Wednesday

16th Jan 2019

EU targets bank loans, World Cup in Russia sanctions talks

  • Russian football fans: The EU paper is the first official mention of an anti-Russia World Cup campaign (Photo: oleg)

EU ambassadors are holding talks in Brussels on new proposals for Russia sanctions - seen by EUobserver - with ideas including “action” to block its 2018 World Cup.

The talks are taking place amid news of a “ceasefire process” agreed between Kiev and Moscow, which EU diplomats regard with caution.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

According to an options paper tabled by the European Commission and the EU diplomatic service, "there are two possible avenues for stepping up economic pressure" to make Russia cease hostilities.

The paper says the EU can deepen existing sanctions or expand them to new economic sectors.

But it recommends the first option because it can be adopted more quickly and because it will increase the "effectiveness" of existing measures.

It also says option one “reinforces the point that EU sanctions are directed at promoting a change of course in Russia's action in Ukraine and are not a tit for tat against Russia's restrictive measures on the EU."

The paper suggests EU countries should expand the current ban on purchasing bonds from big Russian state banks to a ban on taking loans. It says the maturity threshold of forbidden bonds should go down from 90 to 30 days and that other types financial products (derivatives) should also be listed.

The financial measures are to be linked with the existing EU ban on exports of arms and oil-drilling technologies.

The paper says there should be no "debt financing through bonds, equities and syndicated loans" to Russian state-owned defence companies and oil exploration firms.

It notes that the embargo on dual-use goods, which currently applies to Russian military end-users, should be expanded to civilian ones as well.

It names "high performance computers", "quantum key distribution systems", "special materials" and "machine tools" as relevant items.

It adds that EU firms should stop providing “future associated services” to Russian oil firms, in areas including: seismic services; drilling; well-testing; supply of floating vessels for deep water oil exploration and production; Arctic oil exploration and production; and shale oil projects in Russia.

It proposes expanding an existing blacklist to persons and companies involved in fighting in the Donbass region in east Ukraine, but it does not mention names, which are to be provided by the ambassadors.

In a more creative turn, the EU paper also says that EU countries and their G7 allies (Canada, Japan, and the US) should consider “taking co-ordinated action within the G7 and beyond to recommend suspension of Russian participation in high profile international cultural, economic, or sports events (Formula 1 races, UEFA football competitions, 2018 World Cup etc).”

This sports idea is a British one, with UK diplomats already pushing for it last month, when pro-Russia rebels shot down the Malaysia Airlines flight MH17.

The EU paper concludes that in the event of a "major escalation" the existing sanctions will be broadened to new economic sectors.

EU leaders at a summit last weekend tasked the EU institutions to draw up plans which are to be adopted on Friday if Russia does not back off.

They did it after Russian troops and tank columns began fighting alongside pro-Russian rebels in east Ukraine and after Russian leader Vladimir Putin boasted he could conquer Kiev in “two weeks” if he “wanted to”.

The ambassadors’ talks began after Ukrainian president Petro Poroshenko announced earlier on Wednesday that he had agreed a “ceasefire” with Putin by phone.

But Russia later quashed the news, saying it cannot agree a ceasefire because it is not a party to the conflict.

One Brussels-based diplomat told EUobserver the sanctions blueprint will "largely remain as it is" before adoption at the end of the week.

A Kiev-based EU diplomat said Poroshenko was “tricked by the Russians into making the announcement - this just gave them another chance to deny involvement in the conflict”.

Russia one month ago reacted to the first raft of EU economic sanctions with a ban on EU fruit, vegetable, dairy, and meat products.

EU agriculture commissioner Dacian Ciolos on Wednesday said the ban "affects Russian consumers more than EU producers”.

He also indicated that EU farmers may receive compensation and that the commission is working to stabilise food prices in Europe, ahead of a snap meeting of EU agriculture ministers on Friday.

EU, US to tighten Russia sanctions

The EU and US are to announce tighter Russia sanctions, with the EU’s draft legal texts - seen by EUobserver - targeting state-owned banks, oil technologies, and defence goods.

News in Brief

  1. Spanish PM calls for EU gender equality strategy
  2. Farage says bigger Brexit majority if second referendum
  3. Macron starts 'grand debate' tour after yellow vests protests
  4. Barnier: up to London to take Brexit forward
  5. Stimulus still needed, ECB's Draghi says in final report
  6. May's Brexit deal defeated by 230 votes
  7. German economy hit by global economic turbulence
  8. MEPs narrowly call for end to 'tampon tax'

Analysis

China's 2019 growth outlook

As China's growth seems to be slowing, some observers see the country amid what the New York Times called a "severe downturn". As they mistake China's secular deceleration with cyclical fluctuations, they miss the rapid increase in Chinese living standards.

Opinion

The Azov crisis will backfire

Vladimir Putin's nightmare of Petro Poroshenko's re-election will be even certain as Ukrainians rally around the flag. Next March's election is not just to elect a new president but also a commander-in-chief to deal with five more years of Putin.

Stakeholders' Highlights

  1. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  2. Nordic Council of MinistersSeminar on disability and user involvement
  3. Nordic Council of MinistersInternational appetite for Nordic food policies
  4. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  5. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups
  6. Nordic Council of MinistersTheresa May: “We will not be turning our backs on the Nordic region”
  7. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  8. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  9. Nordic Council of MinistersState of the Nordic Region presented in Brussels
  10. Nordic Council of MinistersThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  11. Nordic Council of MinistersThe Nordic gender effect goes international
  12. Nordic Council of MinistersPaula Lehtomaki from Finland elected as the Council's first female Secretary General

Latest News

  1. MEPs allow Draghi's membership of secretive bank group
  2. EU parliament backs Morocco deal despite row
  3. Barnier open to 'future relations' talks if UK red lines shift
  4. German spies to monitor far-right AfD party
  5. On Morocco, will the EU ignore its own court?
  6. UK parliament rejects May's Brexit deal in historic defeat
  7. EU suggests majority vote on digital tax by 2025
  8. MEPs redouble appeal on sexual harassment

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic design sets the stage at COP24, running a competition for sustainable chairs
  2. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  3. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  4. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  5. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  6. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  7. International Partnership for Human RightsCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  8. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  9. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  10. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  11. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  12. Mission of China to the EUChina: Work Together for a Better Globalisation

Join EUobserver

Support quality EU news

Join us