EU de­lays sanc­tions as truce holds

Financial Mirror (Cyprus) - - FRONT PAGE -

The Euro­pean Union adopted new sanc­tions against Rus­sia over its in­volve­ment in the Ukraine on Mon­day, but de­layed en­forc­ing them to leave time to as­sess whether a cease­fire in Ukraine is hold­ing, ac­cord­ing to the EU news and pol­icy site EurAc­tiv.com.

The sanc­tions, which tar­get the abil­ity of Rus­sia’s top oil pro­duc­ers to raise cap­i­tal in Europe, were orig­i­nally due to take ef­fect on Tues­day.

But that was pushed back by a few days after some EU gov­ern­ments sug­gested that new sanc­tions be put on hold to give a chance to a shaky cease­fire in east­ern Ukraine.

Some EU coun­tries op­posed to fur­ther pun­ish­ment of Moscow see the cease­fire, which was de­clared on Septem­ber 5 and still largely in­tact yes­ter­day, as an op­por­tu­nity to block the new EU sanc­tions pack­age and avoid re­tal­i­a­tion from Rus­sia, diplo­mats said.

“The en­try into force [of the new sanc­tions] through the pub­li­ca­tion in the Of­fi­cial Jour­nal will take place in the next few days. This will leave time for an as­sess­ment of the i mple­men­ta­tion of the cease­fire agree­ment and the peace plan,” EU Coun­cil Pres­i­dent Her­man Van Rom­puy said in a state­ment.

“De­pend­ing on the sit­u­a­tion on the ground, the EU stands ready to re­view the agreed sanc­tions in whole or in part,” he said after EU am­bas­sadors held an ex­tra­or­di­nary meet­ing to thrash out the is­sue.

An EU diplo­mat said there was no clar­ity on when the new sanc­tions would take ef­fect. Am­bas­sadors would prob­a­bly dis­cuss the is­sue next on Wed­nes­day.

Hint­ing at dis­unity in the EU, the diplo­mat said it would re­quire “po­lit­i­cal” support for the sanc­tions to take ef­fect, sug­gest­ing that am­bas­sadors would have to es­ca­late the is­sue to a higher level of their gov­ern­ments.

A dead­line for EU gov­ern­ments to agree to the new sanc­tions had ear­lier been pushed back.

The EU has al­ways been di­vided over sanc­tions on Rus­sia, with coun­tries such as Poland and the Baltics tak­ing a hard line, while the prime min­is­ters of Hun­gary and Slo­vakia have been pub­licly hos­tile to sanc­tions.

At Mon­day’s am­bas­sadors’ meet­ing, some EU gov­ern­ments wanted to dis­cuss whether the new sanc­tions should be frozen be­fore be­ing im­ple­mented be­cause of the cease­fire in Ukraine, or al­ter­na­tively if the new sanc­tions were i mple­mented, how they could be sus­pended and when.

The EU has al­ways said its would be re­versible if Rus­sia desta­bil­is­ing Ukraine.

Aus­tria, Fin­land, Swe­den, Cyprus and Slo­vakia were among coun­tries want­ing to give the cease­fire more time, ac­cord­ing to one EU diplo­mat.

The truce was largely hold­ing, though each side ac­cused the other of spo­radic shelling, in­clud­ing in Mar­i­upol, a city of about half a mil­lion peo­ple.

Ger­man Chan­cel­lor An­gela Merkel told con­ser­va­tive mem­bers of par­lia­ment in a closed-door meet­ing in Berlin on Mon­day that the sanc­tions were needed de­spite the cease­fire agree­ment, ac­cord­ing to sev­eral par­tic­i­pants.

Merkel told the deputies Rus­sia had al­ready de­ceived the West re­peat­edly with sanc­tions

stopped bro­ken prom­ises and she pointed out that Rus­sian troops are still in Ukraine, they said. The EU had to act de­ci­sively now, Merkel was quoted as say­ing.

The pro­posed new EU sanc­tions put Rus­sia’s top oil pro­duc­ers and pipe­line op­er­a­tors Ros­neft, Transneft and Gazprom Neft on a list of Rus­sian state-owned firms that will not be al­lowed to raise cap­i­tal or bor­row on Euro­pean mar­kets, an EU diplo­mat said ear­lier.

EU sanc­tions, how­ever, do not in­clude the gas sec­tor and in par­tic­u­lar state-owned Gazprom, the world’s big­gest gas pro­ducer and the big­gest gas sup­plier to Europe.

In gen­eral, the EU sanc­tions on Rus­sian com­pa­nies rais­ing money in the Euro­pean Union will ap­ply to firms that have turnover of more than 1 trln rou­bles (EUR 21 bln), half of which is gen­er­ated from the sale or trans­port of oil, the diplo­mat said.

A fur­ther 24 peo­ple will be added to a list of those barred from en­try to the bloc and whose as­sets in the EU are frozen.

De­tails of the new sanc­tions would only be made pub­lic when pub­lished in the EU’s Of­fi­cial Jour­nal.

The list is ex­pected to in­clude new separatist lead­ers in east­ern Ukraine, the gov­ern­ment of Ukraine’s Crimea re­gion an­nexed by Moscow, and Rus­sian de­ci­sion­mak­ers and oli­garchs.

Rus­sia sig­nalled it might ban Western air­lines from fly­ing over its ter­ri­tory as part of an “asym­met­ri­cal” re­sponse to new EU sanc­tions over the Ukraine cri­sis.

Blam­ing the West for dam­ag­ing the Rus­sian econ­omy by trig­ger­ing “stupid” sanc­tions, Prime Min­is­ter Dmitry Medvedev said Moscow would press on with mea­sures to re­duce re­liance on im­ports, start­ing with in­creas­ing out­put of do­mes­tic air­craft.

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