EU talks fail to stop Russia sanctions on Ukraine

"As there is now too little time left, it requires extraordinary efforts to reach an agreement."

Ukraine’s foreign minister, Pavlo Klimkin, called Russia’s demands "unacceptable" and "absurd."

The EU’s trade commissioner, Cecilia Malmstroem, who mediated the event, said expert-level talks could reconvene next week.

"If there's a will we can do it … [but] the clock is ticking very, very fast," she said.

She noted the EU won't postpone or to change the content of the EU-Ukraine free trade agreement. "On 1 January, the DCFTA [the trade pact] will enter into force," the Swedish politician said.

Russia's demands, according to Polish daily Gazeta Wyborcza, citing an internal EU note, include that Ukraine adopts Russian phytosanitary standards and that the EU and Ukraine share privileged information on bilateral customs transactions.

The phytosanitary step would, for instance, oblige Kiev to honour Moscow's food import bans, such as the one it imposed on EU producers.

The DCFTA is designed to decouple the Ukrainian economy from Russia and to align it with the EU single market.

The strategic shift, described by some experts as "EU accession-lite," helped prompt last year’s Maidan revolution when the former Ukrainian regime refused to sign the pact.

Ukrainian agricultural exports to Russia have already plunged by 75 percent, or some $1 billion a year, due to the conflict.

Its economy would lose another $1.5 billion a year in industrial exports if Ulyukayev makes good on his threat.

'Russia’s wishes'

For its part, Berlin has proposed signing a political statement on EU cooperation with Russia’s Eurasian Union as a way of mollifying Moscow.

Foreign minister Frank-Walter Steinmeier put forward the idea in a letter to Malmstroem, seen by the FT, which says the EU should “create [political] space and move towards Russia.”

"By the content of this declaration we could respond to Russia’s wishes and begin a closer exchange of views on energy and investment protection issues," he said.

Commission chief Jean-Claude Juncker, in a letter to the Kremlin in November, proposed a similar initiative.

"I can assure you that the European Commission will be a helpful partner in this process," he noted.

Juncker and German chancellor Angela Merkel also met with Russian leader Vladimir Putin in the margins of the climate summit in Paris on Monday.

Gas tensions

The overtures have prompted concern in easterly EU capitals the bloc won’t extend Russia sanctions when they expire in January.

Germany’s plan to add a new leg to its Russia gas pipeline, Nord Stream, is also causing tension.

Ten EU states - Bulgaria, the Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Poland, Romania, and Slovakia - in a letter this week to EU Council chief Donald Tusk called for a summit debate on the scheme.

"The position of the European Commission on the Nord Stream II project will … influence the perception of the EU's common foreign and security policy among its core allies," the letter, seen by the Reuters news agency, says.

It adds that Nord Stream II would harm Ukraine.

"Preserving the transport route through Ukraine is in the strategic interest of the EU as a whole, not only from an energy security perspective, but also reinforcing the stability of the eastern European region."

EU sanctions

But Bulgarian PM Boyko Borisov, on Monday, distanced himself from the appeal.

"I will defend the position for the construction of Nord Stream II and [the construction of a Russian] gas hub in Bulgaria - it’s advantageous for the country and nobody can reproach me for that," he told press, Reuters reports.

The Russian foreign minister, Sergei Lavrov, is also in Cyprus on Wednesday to seek support on EU sanctions.

France, Germany, Italy, the UK, and the US have outlined a deal to extend EU economic measures for six months.

The Dutch PM, Mark Rutte, who takes over the EU Council presidency on 1 January, recently told EUobserver he’s "aware" of the accord, but said "discussions are ongoing" on how to proceed.

The Cypriot foreign ministry told this website on Tuesday: "We have always expressed the need for a diplomatic solution in Ukraine and viewed the adoption of restrictive measures as a tool in achieving this, not as a goal in itself.”

It added: "Having said that, in view of the upcoming expiration of restrictive measures, we will review the situation together with our EU partners and take appropriate decisions on the basis of consensus."