Russia has abundant natural resources, and also has the broadest land distribution in the world. Geographically Russia has the benefit in transportation with the European Union, and also has high complementarities in economics and trade fields. Therefore, both sides maintain a close cooperation. Under the European Union expansionist policy, not only have Russia and European Union further regional cooperation, but also the recruitment of Eastern European countries to the European Union, causes an enhancement of conflicts of interest between Russia and European Union. Under the globalization and the regionalization process, Russia creates huge amount of foreign exchange earnings by exporting energy sources. However, in order to achieve the bilateral dialog and mutual recognition, Russia has to achieve domestic market mechanism multiplication to reach the European Union open market standard, as well as domestic politics democratization that conforms to the European Union free democracy definition. This article uses Neo-functionism to discuss the developmental direction of Russia under the European Union policy. Based on the interaction between Russia and the European Union, this article analyzes how Russia seeks the balance between the national sovereignty localization and regional cooperation while at the same time it faces national interest conflicts during the process of the regional conformity. The article also predicts the short and medium term relationship between Russia and the European Union.