News / Europe

EU's Russia Sanctions Seen as Limited for Now, Despite Tough Talk

The logo of Russia's top crude producer Rosneft is seen on a price information board of a gasoline station in Moscow July 17, 2014.
The logo of Russia's top crude producer Rosneft is seen on a price information board of a gasoline station in Moscow July 17, 2014.
Reuters

For all the tough talk, Europe is not likely to punish Russia over last week's downing of an airliner over Ukraine beyond speeding up the imposition of already agreed individual sanctions when the bloc's foreign ministers meet on Tuesday.

The severity of future European Union sanctions could depend on the Netherlands, which suffered the greatest loss of life when the Malaysia Airlines flight was brought down.

President Barack Obama has piled pressure on Europe for a more forceful response and the three leading EU powers - Britain, France and Germany - said they should be ready to ratchet up sanctions.

Britain, in particular, said it was willing to suffer the economic consequences.

But diplomats said Tuesday's meeting was not expected to go further than agreeing on companies and people to be hit with asset freezes under a more aggressive framework agreed last week. Previously, they had only said they would decide on the list by the end of July.

Several diplomats said moving towards more sweeping economic sanctions could only be decided by heads of government. The attitude of the Netherlands, which lost 193 people in the incident, would be critical, diplomats said.

The next scheduled summit of EU leaders is on August 30, although EU members could call for another emergency meeting.

“The impulse must come from The Hague because they have the moral mandate to demand a resolute, firm reaction. Everything depends on that,” one EU diplomat said on condition of anonymity.

“I think the events will serve to speed up sanctions, but as long as no new European council [of leaders] is called, ministers cannot go further even if they want to,” another EU diplomat said.

Proof?

A summit of EU leaders on July 16, the day before the airliner was shot down, agreed the EU would sanction Russian companies that help to destabilize Ukraine and block new loans to Russia.

The wording was deliberately vague as the meeting agreed to target “entities, including from the Russian Federation, that are materially or financially supporting actions undermining or threatening Ukraine's sovereignty.”

The United States and its allies have blamed pro-Russian rebels and Moscow itself over the downing of the plane. Russia has denied involvement.

Speaking in parliament on Monday, Dutch Prime Minister Mark Rutte said the EU would impose further sanctions on Russia if it were proved that Russia was directly or indirectly responsible for bringing the plane down.

His words cast doubt over whether the disaster would prove to be a turning point for international pressure to resolve the crisis in Ukraine, which has killed hundreds since pro-Western protests toppled the Moscow-backed president in Kyiv in February and Russia annexed the Crimea peninsula a month later.

‘Collective economic suicide’

On Monday, EU diplomats made clear sectoral sanctions would still be extremely difficult for some of Europe's poorer nations. They are especially nervous about the energy sector, central to the Russian economy, but also to the European Union.

EU nations rely on Russia for about 30 percent of their gas demand and have intertwined interests based on decades of energy reliance. According to U.N. data, excluding Russian gas exports - around $60 billion a year - the Netherlands was Russia's biggest export destination last year, mostly oil and metals.

“Energy sanctions would most likely derail the fragile European recovery in general and could even lead to a complete economic collapse in certain member states,” one diplomat said. “I don't see how collective economic suicide serves us or the Ukrainians.”

While some member states, such as Britain, do not rely on Russian gas, others are 100 percent dependent on Russia, having no other suppliers. In volume terms, Germany and Italy have the biggest exposure.

Diplomats said that if energy had to be part of any sanctions regime, the European Union would have to agree ways to share the financial burden.

Britain has said it too would suffer from any economic sanctions but it is willing to pay the price.

“I would say... any sanctions will have an economic impact, and we are prepared to undertake further sanctions,” British Finance Minister George Osborne told BBC radio's Today program on Monday. “But think of the economic hit... of allowing international borders to be ignored, of allowing airlines to be shot down - that's a much greater economic hit for Britain and we're not prepared to allow that to happen.”

London is a prime destination for Russian businesses and Russian oligarchs are major property owners in Britain.

Energy major BP already faces the prospect of fallout following the U.S. decision to sanction Russia's largest oil firm Rosneft, of which BP owns a fifth.

Another sensitive area is defense. France has said so far it is going ahead with a 1.2 billion euro ($1.6 billion) contract to supply Mistral helicopter carriers to Russia because canceling the deal would do more damage to Paris than to Moscow.

On Monday, a French defense ministry official said any decision on whether to suspend the delivery of the first warship would only take place in October.

You May Like

UN Watchdog Urges Israel to Probe Possible Gaza War Crimes

More than 2,100 Palestinians, most of them civilians, were killed in a 51-day war in Gaza, along with 67 Israeli soldiers and six civilians in Israel More

New Kenyan 'Thin SIMs' Poised to Transform African Mobile Money

Equity's new technology is approved in African nation for one-year trial, though industry leader Safaricom says thin SIMs could lead to data theft and fraud More

Solar's Future Looks Brighter

New technology and dropping prices are contributing to a surge in solar power More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Talks to Resume on Winter Gas for Ukrainei
X
Al Pessin
October 25, 2014 4:21 PM
Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Talks to Resume on Winter Gas for Ukraine

Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.

All About America

AppleAndroid