EU summit to consider how to improve Russia ties without dropping sanctions

The European Council table. [European Council]

Next month, European Union leaders will explore the possibility of improving strained ties with Russia in response to growing irritation among some member states over economic sanctions imposed on Moscow over its role in the Ukraine crisis.

But the sanctions appear likely to remain in place for now, especially those slapped over Crimea, the Black Sea peninsula seized by Russia in March 2014, despite the legal and political challenges of maintaining them.

A series of Reuters investigations recently showed how European companies including German engineering group Siemens and French retailer Auchan were finding ways around the punitive sanctions regime in Crimea.

How EU firms skirt sanctions to do business in Crimea

Products for sale in the Crimean stores of two European retailers are being shipped there from Russia via a ferry and port subject to EU sanctions, transportation employees said, indicating that companies are finding ways to dodge the punitive regime in place since 2014.

EU leaders will review the state of relations with Russia at a summit on 20-21 October, with the hawks’ camp weakened by Britain’s decision to leave the bloc and by increased strains between Brussels and Poland’s nationalist-minded government.

Countries sceptical about extending sanctions include Italy, Greece, Cyprus, Slovakia and Hungary. They are keen to return to doing business with Russia, the EU’s main gas supplier, not least to help offset Europe’s sluggish economic growth.

“It will be increasingly difficult to go on extending the sanctions. But this could be done if the key sceptics are convinced that there are other elements in the EU’s policy on Russia, not just sanctions,” said a senior EU official.

France wants EU summit to discuss Russia sanctions

France on Monday (20 June) called for EU leaders to have a full discussion on the future of economic sanctions imposed on Russia over Ukraine, even though they are expected to be rolled over shortly.

“There will be those who want to lower the bar for Russia, give a signal that if only Moscow makes a little move, the EU would want to normalise the situation a bit. Then there will be those who want to raise the bar,” a second EU official said.

Germany: EU faces 'difficult' talks on Russia sanctions

Germany said on Thursday (26 May) that the EU is facing difficult talks on extending sanctions against Russia over the conflict in Ukraine due to the increased resistance of some member states, and denied that a new Cold War was afoot.

“Eventually we’ll stay more or less where we are. The advantage of those who want easing is that you need unanimity to extend sanctions. But no one wants to be alone in blocking (an extension). It would be different if a few of them came out together.”

‘Mutual interests’

The EU first imposed sanctions after Russia seized Crimea following a Western-backed uprising against a pro-Russian leader in Kyiv. It then widened the sanctions over Moscow’s backing for rebels battling Kyiv’s forces in eastern Ukraine in a conflict that has killed more than 9,500 people since April 2014.

Efforts to establish a full truce in eastern Ukraine and advance a wider peace plan there have stalled for many months and the EU has few new ideas on how to handle Moscow.

The sanctions include travel bans and asset freezes on people and entities; curbs on energy, financial and defence dealings with Russia and limits on doing business in Crimea.

Italy has urged a thorough EU debate on the value of the sanctions instead of allowing a technical extension every six months. The economic sanctions are next due to be extended in late January.

States less friendly towards Russia now increasingly accept that some concessions may be needed to maintain unanimous backing for the sanctions regime.

“We do need to talk about our mutual interests with Russia but remain united on sanctions,” said one such diplomat.

Germany, the EU’s biggest economy, backs this approach. But with distrust between Brussels and Moscow running high, it will be tough to make progress even in areas where they have shared interests such as fighting terrorism or drug-trafficking.

German economy minister to discuss EU sanctions with Putin

German Economy Minister Sigmar Gabriel, heading to Moscow for talks about trade with President Vladimir Putin, said on Wednesday (21 September) that he favoured a lifting of EU sanctions on Russia but that would require making progress on peace in Ukraine.

Other ideas for improving ties with Moscow include encouraging more trade or international cooperation. But deep disagreements between Russia and the West over Syria highlight the difficulties here.

Further out, it seems all but impossible that the EU and Russia will be able to hammer out an accord over Crimea. Russia says it will never return the peninsula to Ukraine while the West refuses to accept its annexation.

Meanwhile, EU officials say they are aware of cases of European companies exploiting legal grey areas to continue doing business in Crimea – as revealed in the Reuters investigations – but said this did not undermine the wider sanctions policy.

“Throughout history we see surreptitious ways of busting sanctions,” said an EU official who deals with Russia. “But the key ones are the economic sanctions and the most important objective is keeping unity on that.”

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