Russia targets Cyprus, Hungary, and Italy for sanctions veto

The most painful sanctions - on Russian banks and energy firms, imposed after the Malaysian Airlines disaster - end in July.

Member states must agree by consensus to extend their validity.

But if one or more of them break ranks, the sanctions will fall.

One EU source involved in early talks on sanctions renewals told journalists in Brussels this week that Moscow is targeting Budapest, Nicosia, and Rome as its most likely allies.

“The Russians are working intensely through various capitals”, the source said, naming the three as its “main” targets.

"Normally the renewal of these sanctions was expected to be a no-brainer. But now it doesn't seem so simple, as several countries are pushing for a broader debate on Russian sanctions in March”.

A second EU contact told EUobserver: "I would be very surprised if Russia didn't lobby Budapest, Nicosia, or Rome on sanctions. But also Berlin”.

They noted that Cyprus and Hungary are spearheading the initiative for a broad sanctions review.

They added that Greece, Italy, and Slovakia would support a partial roll-back.

Diplomatic sources said the Czech Republic is also wobbly. The UK, the Baltic states, Poland, and Sweden are the most hawkish. France and Germany are sitting on the fence for now.

For its part, the US is confident the Russian lobbying won’t succeed.

Washington has carefully co-ordinated its sanctions regime with EU capitals over the past 10 months.

But if the EU lifts sanctions while Russia continues to wage a covert war on Ukraine it could cause a rift in the trans-Atlantic alliance.

EUobserver contacted the Cypriot, Hungarian, and Italian foreign ministries for comment.

A Cypriot official said: “We condemn any actions which violate the sovereign and territorial integrity of any country”.

They added: “We [have] supported the need to seek a diplomatic solution and we viewed the adoption of restrictive measures as a tool and not a goal in itself. Together with our EU partners, we will continuously review the situation based on developments on the ground and take decisions on the basis of consensus".

The Hungarian ministry declined to speak.

Track record

But Hungary's leader, Viktor Orban, has a track record of defying the EU and the US.

He recently did it over the construction of South Stream, a Russian gas pipeline project, and over his own crackdown on civil liberties in Hungary. He has also said the Russia sanctions don’t work.

Italy noted that its foreign minister, Paolo Gentiloni, on a visit to Washington this week said “respect” for the sanctions “serves a political solution”.

Rome’s line is that it’s too early to talk about sanctions renewals and that EU unity is more important than Italy’s economic interests.

But Italian PM Matteo Renzi, at the last EU summit in October, already broke ranks by trying to start a sanctions debate.

One EU diplomat said at the time that Renzi “gave a half-hour speech about the need to ‘engage constructively’," with Russia. A second diplomat said his unexpected speech “went down quite badly”.

Crimea ban delayed

Whatever happens in 2015, the EU and US are currently working on fresh Crimea sanctions.

The European Commission and EU foreign service have proposed a ban on most forms of EU firms’ commercial activity in the Russia-annexed region, with a focus on transport and infrastructure.

Member states’ experts held a second round of talks on the text in Brussels on Thursday (11 December).

An EU source said there is broad agreement on going ahead, but some countries are trying to carve out “exemptions … the devil is in the detail”.

A second contact noted: "It's France against everyone else. France wants to limit sanctions to [co-operation with] companies established on the territory of Crimea".

The original idea was to have the ban ready when EU foreign ministers meet in Brussels on Monday, with Ukraine’s PM and FM also in town the same day.

Sources predict it won’t happen. But they said it “might be” ready by the end of next week, when leaders meet for the last 2014 summit and when Ukraine president Petro Poroshenko is expected to visit the EU capital.