EU’s new sanctions on Russia into force “in the next few days”: strength, weakness or strategy?

Dacian Cioloş, Member of the EC in charge of Agriculture and Rural Development, in a press conference following the Russian import ban on EU agricultural products (EC Audiovisual Services, 03-09-2014)

Dacian Cioloş, Member of the EC in charge of Agriculture and Rural Development, in a press conference following the Russian import ban on EU agricultural products (EC Audiovisual Services, 03-09-2014)

Last Saturday appeared as the possible beginning of a new phase for the Ukraine-Russia question, after a ceasefire was signed in the Belarusian capital, Minsk, between the Ukrainian government and rebels on Friday. Although both sides claimed on Saturday that the other had violated the ceasefire, the Associated Press reported that Donetsk was relative calm, the largest city controlled by the Russia-backed separatists, after months of daily shelling in residential areas.

The thud of grenades and the sound of the mortars seemed to be far all of a sudden, and people could regain some faith and get back to the streets again. Friday’s ceasefire appeared to be largely holding. But that was just illusory calm it seems, as the rest of the weekend unveiled the real thing, which is still a very uncertain and unstable situation.

First of all we should say that most of uncertainty is due to the fragility of the ceasefire agreement itself. Indeed Ukraine’s truce was breached repeatedly on Sunday as shelling was audible in the port city of Mariupol, and explosions were also heard in Donetsk. Although the atmosphere between the two frontlines on Saturday appeared immediately tense, there was calm and optimism until the night came, when the explosions filled the Ukrainian sky again. Ukraine’s President Petro Poroshenko is reported to have spoken on telephone with Vladimir Putin on Saturday on how to make the ceasefire last, but now a political solution appears to be a bit further away.

The other aspect that should be analysed carefully, which represents one of the main elements for the future stability of the entire matter, is the role the EU sanctions against Russia will play. And of course Russia’s reaction to them. The new sanctions, which European Union diplomats have decided to impose on Russia last week, came into force yesterday and the whole situation seems now to be on the verge of a new twisting.

Russia’s first reaction didn’t take too long to come, as expected. The Russian foreign ministry said in a statement: “As for the new list of sanctions from the European Union, if they are passed, there will undoubtedly be a reaction from our side”. Measures are complex and carefully balanced, I would say. They include the banning of some Russian state-owned defence and energy companies from raising capital in the EU. Also the EU might curb the export of dual-use technology to Moscow, such as machinery or computing equipment, and extend the sanctions to Russian individuals as well. Moreover the EU plans to add a further 24 people to a list of individuals who are banned from travel within Europe and whose assets in the region will be frozen. And this is something quite interesting. It’s evident that the new sanctions are intended to ramp up economic pressure on Russia.

The question now is though just whether these sanctions will be effective for real, or they are just a move that Russia was expecting and will not be worried about. The EU has already reached its third level of sanctions and this time apparently the aim is to act in a much more precise, almost “surgical” way. The EU is openly trying to hit influential people that consequently might try to put pressure on the Russian government for a quick resolution of the issue. In an official EU statement Manuel Barroso and Herman Van Rompuy declared indeed that the list of individuals includes the new leadership in Donbass, the government of Crimea as well as Russian decision-makers and oligarchs. And that is a fact.

On the other hand we have the “gas question”. I am sure that many of our readers often ask themselves whether putting pressure on Russia with economic sanction would affect also the European economy. It’s a fact that Europe has an enormous dependency on Russia’s gas. Countries like Finland and the Baltics are almost totally dependent on Russian gas supplies, and also southern countries like Italy would be severely affected by a “gas crisis”.

Well, the EU sanctions would affect Russia’s top oil producers and pipeline operators Rosneft and Transneft, as widely known, but won’t affect at all the gas sector and in particular the state-owned Gazprom, the world’s biggest gas producer which by the way is biggest gas supplier to Europe.

