Greece blocks common position on Russian sanctions

By bne IntelliNews January 29, 2015

bne IntelliNews -


Greece has blocked EU proposals on a renewal of sanctions against Russia, which could force the EU to pull back from tighter sanctions despite the escalation of fighting by Russian-backed rebels in East Ukraine.

Permanent representatives of EU member states drafted a common position for presentation to a EU foreign ministers meeting on January 29 in Brussels, containing proposals on how sanctions against Russia could be tightened.

But the Greek representative blocked key clauses in the final statement, New Europe reports, and the EU foreign ministers will now have to find a compromise.

Greece's new radical government headed by Alexis Tsipras, elected on January 25, has indicated it is likely to support the Russian stance in the ongoing Ukraine conflict, thwarting the EU's attempt to presented a united position. Immediately on assuming office, the government protested against a statement from EU heads of government on possible further sanctions against Russia, saying it had not been consulted.

The draft statement, discussed on January 29 by the permanent representatives, proposes to extend sanctions against Russia - due to expire in March 2015 - until September, while adding new names to the list of individuals sanctioned. The sanctions under discussion are relatively minor assets freezes and travel restrictions imposed on Russian officials after Russia's annexation of Ukraine's Crimea in March 2014.

"In view of the worsening situation, the council [of foreign ministers] agrees to extend the restrictive measures targeting persons and entities for threatening or undermining Ukraine's sovereignty and territorial integrity ... until September 2015,” says the conclusion of the draft statement, New Europe reports. 

The draft conclusion notes evidence of Russian support for separatists, but instructs the European Commission only to perform "preparatory work" on further sanctions, while the EC says it has already performed "extensive preparatory work".

The decision on further economic sanctions on Russia is likely to be left to EU leaders who next meet in Brussels on 12 February.

EU hawks have discussed further restricting Russia's access to capital markets for both sovereign and corporate borrowers. Britain, Sweden, Poland, Romania and the Baltic states are believed to be among the hawks, demanding a timeframe for new sanctions, according to the Financial Times. Opposition to new sanctions is coming not just from Greece: France, Italy and Germany are believed to be pushing back over further sanctions.

German Economy Minister Sigmar Gabriel told the German parliament on January 29 that it was still too early for new sanctions. “No-one in Europe and certainly not in Germany has any interest in further, tougher sanctions, and Europe and the whole world clearly need Russia as a partner to solve global conflicts and challenges,” said Gabriel, as quoted by the Financial Times.

Corporate sanctions restricting Russia's state-owned banks and oil companies from tapping international financial markets will probably prove even harder to renew when they expire in July, one year after imposition.

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