ABSTRACT
The chapter analyses how bilateral ties between the EU and Russia and their regulation influence the political and economic climate in the region. It provides the overview of Russia’s trade policy towards EU as a main trade and investment partner and explains how the liberalization of the economy and trade policy and Russia’s accession to the WTO attracted the attention of Western European business to the large scale and highly segmented Russian market. The main focus is on the factors that have negatively influenced the bilateral relations and led to the significant contradiction between Russia and EU, such as the financial crisis 2008–2009, political confrontation in Georgia, the initiation of the Eastern Partnership, the Association Agreement between Ukraine, and then the EU added even more serious problems. The chapter will also cover the problem of the current limitations in trade and technological cooperation from the EU side (“sanctions”) and the Russian food embargo (“contra-sanctions”).
