German foreign minister mulls phased lifting of Russian sanctions

German foreign minister mulls phased lifting of Russian sanctions
Vladimir Putin with German Foreign Minister Frank-Walter Steinmeier at the Kremlin in March 2016.
By bne IntelliNews May 31, 2016

German Foreign Minister Frank-Walter Steinmeier mulled the idea of a phased removal of sanctions on Russia, also long as there was "progress in the implementation of the Minsk agreements on Ukraine", he said on May 30 during the so-called Potsdam meetings, a German-Russian Forum convened in Berlin.

"Sanctions is not an end in itself, is not a means to put partner on their knees, no one may be interested in the economic weakening of Russia,"  Steinmeier said, Vedomosti daily reported.

The EU sanctions will almost certainly be extended in June, but the resolve to stick to the measures despite the hurt caused to both sides economically is weakening. Italy and Hungary, two of the Kremlin's closest allies in Europe, are a lot less committed. Italy said on March 10 that the extension of sanctions on Russia would not be automatic, in the most public sign yet of fraying unity on how to deal with Moscow. "We cannot take for granted any decision at this stage," Italian Foreign Minister Paolo Gentiloni told reporters after a meeting with his EU peers in Brussels, where Russia's EU policy was discussed for the first time in more than a year.

Part of the problem is Ukraine's failure to fulfil several articles of the Minsk agreement by the deadline set in the Minsk II protocol including: hold elections in the disputed regions, introduce an amnesty law and change the constitution to decentralise regional control before the end of 2015. The constitutional change is thought to be impossible at the moment and the government will not raise the requisite 300 votes. Holding the elections in the disputed regions while separatists are in control is also next to impossible. However, the amnesty law is ready to go and only needs the president's signature.

For its part, Russia continues to supply and control the rebels in the region and the ceasefire is more of a 'lessfire', with casualties on both sides reported on a daily basis. However, the Minsk II agreement is vague on Russia's withdrawal of its forces, which Moscow has taken to mean "only after the Ukrainian side fulfil its main obligations". However, Minsk II is explicit on when Russia should return the control of the border: only after the constitution has been changed.

With the situation in the Donbas war zone effectively now a frozen conflict, Europe is tiring of the deadlock that has seriously destabilised central Europe and cost European producers. The German business lobby is pushing its government hard to find a resolution as German companies are heavily invested into Russia. Moreover, Russia's influence elsewhere could play an important role is solving other international disputes.

Steinmeier highlighted this point saying: "There is no problem in the world, in which the resolution does not require the participation of Russia, including Syria, Libya, Nagorno-Karabakh." 

Intensive talks are going on in the background, according to bne IntelliNews sources as both sides want a way to end the impasse while still saving face.