The beginning of the end for EU sanctions against Russia

Lots of “red flags” have been reported due to the scheduled visit of EU Commission President, Jean Claude Juncker, to the International Economic Forum of Saint Petersburg, Russia (16-18 June). From Reuters to Politico, the EU top official’s decision to travel to Russia has been perceived as a deviation from the common stance of EU members towards Moscow, as far as the economic sanctions are concerned. The critical ones are to be reviewed for extension by the EU Council before the 31st of July, while a series of recent developments indicate the zest to continue the sanctions is gradually wearing away.

Putin’s message

Plenty of interest and analysis was consumed in May to decipher Vladimir’s Putin visit to orthodox Greece, as much in Europe as in Russia. The German daily, Die Welt, for instance, reflected on Berlin’s misgivings regarding the Russian scope for purchasing strategic state assets in Greece, such as the railway network, the public gas corporation and the port of Thessaloniki.

Le Figaro contemplated on Putin’s endeavour of “religious diplomacy”, ie his decision to attend a prayer service at the monastic community at Mount Athos. According to French defense analyst, Guillaume Lagane, Moscow “presses the EU”, using Athens as leverage and the latter, at the same time, “shows it’s not alone”.

State controlled Sputniknews saw the Russian president’s visit to Greece as proof that “EU Officials Cannot Damage Russia’s Ties With European Partners”. And it’s not random that, after the debacle of South Stream and Turkish Stream pipeline projects, Mr Putin did reopen the discussion about the Poseidon pipeline, which would actually function complementarily to TAP…

Juncker in Russia

Considering the situation, it’s only natural for the United States and several EU members (UK, the Baltics etc.) to feel vexed by Juncker’s visit to Saint Petersburg. Besides, it’d be the first time an EU leader travels to Russia since March 2014, when the sanctions were launched.

In the meantime, circles of the Commission have leaked there is discontent among members of Juncker’s staff itself, particularly because it takes place a few weeks before the “certain” – according to EU Council President Donald Tusk – extension of the sanctions for another six months.

Nevertheless, the Commission’s spokesman Margaritis Schinas responded that “we don’t see any inconsistency with the decision of the president to attend” the SPIEF. If his plans don’t change, it’s likely the EU High Representative for Foreign Affairs, Federica Mogherini, will follow, according to diplomatic sources speaking to Politico. It’s worth noting that both Juncker and Mogherini have openly supported a broader view of EU’s relationship with Russia, one that several EU members would be happy to discuss, such as Hungary and Greece, who will have official representation at the SPIEF with a minister each.

Still, the Kremlin is realistic enough not to expect from Juncker more than a dialogue opening, as Dmitry Peskov implied.

The rift is real

Officially, the Europeans do keep reminding the public that any change to the sanctions status depends on the full implementation of the Minsk agreements. Beyond the Ukraine however, they realise their national political and economic interest prevail. Germany, Italy and France, in a different manner and extent, have attempted to actually undermine the sanctions.

Berlin, as weekly Spiegel reported, is considering to ease some of the sanctions (eg. individual travel restrictions) in exchange for Russian support the local elections in eastern Ukraine. Angela Merkel allegedly wishes to help Vladimir Putin not to appear as a divisive factor in Europe. This is in line with the  Vice-Chancellor Gabriel and foreign minister Steinmeier’s recent remarks in favour of dismantling the sanctions.

At the same time, both the French parliament and senate have moved forward in debating non-binding resolutions to end the sanctions against Russia. Waiving the sanctions would mean then Russia lifting its embargo against EU agricultural imports, helping so the French frail economy.

In Italy, the rich northeastern region of Veneto (which includes Venice), passed a resolution that not only calls for removing the anti-russian sanctions but also recognises the Crimean 2014 referendum, which resulted in the annexation of the peninsula.

Changing scenaria

It’d be unrealistic to expect any dramatic development with regard to the sanctions this summer, but change is likely to come sooner than related analyses suggest. The latest briefing by business data firm Dun & Bradstreet gives an 80% probability to the scenario the sanctions will “be removed within the next two years”, with “Russia
making at least some headway in implementing its Minsk commitments”. The wording is clear: “some headway”. And the 10% probability is assigned to the scenario of easing the sanctions, mainly due to their heavy cost on EU countries.

However, it’s been clear that neither Germany, France, Italy, nor Russia whatsoever will remain idle. Despite the renewal of the sanctions, the unity mentality in the Union is breached, and the removal of the sanctions is on the way, even with merely a little progress in the Minsk agreements.

 

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