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EU and Russia extend sanctions against each other

Russia's extension of its counter sanctions for 18 months signals how Russia is now benefitting economically from the sanctions

This article first appeared on Russia Feed

As was universally predicted, the European Council meeting last week ended with a decision to extend the sectoral sanctions which were imposed on Russia in July 2014 for a further 6 months.

As was also universally predicted this has led to a reciprocal decision by Russia today to extend Russia’s counter-sanctions banning imports of most food products from the EU.

It is widely known – though never publicly admitted – that a majority of EU states think the decision to impose sanctions on Russia was a huge mistake, and that they bitterly regret having let themselves be strong armed by the Germans into doing it.  However with Angela Merkel’s personal authority now bound up with the sanctions there is no possibility of Germany changing its position so long as she remains Germany’s Chancellor.

As I have said repeatedly, so long as Germany and the EU bureaucracy are committed to maintaining the sanctions, the sanctions will be maintained, and any protests or demands to lift them from any of the other EU states will simply be brushed aside.  It is a fundamental fallacy to suppose that any of the smaller EU states is in any position to veto the sanctions, or that its veto would be heeded if it tried to wield it.

The only other EU state that carries the necessary weight in the European Council to wield an effective veto against a German decision to extend the sanctions is France, and the recent victory of Emmanuel Macron in the French Presidential election was in part deliberately engineered to ensure that that wouldn’t happen.

Whilst Italy and Spain also in theory have the necessary to weight to veto an extension of sanctions, the way the machinery of the Italian Presidency was used in 2011 to force the resignation of former Italian Prime Minister Silvio Berlusconi serves as a warning to any Italian or Spanish leader of what they risk if they choose to defy the will of Brussels and Berlin.

Only if the dissident EU states decide to act in concert and defy the central European leadership as a group would they be able to override a decision taken in Berlin and Brussels.  At the present time on the sanctions issue there is no prospect of this.

They key point however is that with the Russian economy now recovering strongly, the point is now passed when the sanctions were doing Russia any material damage.  On the contrary, far from weakening Russia’s economy, the sanctions have helped the Russians strengthen their financial system and above all their agricultural sector, which is now booming.

The most significant sign of this is a step the Russians in conjunction with their decision to extend the counter-sanctions.

Whereas the EU’s sectoral sanctions have been extended for 6 months – to the end of this year – the Russians have extended their counter sanctions to 31st December 2018 ie. for 18 months.

That means in theory that the Russian counter sanctions might continue for longer than the EU sanctions they were enacted to respond to.

In reality, no one in Moscow seriously doubts the EU sanctions will continue to be extended throughout 2018 as well irrespective of what happens in Ukraine.

The Russian decision the extend the counter sanctions beyond the technical expiry of the EU sanctions at the end of December 2017 is however intended to emphasise a point – that Russia actually benefits more from the sanctions than it suffers from them – whilst sending a message to Russia’s producers (especially Russia’s farmers) that they can be confident of the government’s continued support irrespective of what the EU does.

Indeed one Russian official has even spoken of Russia continuing with the counter sanctions for up to 10 years (!), with the implication that it would actually be better for Russia if the EU sanctions could be extended for such a period also.

There could be no more damning comment on the effectiveness of the EU’s sanctions strategy than that.

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Alexander Mercouris
Editor-in-Chief atThe Duran.

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