Russia and the European Union cannot reach a conclusive agreement on major issues in energy relations. Russian and EU economic policymaking from the 1970s onwards developed mutually incompatible ideological foundations. The EU adopted a neoliberal market framework with some social market characteristics, while Russia functions along economic nationalist ideas. These ideological influences informed the development of energy policy in each respective party. The EU insists that Russia deal with the internal European Energy market through a free market framework, while Russia prefers to do
business with the EU without modifying its economic model in the energy industry. This has resulted in disagreements in negotiations for Partnership and Cooperation Agreement, the Energy Charter Treaty, and the Third Energy Package. Both Russia and the EU would benefit from cooperation due to energy interdependence, but each party needs to recognize and acknowledge their counterparts’ interests for achievable long-term progress.