EU leaders struggle to keep unity vis-à-vis Russia

European Council, 19 March. [European Council]

At their summit on Thursday night (19 March), EU heads of state and government couldn’t decide on an automatic roll-over of sanctions against Russia, which will expire in July. They also could not agree on having deals with Gazprom scrutinised by the European Commission, either.

A formal decision will be taken at the next EU summit in June, as to continuing the sanctions. Should one not be taken, they will be automatically renewed.

But the economic sanctions linkage to the Ukraine peace agreement effectively extends them until the end of the year, because the Minsk accord sets a year-end deadline for Ukraine to adopt a constitutional reform, and to grant de-centralisation to the regions of Donetsk and Luhansk, paving the way for Kyiv to recover full control over its border.

The adopted text reads:

“The European Council agreed that the duration of the restrictive measures against the Russian Federation, adopted on 31 July 2014 and enhanced on 8 September 2014, should be clearly linked to the complete implementation of the Minsk agreements, bearing in mind that this is only foreseen by 31 December 2015. The necessary decisions will be taken in the coming months. The European Council stands ready to take further measures if necessary.”

The compromise was drafted by European Council President Donald Tusk together with German Chancellor Angela Merkel and French President François Hollande, two of the architects of the Ukraine peace plan reached in Minsk last month.

The agreement only referred to economic sanctions, however, leaving open the possibility that some of the visa bans and asset freezes the EU has imposed on scores of Russian and Ukrainian citizens and organisations could be lifted before the end of 2015, if the situation in eastern Ukraine improved, EU diplomats said.

“If things deteriorate on the ground, we will strengthen sanctions. If, on the other hand, the situation remains stable and improves, then we might envisage a reexamination of the scale of the sanctions package and possibly ease it,” a French diplomatic source said.

Some EU ministers have said an offensive by pro-Russian separatists against the port of Mariupol would trigger stepped-up sanctions.

Merkel made clear when speaking to Germany’s lower house of parliament earlier on Thursday that economic sanctions on Russia would not be eased until the terms of Minsk had been fully met.

“We cannot and will not lift the sanctions that expire in July or September until the demands of the Minsk agreement have been fulfilled. That would be wrong,” she said.

No progress on lifting secrecy of Gazprom contracts

EU leaders also failed to make progress on one of the key pillars of the proposed Energy Union – lifting the secrecy of contracts with Russian gas exporter Gazprom.

Poland led the calls for the energy union to put an end to decades of secrecy over gas supply contracts, but Germany raised concerns that it could lead to the disclosure of sensitive data, diplomats said.

But a promise that the confidentiality of commercially sensitive information would be guaranteed had quelled opposition, they said.

The adopted conclusions read: “As regards commercial gas supply contracts, the confidentiality of commercially sensitive information needs to be guaranteed.”

“All leaders agreed to reinforce transparency in the gas market, so suppliers cannot abuse their position to break the EU law and reduce our energy security,” European Council President Donald Tusk said on Thursday.

Russia’s Gazprom, which supplies about a third of the EU’s gas needs, is the target of an EU antitrust investigation for allegedly overcharging customers in eastern Europe, thwarting rival suppliers and blocking the free flow of gas.

The EU is set to reveal the findings of its antitrust case against Gazprom anytime soon, the move being widely expected to fuel further tensions between Brussels and Moscow.

The leaders of Germany, France, Russia and Ukraine gave their support to a deal to end fighting in eastern Ukraine, following 17-hour long negotiations in the Belarussian capital Minsk on 12 February.

The four leaders committed to respecting Ukraine's sovereignty and territorial integrity, according to a joint declaration.

Western leaders are closely observing the implementation of the Minsk agreement.

>> Read: Western leaders discuss Ukraine over video conference

On 2 March, European leaders said that they agreed that the OSCE needed a broader role as observers of the ceasefire, and weapons removal.

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