The European Union on Thursday offered six former Soviet states ?600 million ($798 million) in incentives to promote stronger energy and economic ties and democratic reforms, The Wall Street Journal reported.

The plan, called the Eastern Partnership, has inflamed tensions between the EU and Russia, as Moscow worries that the bloc is encroaching on its traditional turf. The EU, for its part, remains wary following Russia`s war in Georgia last year and a weekslong January cutoff of gas supplies to the EU during a dispute between Moscow and Ukraine.

"The EU knows, not just because of the Georgia crisis and the gas crisis at the beginning of this year, that safety and prosperity in Europe also depend on the stability of the Eastern partner countries," German Chancellor Angela Merkel said at a summit here of the six countries and the EU.

In addition to the money, international institutions, including the European Bank for Reconstruction and Development and the European Investment Bank, have been asked to increase their lending in the six -- Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine -- some of which have been hit hard by the downturn.

But the EU may be losing the competition for influence with a more-determined Russia. Only ?350 million of the money is new, suggesting limited commitment. Moscow sees the Eastern Partnership, which it has described as EU "meddling," as an attempt by the West to carry on with a failed attempt to expand NATO into the region, says Alexander Rahr, director of the Russia program at the German Council on Foreign Relations.

In a sign of EU divisions over the Eastern Partnership plan, Ms. Merkel was the only leader of a big EU nation to attend the summit. Leaders of the six Eastern Partnership countries also gave the offer a mixed reception. Alexander Lukashenko, president of Belarus, and Moldovan President Vladimir Voronin, who have close ties to Moscow, didn`t attend.

The EU didn`t specify how quickly the ?600 million will be distributed, or how reforms in the six countries will be measured. Belarus is a dictatorship; some of the countries have significant human-rights problems. Among them, the six countries have four open territorial conflicts.

At a separate EU meeting Thursday in Prague, at which policy makers sat down with labor leaders and employers to discuss jobs, EU leaders agreed to coordinate measures to cut growth in unemployment.


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