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MOSCOW-Strains in Russia-EU relations over Russia's war in Georgia pose a long-term threat to investment flows and risk further complications when critics of Kremlin policy assume the EU presidency over the next 12 months.EU leaders said on Monday they would suspend a September 15 negotiating session on a new partnership agreement unless Russia had by then pulled back its troops to positions they held before its brief war with Georgia over a rebel Georgian region.The accord aims to create a new legally binding framework for trade and political contacts between the two, and market analysts say failure to update the current deal could damage Russia's attractiveness as a home for Western investment.But Russia has recovered from the state of near economic collapse it was in when it signed the first deal in 1994 and, flush with dollars from high oil prices, it now sees the European Union as only one source of potential investment."It is unsettling, it's not a short-term issue but long-term investments in Russia are contingent on an understanding of Europe as a main trading partner. Over time, it will affect sentiment," said one European diplomat.European Commission figures show that while EU investment in Russia reached 18 billion euros ($26 billion) in 2007-three-quarters of the total invested in Russia that year-just 1 billion traveled the other way.But the trade balance was tilted in Russia's favor.Some 155 billion euros in goods and services, including energy, traveled westwards and 107 billion euros shifted eastwards.
To read more go to:
http://www.reuters.com/article/worldNews/idUSL572355820080906
As in the days of Noah...
