The European Union and Russia are not only neighbours but also strategic partners.  At the upcoming 27th summit, in Nizhny Novgorod, the EU will be represented by Herman Van Rompuy, President of the European Council and by José Manuel Barroso, President of the European Commission. Catherine Ashton, High Representative of the Union for Foreign Affairs and Security Policy, and Karel De Gucht, Commissioner for Trade, will also take part. Russia will be represented by Dmitry Medvedev, President of Russia. Foreign Minister Sergey Lavrov and Minister of Economic Development Nabiullina will also participate. The summit will take place over two days, beginning with an informal dinner on 9 June and continuing with a plenary session on the morning of 10 June, followed by a working lunch and a press conference.
The parties are expected to discuss the following issues:

• the global economy and global governance issues;

• EU-Russia relations, in particular the EU-Russia Partnership for Modernisation;

• international issues, including the developments in North Africa and the Middle East.

The Summit will on build on the good results achieved at last year’s EU Russia Summits, held in Rostov and Brussels.

The EU and Russia will take note of the good progress made in the implementation of the EURussia Partnership for Modernisation, which is a key initiative providing additional momentum to ongoing work in the Dialogues under our Common Spaces. The EU and Russia will discuss the state of play in the negotiations on Russia’s accession to the WTO, which are now at multilateral level. The new EU-Russia Agreement, which is currently being negotiated, should provide a solid basis for deepened bilateral relations in the 21st century covering all areas of EU-Russia relations.

A growing economic relationship
Economic ties between Russia and the EU have grown substantially over the last years. Russia remains the EU’s third most important trading partner in goods (after the US and China), with 87 billion EUR in exports to Russia (6.4% of all EU exports, 4th place after US, China, Switzerland) and 155 billion EUR in imports in 2010 (10.4 % of all EU imports, 3rd place after China and US, mostly natural resources). The EU is thus by far the largest market for Russian goods. 
In 2010, both imports and exports rose by approximately 32 % compared to 2009, after having been hit by the global economic crisis. Russia enjoyed a trade surplus of 68 billion EUR with the EU. Russia’s total account surplus rose by 47% compared to 2009 and reached $ 79 billion in 2010.  More specifically, Russia is the EU’s most important single supplier of energy products, accounting for over 25% of the EU consumption of oil and gas. In turn, Russia’s economy remains highly dependent on the export of energy raw materials, with the EU as its most 2 important destination. In 2010 63% of Russia’s exports consisted of crude oil, oil products and natural gas. The EU accounts for 88% of Russia’s total oil exports, 70% of its gas exports and 50% of its coal exports.

Financial cooperation
Financial cooperation with Russia began in the early 1990s, under the TACIS program, which has in the meantime been replaced by the European Neighbourhood and Partnership Instrument. To help smooth Russia’s transition, a whole range of sectors were supported. Since 1991, a total of around €2.8 billion of assistance was provided through the European Commission. A number of TACIS projects are still being implemented until 2013. Given the significant recent improvements in the Russian Federation’s fiscal position, the need for large volumes of financial assistance has declined. In fact, Russia herself has become a donor. Financial cooperation is now specifically targeted to meet the objectives defined in the road-maps to the EU-Russia Common Spaces. Cooperation is now carried out on the principle of co-financing by the EU and Russia. Most notably, Russia is co-financing Cross Border Cooperation programmes. Emphasis is on higher education cooperation, with Erasmus Mundus and Tempus supporting mobility of students and teaching staff. 
 Furthermore, funding for Russia also came from the Nuclear Safety Instrument (€500 million since 1991) and a number of other thematic programs. The European Democracy and Human Rights Instrument (EIDHR) financed 14 human rights projects in Russia in 2010 for nearly € 2 million, and the Institution Building Partnership Programme supported 16 projects with NGOs for a total of € 5 million.

EU-Russia relations – background
The legal basis for EU relations with Russia is the Partnership and Cooperation Agreement (PCA) which came into force on 1 December 1997 for an initial duration of 10 years, and which has been automatically extended beyond 2007 on an annual basis. It sets the principal common objectives, establishes the institutional framework for bilateral contacts, and calls for activities and dialogue in a number of areas. The EU is currently working with Russia on a new agreement to replace the PCA. Both the EU and Russia have experienced many political, economic and social changes since the entry into force of the PCA in 1997. The new agreement must reflect these changes as well as the new challenges linked to the globalised world in which we are living.  At the St. Petersburg Summit in May 2003, the EU and Russia agreed to reinforce their cooperation by creating four “common spaces”:

• the Common Economic Space aiming to make the EU and Russia’s economies more compatible to help boost investment and trade;

• the Common Space on Freedom, Security and Justice covering the area also known as Justice and Home Affairs;

• the Common Space on External Security aiming to enhance cooperation on foreign policy and security issues; and

• the Common Space on Research, Education and Culture aiming to promote scientific, educational and cultural cooperation.

Materials from the site of the European Delegation to Russia.