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)

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.

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