Thursday

27th Jun 2019

EU expected to extend Russia economic sanctions

  • Mogherini: "Despite the differences [on Russia], unity was always present". (Photo: European External Action Service)

EU foreign policy chief Federica Mogherini has predicted the EU will extend economic sanctions on Russia despite “differences” of opinion in Europe.

Asked by German daily Die Welt in an interview out on Thursday (19 May) if the measures will be prolonged, she said: “I expect so. EU leaders had coupled the lifting of sanctions to full implementation of the Minsk agreements. This has not been achieved”.

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  • Putin (l) with Hungarian PM Viktor Orban in Moscow (Photo: kremlin.ru)

The paper noted that some EU states, such as Cyprus and Hungary, were wary of renewing the sanctions or wanted at least to soften them. That list also includes Greece, Italy and Slovakia.

But Mogherini said: “There have always been different views on parts of our sanctions policy. That will probably remain so. But despite the differences, unity was always present”.

The economic sanctions include curbs on international lending to Russian banks, energy and arms firms as well as a ban on exports of energy industry technology and an arms embargo.

They are due to expire in July unless EU states extend them by consensus at a summit in June or earlier.

The EU has also blacklisted dozens of Russian officials, some at the highest levels of the Kremlin, halted EU-Russia summits and imposed a ban on doing business in Russian-occupied Crimea in Ukraine. These expire at different times, but they are also expected to stay in place, diplomats said.

The so-called Minsk peace deal was negotiated by France, Germany, Russia and Ukraine in the Belarusian capital.

It doesn’t name Russia as the aggressor, but it says “foreign” forces must leave Ukraine and that Ukraine must regain control of its Russia border.

Mogherini told Die Welt that Russia was “no longer” a strategic partner but that it was still strategically important. She said the EU practiced “selective engagement” with Moscow, for instance on Iran non-proliferation.

She added that Ukraine also had to meet Minsk-related obligations. The main one of these is to devolve power to Russia-occupied regions in local elections.

Losing faith

But she indicated that Europe was losing faith in the Minsk deal as a template for solving the two year-old conflict.

“In the second half of this year, EU governments are expected to undertake a complete political assessment to determine to what extent the Minsk agreement was implemented and what the path going forward to resolve the conflict in Ukraine looks like”, she told the German newspaper.

Opinion differs to what extent the sanctions are hurting the Russian economy.

The International Monetary Fund (IMF) said also on Thursday they contributed to a 3.7 percent contraction of Russian GDP last year.

It said the economy will shrink again by 1.5 percent this year. But it said low oil prices are the main reason and that an uptick in prices means that its previous forecast, of a 1.8 percent contraction in 2016, is no longer valid.

The political impact of the sanctions is also open to debate.

The last time the Levada centre in Russia, its leading independent pollster, examined perceptions of Russia, in November 2015, 65 percent of people said they think their country is a “superpower”.

A separate survey in October showed that 75 percent of people think Russia has never been an aggressor or that it is the victim of other countries.

Montenegro

For their part, Nato states’ foreign ministers in Brussels on Thursday took another decision that angered the Kremlin by signing a protocol to make Montenegro the newest member of the Western defence alliance.

The small, Balkan country is loved by the Russian yacht-owning elite.

A Russian foreign ministry spokeswoman said the same day Moscow will curtail economic and diplomatic contacts with Podgorice after it joins Nato.

She called its Nato accession an “attempt to change the military political landscape in Europe, especially in the light of the alliance's course to restrain our country."

Juncker agrees to visit Russia in June

The EU Commission chief will attend an economic forum in Russia next month, just days before EU countries decide on whether to extend economic sanctions.

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