EU ministers fear retaliation as new Russia sanctions take effect

European Union
European Union

The European Union imposed sanctions Friday on large Russian energy and defence companies – including a subsidiary of Gazprom and the manufacturer of Kalashnikov assault rifles – despite fears of Russian retaliation among some member states.

European Union
European Union

The latest measures, which also target senior pro-Russian separatist figures in eastern Ukraine, came into effect after being published in the EU’s Official Journal.

The bloc has pledged to review the sanctions if a ceasefire in eastern Ukraine holds, in a compromise reached amid fears in some European capitals that they could hamper the fragile truce agreed last week, as well as worries over Russia’s response to the measures.

“Counter-sanctions from [the] Russian side, they do affect [the] Lithuanian economy,” said that country’s finance minister, Rimantas Sadzius, ahead of informal talks with his EU counterparts in Milan. He said the country had lowered its growth prospects, partly for that reason.

“It is certainly a difficult situation, because of course every further sanction could lead to counter-reactions that we do not yet know,” said Austrian finance minister Hans Joerg Schelling.

The new sanctions on Russia hinder access to EU financial markets for energy companies Rosneft, Transneft and Gazprom Neft, as well as defence manufacturers Oboronprom, Uralvagonzavod and United Aircraft Corporation.

In addition, they prohibit the sale of dual-use goods – which can be put to civilian or military use – to nine defence firms, including Kalashnikov and Almaz-Antey, manufacturer of the Buk missile system that is thought to have been used in the downing of the MH17 airliner over eastern Ukraine.

Twenty-four new individuals have been hit with EU asset freezes and travel bans, bringing the total to 119.

They include eastern Ukrainian separatist leaders Alexander Zakharchenko and Vladimir Kononov, the so-called prime minister and defence minister of the Donetsk People’s Republic; and Miroslav Rudenko, commander of the Donbass People’s Militia.

Sergei Chemezov, the head of arms and technology holding Rostec, and Russian ultra-nationalist lawmaker Vladimir Zhirinovsky are also on the list, alongside other influential parliamentarians.

Initial responses from Russia were dismissive of the sanctions.

“I did not like Europe before, now I won’t like it at all,” Zakharchenko told Russia’s Interfax news agency.

“The EU reduces the potential for dialogue and strengthens confrontation,” first deputy State Duma speaker Ivan Melnikov, who has also been targeted, told Interfax.

Deputy speaker Vladimir Vasilyev said Moscow’s reaction would come soon. “We will act as a sovereign state and in our interests,” he said according to Interfax.

A spokesman for Oboronprom said the sanctions won’t affect business. “Oboronprom has not and will not draw loans and credit from European banks,” he was quoted as saying.

In Brussels meanwhile, EU Trade Commissioner Karel De Gucht is due later Monday to hold talks with Russian Economic Development Minister Alexey Ulyukaev and Ukrainian Foreign Minister Pavlo Klimkin on the implementation of an EU free trade agreement with Kiev.

Russia has reportedly presented a long list of proposed changes that would weaken the agreement, according to German daily Sueddeutsche Zeitung. Moscow has expressed fears that the free trade deal could have a negative impact on its economy.



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