus West: When Politics Collide with Economics

Abstract

Russia and the West are currently in the most serious divide since the end of the Cold War. The EU and NATO versus Russia in Moscow’s traditional back yard, where Ukraine and Moldova are the proxies. In this regional framework, the EU and NATO member states are facing a dilemma: economic gains or strategic balancing. The hypothesis is that internationally, states are always the main leaders in terms of conducting foreign policy regardless of the organizational development. The findings are that states are not only abstract concepts that have abstract, immutable national interests. If the shadow of future is a very important element that makes states more willingly to cooperate, externally the shadow of the past is equally important. Thus, although officially the Union or the Alliance as a whole formally agree on a single decision, generally this represents the national preferences of only one country or of a small group of states. Additionally, whereas in the case of stability and predictability the national preferences are economically driven, during crisis situations, the national preferences that dominate the negotiating scene are political driven and the main decision makers are the executive branch and the public opinion. Additionally, the geographical proximity has the potential to change the nature of the national preferences, from economic based to political-strategically ones.

Keywords: the EU, NATO, Russia, Moldova, Ukraine, national preferences

JEL Classification: F5