So basically we have the oil firms targeted on one side – although Rosneft would be prevented only to raise money in Europe, and not dragged away from actual business with the EU – and the gas sector untouched on the other side. Is this a sign of weakness from the European side? Or just a clever move? Whatever it might be, the Russian Prime Minister Dmitry Medvedev had already warned that Moscow would respond “asymmetrically” to further sanctions, intimidating that a Russian airspace ban “could drive many struggling airlines into bankruptcy”, as reported yesterday by many news outlets including the BBC.

EU President Herman Van Rompuy said in a statement that the sanctions will enter into force “in the next few days”, “depending on the situation on the ground”. Indeed the sanctions could be later suspended if the ceasefire holds, as widely announced by EU spokespersons in the last days.

The decision of taking a few more days to fully apply the measures is addressed as a way of leaving time and space in the statement “for an assessment of the implementation of the cease-fire agreement and the peace plan”.

And taking time in international affairs and diplomacy is probably the best strategy of all.

Follow @carlomotta_ on Twitter

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

France fails again the exams. Kindly requested to sit in on Commission’s class

“Is Europe innovative? Oh, Yes we are very innovative!”, Director General of the European Commission Mr Robert-Jan Smits on another Sting Exclusive

CDNIFY @ TheNextWeb 2014

European Court rules that ECB’s OMT program of 2012 is OK; not a word from Germany about returning the Greek 2010 courtesy

COP21 Breaking News_09 December: The Draft Agreement Updated

On European immigration: Europe’s Missing Citizens

Commission’s spending totally uncontrolled

Can Obama attract Iran close to the US sphere of influence?

ECB’s new money bonanza handed out to help the real economy or create new bubbles?

Elections in Britain may reserve a surprise for May’s Tories

European Union disenchanted with Turkey

Germany tries to save Europe from war between Ukraine and Russia

Unemployment and stagnation can tear Eurozone apart if austere policies persist

A new Europe for people, planet and prosperity for all

Will ECB win against low inflation by not following Quantitave Easing?

The EU Commission implicates major banks in cartel cases, threatens with devastating fines

“None of our member states has the dimension to compete with China and the US, not even Germany!”, Head of EUREKA Pedro Nunes on another Sting Exclusive

South Eurozone needs some…inflation and liquidity

Young and unemployed the perfect victims of ‘vultures’

Berlin favours economic and social disintegration in certain Eurozone countries

Historical success for the First ever European Presidential Debate

D-Day for Grexit is today and not Friday; Super Mario is likely to kill the Greek banks still today

The Commission sees ‘moderate recovery’ but prospects deteriorate

Global Talent – Professional Internships

SPB TV @ MWC14: The TV of the Future

Greece and Ukraine main items on EU28 menu; the course is set

Opening Remarks by H.E. Ambassador Yang Yanyi, Head of the Chinese Mission to the EU at the Chinese Fashion Night

ECB describes in detail how it exploits the poor

European Young Innovators Forum @ European Business Summit 2014: Europe for StartUps, vision 2020

The next EU President will first have to drink his tea at Downing Street

Young people are Europe’s biggest value and hope

EU leaders slammed on anti-tax evasion inaction and expensive energy

Draghi reserved about Eurozone’s growth prospects

Kellen Europe Hosts EuroConference 2016

The EU patent space and Unified Court are born

Mario Draghi didn’t do it but Kim Jong-un did

A European Discovers China: 3 First Impressions

E-Government can be a remedy for the crisis

Inegalitarian taxation on labour haunts Europe’s social model

Public opinion misled by the Commission on air transport safety

Young people all over the world come together to demand paid good quality internships

Commissioner sings “Volar-e” but the European driver no “Cantar-e”

Lithuania finds the ways to maintain its energy security

Commission’s Youth Initiative fails first hurdle by not sufficiently consulting young people

Last-chance Commission: Why Juncker promised investments of €300 billion?

From Russia with love: Brussels and Moscow close to an agreement on Ukraine’s gas supplies

Greece returns to markets at a high cost to taxpayers, after four years out in the cold

How many more financial crises in the West can the world stand?

A Sting Exclusive: EU Commission’s Vice President Šefčovič accentuates the importance of innovation to EU’s Energy Union

Tax evasion and fraud threaten the European project

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s