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07/12/2016

EU delays sanctions while Ukraine truce holds

Global Europe

EU delays sanctions while Ukraine truce holds

Russian troops have occupied Crimea since April 2014.

[Wikimedia]

The European Union adopted new sanctions against Russia over its involvement in the Ukraine on Monday (8 September), but delayed enforcing them to leave time to assess whether a ceasefire in Ukraine is holding.

The sanctions, which target the ability of Russia’s top oil producers to raise capital in Europe, were originally due to take effect today.

But that was pushed back by a few days after some EU governments suggested that new sanctions be put on hold to give a chance to a shaky ceasefire in eastern Ukraine.

Some EU countries opposed to further punishment of Moscow see the ceasefire, which was declared on 5 September and still largely intact yesterday, as an opportunity to block the new EU sanctions package and avoid retaliation from Russia, diplomats said.

“The entry into force [of the new sanctions] through the publication in the Official Journal will take place in the next few days. This will leave time for an assessment of the implementation of the ceasefire agreement and the peace plan,” EU Council President Herman Van Rompuy said in a statement.

“Depending on the situation on the ground, the EU stands ready to review the agreed sanctions in whole or in part,” he said after EU ambassadors held an extraordinary meeting to thrash out the issue.

An EU diplomat said there was no clarity on when the new sanctions would take effect. Ambassadors would probably discuss the issue next on 10 September.

Hinting at disunity in the EU, the diplomat said it would require “political” support for the sanctions to take effect, suggesting that ambassadors would have to escalate the issue to a higher level of their governments.

A deadline for EU governments to agree to the new sanctions had earlier been pushed back.

Divisions

The EU has always been divided over sanctions on Russia, with countries such as Poland and the Baltics taking a hard line while the prime ministers of Hungary and Slovakia have been publicly hostile to sanctions.

At yesterday’s ambassadors’ meeting, some EU governments wanted to discuss whether the new sanctions should be frozen before being implemented because of the ceasefire in Ukraine, or alternatively if the new sanctions were implemented, how they could be suspended and when.

The EU has always said its sanctions would be reversible if Russia stopped destabilising Ukraine. Moscow annexed Ukraine’s Crimea region in March and NATO says it has sent several thousand troops to help pro-Moscow separatists in the eastern part of the country.

Austria, Finland, Sweden, Cyprus and Slovakia were among countries wanting to give the ceasefire more time, according to one EU diplomat.

The ceasefire in Ukraine is part of a peace plan intended to end a five-month conflict that the United Nations’ human rights envoy said had killed more than 3,000 people.

The truce was largely holding yesterday, though each side accused the other of sporadic shelling, including in Mariupol, a city of about half a million people.

German Chancellor Angela Merkel told conservative members of parliament in a closed-door meeting in Berlin yesterday that the sanctions were needed despite the ceasefire agreement, according to several participants.

Merkel told the deputies Russia had already deceived the West repeatedly with broken promises and she pointed out that Russian troops are still in Ukraine, they said. The EU had to act decisively now, Merkel was quoted as saying.

The proposed new EU sanctions put Russia’s top oil producers and pipeline operators Rosneft, Transneft and Gazprom Neft on a list of Russian state-owned firms that will not be allowed to raise capital or borrow on European markets, an EU diplomat said earlier.

Gazprom excluded

EU sanctions, however, do not include the gas sector and in particular state-owned Gazprom, the world’s biggest gas producer and the biggest gas supplier to Europe.

In general, the EU sanctions on Russian companies raising money in the European Union will apply to firms that have turnover of more than 1 trillion roubles (€21 billion), half of which is generated from the sale or transport of oil, the diplomat said.

A further 24 people will be added to a list of those barred from entry to the bloc and whose assets in the EU are frozen.

Details of the new sanctions would only be made public when published in the EU’s Official Journal.

The list is expected to include new separatist leaders in eastern Ukraine, the government of Ukraine’s Crimea region annexed by Moscow, and Russian decision-makers and oligarchs.

Russia signalled yesterday it might ban Western airlines from flying over its territory as part of an “asymmetrical” response to new European Union sanctions over the Ukraine crisis.

Blaming the West for damaging the Russian economy by triggering “stupid” sanctions, Prime Minister Dmitry Medvedev said Moscow would press on with measures to reduce reliance on imports, starting with increasing output of domestic aircraft.

Positions

The President of Ukraine Petro Poroshenko met with Ukrainian troops yesterday (8 September) saying that he got “no illusions” that the Minsk agreement would hold, but still expressed hopes that the situation could improve.

Poroshenko said Ukrainian servicemen must be ready to defend the country. "It shouldn't take off our guard. We know our enemy well. We know the price of his words. I've got no illusions about our opponent, but I've got hope," he said.

According to Poroshenko, the OSCE mission on the control over the ceasefire regime will be increased by 500 observers soon. He also stated that in general, the ceasefire regime was complied with, except incidents in Donetsk and Mariupol.

The Ukrainian president noted that the Ukrainian army would change its defence in both tactical and strategic sense. He expressed confident that the enhancement of cooperation with NATO would facilitate that. "NATO managed to reach an agreement with several countries on direct supply of state-of-the-art weapons that will help us defend ourselves and win. Although we count solely on ourselves, we vitally need financial and technical military assistance. And we will get it," Poroshenko stated.

Ukraine’s Ambassador to the EU Kostiantyn Yelisieiev has commented on the EU’s decision to adopt a new package of sanctions against Russia:

 “We welcome the adoption by EU member states of a new package of restrictive measures against Russia within the third level of sanctions in accordance with the Conclusions of the European Council special meeting of 30 August.

We urge the European partners to implement this important decision without any delay in order to change the aggressor’s behaviour and ensure that Russian side fulfills the conditions clearly identified in the European Council Conclusions, primarily:

  • immediate withdrawal of all its military assets and forces from the territory of Ukraine;
  • closure of common border and ensure respective monitoring by the OSCE in order to stop the illegal flow of militants and armaments from the territory of the Russian Federation;
  • release of Ukrainian citizens illegally imprisoned in Russia.

Recent arrangement of the Trilateral contact group must not create any illusions: so far the Russian side has not fulfilled key demands of Ukraine and the EU. We should neither forget about the illegal annexation of the Crimea which will never be recognized by the international community.

Only a smart combination of diplomatic efforts and consistent motivating pressure by the EU are able to establish favourable conditions for implementation of the Peace Plan of the President of Ukraine based on ensuring the independence, sovereignty, territorial integrity and European choice of Ukraine”.

Background

NATO leaders made clear at a summit in Wales that their military alliance would not use force to defend Ukraine, which is not a member, but planned tougher economic sanctions to try to change Russian behaviour in the former Soviet republic.

>> Read: NATO summit pledges ‘tangible’ support to Ukraine

Ukrainian President Petro Poroshenko, who was present at the 4-5 September NATO summit, also took centre stage at the 30 August EU summit, where he said that the EU's agenda from now on would largely revolve around Ukraine.

>> Read: Poroshenko: The EU's agenda now revolves around Ukraine

At the summit, some EU leaders reportedly spoke about the need of military assistance to Ukraine, many demanded tougher sanctions, but reportedly Slovakia, Hungary and Cyprus made it clear they oppose further sanctions which they claim would hurt their countries more than Russia.

Further Reading