Courtesy of Mish.
German chancellor Angela Merkel wants to stand tough against Russia, but Austria, France, Italy, Hungary, Greece, and Portugal have had enough of sanctions that have backfired.
Talking tough may be Merkel’s official stance but circumstances have changed. She is no longer calling all the shots.
Step-by-Step Rapprochement
Please consider Step-by-Step Rapprochement: Germany Considers Easing of Russia Sanctions.
As expected, G-7 leaders reiterated their hardline approach to Moscow in the Japan summit’s closing statement. Chancellor Angela Merkel complained last Thursday that there still isn’t a stable cease-fire in Ukraine and the law pertaining to local elections in eastern Ukraine, as called for by the Minsk Protocol, still hasn’t been passed. That, she said, is why “it is not to be expected” that the West will change its approach to Russia.
What Merkel didn’t say, though, is that behind the scenes, her government has long since developed concrete plans for a step-by-step easing of the sanctions against Russia and that the process could begin as early as this year.
Two weeks ago, German Foreign Minister Frank-Walter Steinmeier warned that, with Brussels set to vote on an extension of the penalties soon, resistance to doing so is growing within Europe. It is becoming more difficult, he said, to arrive at a uniform EU position on the issue, which is necessary since the sanctions extension must be passed unanimously. The German line is that Putin must not be given the impression that he can divide the EU.
In Brussels, the European Council, the powerful body representing the leaders of the 28 EU member states, and the European Commission, the EU executive, are staying firm officially: Only after the Minsk Protocol has been 100 percent fulfilled can sanctions be lifted. That is the approach passed unanimously last year and extended for six months last December.
But more and more EU member states have begun questioning the strict penalty regime, particularly given that it hasn’t always been the Russians who have blocked the Minsk process. Despite Tusk’s apparent optimism, indications are mounting that getting all 28 EU members to approve the extension of the sanctions at the end of June might not be quite so simple.
Members of some governments, though, have very clearly indicated that they are not interested in extending the sanctions in their current stringent form. Austrian Vice Chancellor Reinhold Mitterlehner is among the skeptics as is French Economics Minister Emmanuel Macron. So too are officials from Italy, Spain, Greece and Portugal.
Hungary has been particularly outspoken. Hungarian Foreign Minister Peter Szijjarto said last Wednesday following a meeting with his Russian counterpart Sergey Lavrov in Budapest that his country would not accept an automatic extension of the sanctions regime. Hungarian exports to Russia have collapsed as a result of the penalties, a problem experienced by the Czech Republic and other Eastern European countries as well.
Italian Prime Minister Matteo Renzi is another EU leader who has long been critical of the EU’s approach to Russia. Renzi is bothered by the fact that his country has suffered economic losses as a result of the sanctions while Germany has continued working together with Russia on the Nordstream Pipeline across the Baltic Sea. Italy, the EU’s third largest economy, is one of Russia’s largest trading partners in Europe.
The mood is changing in France as well. At the end of April, the French parliament adopted a non-binding resolution calling for the end of the penalties imposed on Moscow. One of the reasons cited was that French farmers are suffering the consequences. Sanctions critics also argue that Moscow is a necessary partner when it comes to pacifying Syria and that constantly keeping Russia at arm’s length is counterproductive.
The Netherlands, which currently holds the rotating EU presidency, is in a difficult situation. In an April referendum, the Dutch voted against the planned European Union association agreement with Ukraine. The issue wasn’t directly related to the issue of Russian sanctions, but some have interpreted it as a pro-Russian vote. Since then, the Dutch government has been acting extremely carefully.
It is certain, however, that Berlin’s plans will not be particularly well received on the other side of the Atlantic. “The sanctions against Russia should only be lifted once the Protocol is comprehensively implemented,” says US Ambassador to Germany John B. Emerson. “A modification would not send a strong message. It could become a dangerous precedent.”
Sanctions Backfired
The idiotic sanctions hurt the EU as much if not more than they hurt Russia. Putin’s popularity rose following the sanctions.
Tariffs and sanctions are heads and tails on on a coin that is a lose-lose proposition the moment it is flipped. In contrast, free trade is always good.
Merkel may or may not be ready to kiss and make up with Putin, but events are going to force that outcome.
