Friday, 11 April 2014

EU and US not ready for economic fines on Russia

The Foreign affair ministers on Monday in Luxembourg are not going to decide for sanctions, in line with Obama's decision to enlarge the number of people listed

by Emanuele Bonini

The European Union is still uncertain and divided over economic sanctions against Russia. On Monday the foreign affairs ministers of the twenty eight will meet in Luxembourg, but they are not going to launch the “third stage” of the common strategy for Ukraine, that one opening the way to economic restrictions against Russia. In Europe there are different positions and different interests, but the majority of the EU member states share the need of delaying the adoption of economic measures. Just few countries – Lithuania, Poland and Czech Republic – are in favour of tougher positions, with the United Kingdom – not dependent by Russian gas as on the contrary are others and for this reason more free to call Russia out – at work on a de-escalation strategy in the country in view of the presidential elections at the end of May. The impression is Europe want to standardize its policy to that one of the transatlantic partner. The United Stated could soon list other people among all the personalities to be sanctioned. This choice lies in the economic interests of the United States: economic sanctions against Russia would directly impact some of America’s largest companies — namely Morgan Stanley, Chevron, and Exxon Mobil.

   The European Union focus the attention on other issues of the Ukrainian case. Made clear economic sanctions will be not imposed, two are the reason of concern within the member states: the first one is the 16 billion dollar debt Kiev has with Russia for gas, the second one is the gas reverse flow. In a letter sent to the European leaders the president of the Russian federation, Vladimir Putin proposed the opening of a dialogue to urgently discuss the problem of the Ukrainian debt. “No one will be too happy to be obliged to repay Ukrainian debt”, said officials in Brussels. The problem is Europe is obliged to do it if necessary: on Ukraine the credibility of the European Union is at stake. At the same time it would be a problem for many governments of the member States – in particular the British one – to make the Ukrainian rescue acceptable at home. Then there's the issue of energy supplies: Europe wants to made Ukraine less dependent from Moscow reversing the gas flows via Slovakia. Gazprom CEO Alex Miller said it is not legally possible. "If this is some virtual reverse flow, there can be questions about its legality. It’s unclear what grounds Ukraine has to use Gazprom’s gas in the pipeline on its territory”, he said. “This may raise legal questions”. Gazprom is ready to put Europe on trial, but in Europe they are not worried about. “Once I buy gas from you, gas doesn't belong to you any more and I can do whatever I want”, said officials. 
   Finally, the European Union has to find a juridical solution on Crimea. To don't recognize Russian annexation means that visas for people with Russian passport have to be issued by Ukrainian authorities. There is a practical problem for the free movement of people, and Europe has to find a solution for that. The hope is the twenty eight are not so split as they already are on sanctions.

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