Putin tries to heal Europe ties

Sanctions to remain until Ukraine truce reached: Juncker

Russian President Vladimir Putin on Friday said he was willing to reach out to Europe to mend relations shattered by the Ukraine crisis but insisted the West was responsible for the bad blood.

Putin was making a pitch at Russia’s major annual economic forum in Saint Petersburg to improve business ties with Europe as Moscow tries to breathe life into its recession-hit economy battered by Western sanctions.

“European business wants and is ready to work with our country. European politicians need to reach out to business, to show wisdom, far-sightedness and flexibility,” Putin said.

“We remember how all this started. Russia did not initiate today’s collapse,” he said. “We hold no grudge and are willing to reach out to our European partners but obviously this can’t be a one-sided game.”

Russia’s energy-driven economy is locked in its longest slump since 2000, caused by both Western sanctions and a slump in the oil price.

As Putin was talking news emerged that the EU had rolled over for another year sanctions adopted in response to Moscow’s absorption of Crimea, which prohibit the EU from doing business on the peninsula.

Sources in Brussels say that broader economic sanctions over the pro-Russian uprising in east Ukraine that have hit Russia’s financial sector could be extended by the EU as early as next week ahead of their expiration at the end of July.

Speaking in Saint Petersburg, the head of the EU commission Jean-Claude Juncker warned Russia that the economic sanctions would not be dropped until Russia fully implemented a peace deal to end the Ukraine war.

“The next step is clear: full implementation of the agreement – no more, no less,” Juncker told Russia’s main economic forum ahead of a meeting with Putin. “This is the only way to begin our conversation and the only way to lift the economic sanctions that have been imposed.”

The Juncker-Putin meeting is their first in Russia since the EU slapped sanctions on Moscow in 2014.

Russia’s GDP fell some 3.7 percent last year and the IMF predicts its economy will shrink by 1.5 percent this year before experiencing modest growth in 2017.

Putin, who has previously insisted that the worst of Russia’s economic crisis is over, said that he was targeting a return to growth rates of “no lower than 4 percent.”