As European diplomats prepare to meet on July 29, signs are emerging that the European Union is finally moving towards the consensus required for tougher measures against Russia to be imposed by the 28-nation bloc.
The July 17 downing of the Malaysia Airlines passenger jet over
territory controlled by Russian-backed separatists, killing all
298 people on board, appears to have stiffened the resolve of politicians and also prompted reluctant business groups to back further measures.
A view is
emerging that Moscow, believed to have supplied the surface-to-air missile that shot down flight MH17, must be directly challenged if the three-month conflict between Russian-backed insurgents and government forces in eastern Ukraine is to be resolved.
Thus far the EU has restricted punitive action against
Moscow to asset freezes and visa bans targeting members of Putin’s inner
circle. But according to a draft EU statement dated July 25, acquired by
several news sources, the 28-member bloc is considering introducing so-called “phase three” sanctions targeting entire sectors of
the Russian economy.
The
proposed measures prevent exports of “key equipment and technology for the oil
industry,” although the EU is not expected to fully halt trade with Russia’s
gas industry for fear of provoking retaliation against countries dependent on
Russian gas. The measures also deprive Europeans of the ability to “directly or
indirectly transact in,
provide financing or investment services for, or otherwise deal in” long-term
debt or stock newly issued by state-owned Russian banks, the Financial Times reports.
The measures
are also expected to include a blanket arms embargo as well as a ban on
“dual-use” exports if the suppliers “have grounds for suspecting” items may be
for military use.
Shifting mood in
Europe
In recent days, highly-placed officials from key EU member
nations have made statements in support of further action against Moscow. The
campaign is being spearheaded by the United Kingdom and the Netherlands, whose
nationals comprised the majority of those aboard the doomed Malaysia Airlines
plane.
Opposition to further
sanctions in the United Kingdom has predominantly come from London’s financial
sector. Freezing the assets of Russia’s business elites and moving to restrict
their access to Europe’s financial capital would impact growth prospects in the
UK, and business groups within the country have been lobbying Prime Minister David Cameron for months to oppose such measures.
Nevertheless, the mood
in the UK appears to be shifting in line with the international community’s
realization that the MH17 disaster and Russia’s continued aggression needs to be stopped. British Trade Minister
Lord Livingston told the Daily Mail on July 27 that that the UK’s
diplomatic credibility depends on the city bearing the brunt of further
sanctions.
“I’ve heard some people say ‘oh,
the city of London isn’t going to take the pain’ but that’s not true. We’ve got
to make sure that the whole of Europe thinks that the UK is absolutely willing
to take its share of the pain and do the right thing,” he told
the newspaper.
Of equal significance are changing perceptions among the
business elites in Germany, a country for months split between factions
variously disposed towards maintaining trade ties with Moscow. Europe’s biggest
economy constitutes around a third of the EU’s total trade with Russia, but the
first four months of 2014 have seen a 14 percent fall in Germany’s exports to
its large eastern neighbor.
German business groups have warned of a major loss of jobs
in the country should further sanctions against Moscow be imposed, although
recent developments seem to have provoked a reassessment of the risks involved.
Ulrich
Grillo, head of the Federation of German Industry, acknowledged the
effect that broader sanctions would have on economic prospects in the EU and
Germany, but argued that the 28-member bloc must take the hit if it wants to
ensure peace on the continent.
“Tougher
sanctions will bring significantly more noticeable repercussions. However, the
economic damage suffered by Germany and other EU countries will be more than
cancelled out if we succeed in enforcing international law in Europe and a
legal framework more generally,” Grillo told German business daily
Handelsblatt.
Even Der Spiegel, Germany’s most
renowned publication internationally, appears to be retreating from its usually
reserved stance in support of broader sectoral sanctions against the Putin
regime. The cover of
this week’s edition displays the faces of the victims of flight MH17 with the
words “Stop Putin now!” in large red lettering. Furthermore, the publication’s
own survey
revealed that most Germans now support the implementation of tougher punitive
measures against the Kremlin, even if this leads to a large loss of jobs in the
country.
Against this backdrop, France continues to face a backlash
over its planned $1.6 billion sale of Mistral warships to Russia, a deal the administration of French President Francois Hollande has staunchly defended. The arms embargo included in the leaked EU document is not
expected to preclude existing defense contracts from going ahead, paving the
way for France to execute the sale.
In a statement last week, Hollande
confirmed the sale of the first Mistral to Russia will go ahead in October.
However, in an apparent concession to EU diplomats critical of the deal, he
revealed that the sale of the second warship will be placed on hold pending
further developments in Ukraine.
Responding to the EU’s accusations, Paris has in turn
accused the United Kingdom of hypocrisy for lambasting its defense contracts
with the Kremlin while at the same time allowing the City to continue operating
as a hub for Russian capital. Nonetheless, having received the green light for
its deal with Moscow, France may well fall in line with most other EU states
and give its approval to fresh sanctions on July 29.
Moscow ridicules US ‘proof’ of Russian rocket strikes against Ukraine
The developments come as the U.S. releases satellite
images which Washington claims are further evidence of Russia’s hand in
destabilising Ukraine’s east.
The photos, contained within a four-page
document published online on July 28 and attributed to the U.S. State
Department, purport to show blast marks caused by rocket launches from Russian
territory and craters on the Ukrainian side of the border. They were shared on
Twitter by America’s ambassador to Ukraine Geoff Pyatt following their release.
Russian state-owned
channel RT has questioned
the authenticity of the images, citing U.S. economist and former government
official Paul Craig Roberts as saying that information of such importance would
not be released by the State Department in such a way. It also reported on Russian
border guards’ claims that at least 45 mortar shells were fired by Ukraine’s
army at targets located in Russia’s Rostov region, destroying houses and
forcing civilians to flee.
Responding to the
likelihood of further sanctions against the Kremlin, Russian Foreign Minister
Sergey Lavrov said on July 28 that proposed measures by the EU would fail in
their goal to cripple Russia’s economy and only make it more independent.
“(Sanctions) simply cannot achieve (their aim) … I assure you, we
will overcome any difficulties that may arise in certain areas of the economy,
and maybe we will become more independent and more confident in our own
strength,” Lavrov told a news conference, according to Reuters.
Russia toughened its own economic measures against Ukraine on July 28 by
banning imports of milk and daily products from its western neighbor, Interfax
reports.
Kyiv Post staff writer Matthew Luxmoore can be reached at [email protected] and on Twitter at @mjluxmoore.
