Tuesday

22nd Aug 2017

EU-US scrap on Russia sanctions gets worse

  • Juncker (r) waves goodbye to Trump after meeting him in Brussels in May. (Photo: consilium.europa.eu)

The EU has threatened to retaliate against US sanctions on European firms that invest in Russian energy projects.

But a senior US diplomat has said there is a window of opportunity to “change the status quo” on Russia’s behaviour in Ukraine.

  • Ukraine conflict "very active", Volker said after visiting front line. (Photo: Christopher Bobyn)

Jean-Claude Juncker, the European Commission chief, said on Wednesday (26 July) that “if our concerns are not taken into account sufficiently, we stand ready to act appropriately within a matter of days.”

“America first cannot mean that Europe's interests come last,” he said.

A leaked internal memo this week indicated the Commission might seek to circumscribe US jurisdiction on the issue or to impose counter-sanctions on US firms.

Juncker said the EU was “fully committed” to previous Russia sanctions, but he said the new US measures could have “unintended unilateral effects that impact the EU's energy security interests”, such as repairs to Russia’s old gas pipeline network.

His words were echoed by Berlin, whose plan to build a newI gas pipeline with Russia, Nord Stream II, could be in jeopardy if the US measures go through.

Martin Schaefer, a German foreign ministry spokesman, indicated that the US wanted to block the pipeline so that American firms could sell more gas in Europe.

It would be "unacceptable for the United States to use … sanctions as an instrument to serve the interests of US industry," he said.

Volker Treier, the head of the German Chamber of Industry and Commerce, a lobby group, said: “The United States is looking to its own economic interests.”

Transatlantic split

The chorus rang out after the House of Representatives in Washington passed the Russia sanctions bill by 419 votes to three on Tuesday.

It is expected to fly through the Senate and the White House and could become law in August or September.

Nord Stream II aside, it also threatens fines against firms that help Russia to extract offshore gas in the Arctic or to sell arms, and it restricts debt sales to Russian banks.

The transatlantic split comes amid increased violence in east Ukraine.

Kurt Volker, a US special envoy on Ukraine, said in Brussels, also on Wednesday, that “it’s a very active conflict right now. There are ceasefire violations by the thousands each day and there’s a tremendous humanitarian toll”.

“The level of violence, casualties this year is 65 percent over that of last year,” he said.

Volker came to the EU capital to outline US policy on Russia after visiting the front line in Ukraine.

He did not directly defend the new US sanctions, but he indicated they were part of a “concerted [US] effort to be more engaged on the issue”.

“This is becoming a costly problem for Russia,” he said, referring to its covert military campaign in east Ukraine.

“So I hope we’re able to find a better solution than the status quo. We’ve got to change the status quo,” he said.

He said there was a new window of opportunity for diplomacy because US president Donald Trump and French president Emmanuel Macron both wanted to end the conflict.

He said elections in Germany in autumn and in Russia next year could also renew interest in a solution.

“There are some reasons for hope. It’s not a lost cause,” Volker said.

US policy

Trump stands accused of colluding with Russian president Vladmir Putin to win last year’s US election, but Volker said that when Trump and Putin met at a G20 summit in Germany earlier this month the US president voiced a tough line on Ukraine.

Volker said US policy was that Russia must restore Ukrainian sovereignty and territorial integrity, and that Ukraine must guarantee the safety of all Ukrainian citizens, including Russian speakers.

EU firms Engie, OMV, Shell, Uniper, and Wintershall are to bankroll Nord Stream II, which would concentrate 70 percent of Russian gas exports on the German route.

It would make former Soviet bloc states easier to blackmail with gas cut-offs, its critics say, and it would harm Ukraine by making its gas transit pipes obsolete.

Russia’s deputy foreign minister, Sergei Ryabkov, said the US sanctions bill “does not fit the framework of common sense”.

He told the Interfax news agency that Russia-US relations were entering "uncharted territory in a political and diplomatic sense."

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