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EU extends sanctions on Russia, says Ukraine blocking Minsk Agreement

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

At its last summit on 15th December 2016 the European Union decided to extend the sanctions against Russia for a further 6 months.  A demand by Poland that they be extended for 12 months to signal EU condemnation of Russian policy in Syria was however rejected.

One of the effects of the recent outcry against Russia over its actions in Aleppo is that it has solidified EU backing for the existing sanctions.  Though several EU states led by Italy have prevented more sanctions being imposed on Russia because of its actions in Syria, the trade-off is that they have had to back off from their demands – which were growing increasingly strong in the summer – for the existing sanctions to be lifted.

The paradox of this latest decision is that it is widely believed that an absolute majority of EU states now want the sanctions lifted, and that the EU itself now publicly recognises that the blame for the failure to implement the Minsk II agreement – the supposed reason for extending the sanctions – lies with Kiev, which is refusing to implement them, rather than with Moscow.

Thus even French President Francois Hollande, who together with German Chancellor Angela Merkel was one of those who demanded that the sanctions be extended, publicly criticised Kiev in words which in effect admit that it is Kiev which is holding up the process

The Ukrainian government should, also, for its part, fulfil its obligations under the Minsk Accords….

Needless to say, despite this admission, at the EU summit, none of the leaders present proposed that sanctions be imposed on Kiev in light of its failure to implement the Minsk II agreement.

As to Russia, German Chancellor Merkel telephoned Russian President Putin on the previous day.  She found him unyielding as the stiff wording of the Kremlin’s summary of their conversation shows

Regarding the peaceful settlement of the internal conflict in Ukraine, Mr  Putin and Mrs Merkel noted the need to intensify efforts to ensure the comprehensive implementation of the Minsk agreements of 12th February 2015.  The President of Russia stressed that the present situation requires above all that the Kiev security forces stop the provocative shelling of residential areas in Donbass, lift the socio economic blockade of the region and establish direct dialogue between Kiev, Donetsk and Lugansk.

In reality the decision to extend the sanctions was not made at the EU Summit on 15th December 2016, but shortly before during US President Obama’s tour of Europe.  At a summit meeting between Obama and the leaders of the biggest EU states – Germany, France, Britain, Italy and Spain – it was decided that the sanctions against Russia would be extended.

As I have repeatedly pointed out, the claim that every and all EU states equally possess a veto over decisions in the European Council is a fiction.  Any of the smaller EU states that had attempted to block the extension of the sanctions at the EU summit would have been scolded for ‘threatening EU unity’, and would have had its veto disregarded.  Only if a critical mass of EU states is prepared to stand up against the EU leadership – which essentially means the EU Commission and the governments of Germany and France – is there any possibility of an effective veto blocking any decision they have made.  Realistically that too can only happen if the smaller states wishing to take this step are joined by one or other of the two big second tie EU states: Spain and Italy.

The big difference in the decision to extend the sanctions on this occasion is that there was actually a discussion.  Previous decisions to extend the sanctions were made without discussion by the Council of Permanent Representatives.  However in the summer an increasing number of EU states – including significantly Spain and Italy – made clear this was no longer acceptable.

That fact, which forced Merkel and Hollande to defend their sanctions policy to the EU Council, is itself a sign that the consensus behind the sanctions has actually gone.

As for the Russians, my opinion is that they quietly welcome this decision.  The sanctions have worked entirely to their economic advantage, weaning their economy off Western lending, encouraging them to strengthen their financial system, and strengthening their agricultural economy as a result of the counter sanctions.

Whether the EU leaders who decided to extend the sanctions on 15th December 2016 understand this is another matter.


The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

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