Extended sanctions on Russia, EU’s internal differences revealed

Ambassadors from the 28 member states agreed unanimously on June 21 to prolong the sanctions until January 31, 2017, because they said there has been no progress in settling the conflict in Ukraine. 

The decision followed Russia’s hosting of the International Economic Forum in Saint Petersburg from June 16 to 18. Addressing the forum, which is considered a miniature version of the Davos Forum, President Vladimir Putin said he is ready to remove retaliatory measures against the EU first on the condition that the EU will do the same.

Internal differences

The decision was made in the context that many EU members have called for improved ties with Russia. Many EU politicians have resumed relations with Russia after a long period of tensions due to differences over the Ukraine conflict. Italy, Hungary, and Greece have questioned the necessity of extended sanctions. 

Italian Prime Minister Matteo Renzi has called for discussions of the effectiveness of economic sanctions before any extension. Paolo Grimoldi, Secretary General of Italy’s Northern League and a member of Parliament, said sanctions against Russia have caused a loss of 3.7 billion euros in Italy’s exports to Russia.  

German Foreign Minister Frank Walter Steinmeier said the EU should gradually remove sanctions against Russia. Ealier this month, the French Parliament approved a non-binding resolution calling on the government to loosen sanctions against Russia. 

Thierry Mariani, a member of the Center-right Republican Party, said sanctions on Russia have not been effective and have harmed the French economy so they should be lifted.

Slovakia’s Foreign Minister Miroslav Laycheck has admitted an increasing need of a political discussion on the lifting of sanctions against Russia. Nadezhda Savchenko, a member of the Ukrainian delegation to the Parliamentary Assembly of the European Council, said she supports the gradual lifting of economic sanctions.

Analysts say the EU should focus on settling the current migrant crisis because sanctions against Russia have caused significant losses.

Baltic countries and Poland, however, oppose the lifting of sanctions against Russia. British Foreign Secretary Philip Hammond also supports their stance, saying that relevant discussions would be impossible before peace was restored in eastern Ukraine.

EU members are divided over Russia. German Foreign Minister Frank Walter Steinmeier said reaching consensus on increasing sanctions against Russia is more difficult than a year ago. 

France’s Le Monde newspaper commented that the EU extended its sanctions on Russia because it was not the right time and because it wants to maintain internal unity.

Losses to both sides

The EU imposed economic sanctions on Russia in July, 2014. Sanctions were tightened targeting Russian banks, energy groups, and weapons in September, 2014. 

The EU is currently Russia’s leading trade partner, accounting for 45% of its trade revenue in 2015. Russia is the EU’s fourth largest trade partner after the US, China, and Switzerland. It is also one of Europe’s biggest suppliers of natural gas and crude oil. Two-way trade reduced from US$420 billion in 2013 to US$230 billion in 2015 as a result of sanctions.