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Ukraine

EU moves toward tougher sanctions on Russia

A day after the unrecognized referendum in eastern Ukraine, EU foreign ministers, meeting in Brussels, are poised to impose new sanctions on Russia. They are also asking themselves if there is anyone left to mediate.

"We can maintain the pressure on Russia in order to reach a political solution," is how a high-ranking European Union diplomat in Brussels described this Monday's summit (12.05.2014). The foreign ministers of the 28 EU states will receive several lists and options for the expansion of sanctions against Russia due to the Ukraine crisis. These proposals were prepared over the past week by EU ambassadors and the EU Commission.

The group of individuals against whom sanctions will be imposed is set to be expanded considerably. The criteria - very strictly defined up until now - will be expanded, said an EU diplomat who wanted to remain anonymous. Account freezes and travel bans will be imposed on individuals who "obstruct international organizations in the completion of their tasks" or "support the Russian government in the completion of its tasks." The EU has already put together a list of more names - though this is strictly secret. And the foreign ministers have to agree unanimously before the sanctions can be implemented.

No sanctions against the Russian economy

Steinmeier and Ashton

Steinmeier (right) wants to help Ukraine rather than punish Russia

"It all depends on developments in Ukraine and the political estimations of the ministers, whether sanctions make sense or not," said one official. The EU ministers want to make clear that they will not recognize the result of the referendum in eastern Ukraine, which they regard as illegal.

According to the new criteria for sanctions, it would be possible to hit those who were responsible for the recent kidnapping of observers from the Organization for Security and Cooperation in Europe (OSCE). The EU is also targeting Russian and Ukrainian oligarchs who support Vladimir Putin's government. And it could also be possible to impose new sanctions for the first time on Russian and Ukrainian companies that are connected to people who fall under the sanction criteria.

Although, EU diplomats are careful to point out, these would not be sanctions that limit the economic performance of the companies in question - the point would be to block the company's capital assets in the EU. The US has already hit Russian firms and a bank with similar sanctions - and has been urging the EU to follow suit.

As before, the ministers are only talking about so-called "Level 2" sanctions. "Level 3" sanctions - that is, economic sanctions that target entire sectors - will not be on Monday's agenda, the diplomats said. Even though some nations - led by Britain and Poland - are demanding stronger measures, a decision is still a long way off, and it depends on developments in Ukraine and Putin's actions.

German Chancellor Angela Merkel and French President Francois Hollande determined at their meeting on Saturday that economic sanctions should be imposed if Russia blocks or undermines Ukraine's presidential election on May 25.

Aid, not punishment

Angela Merkel Francois Hollande Rügen 2014 Regenschirm

Merkel and Hollande believe Ukraine's presidential election is crucial

The EU Commission has put together a country-specific analysis on the potential economic effects of wide-ranging economic sanctions and distributed them to each of the 28 EU ambassadors. This analysis was commissioned by the various governments in March in order to better assess what sanctions would make sense - some of these classified documents were leaked to German magazine, Stern.

According to this data, far-reaching sanctions and the likely reaction from Russia would, in the worst case scenario, trigger a 0.9 percent downturn in Germany this year. But the EU Commission also wrote that it was hard to predict how possible gas and oil price increases would affect consumers.

German Foreign Minister Frank-Walter Steinmeier is therefore likely to advise his counterparts against concentrating too hard on sanctions. Instead, he will call for a "strong signal of support for Ukraine," say diplomats. The aim is to avoid a trade war, but go for "roundtable" discussions at all levels in order to forge a dialogue between all parties: Ukraine, the separatists, Russia, and the EU. And the presidential election in Ukraine must be allowed to go ahead.

OSCE to send election observers

The EU wants the OSCE to take on observing the elections, an operation that is currently being prepared. But it remains unclear how these observers will be protected from abduction. The EU nations want to commit 105 observers to the mission, while the European Parliament is to send seven of its members to Ukraine as election observers.

Russland Schweiz Präsident und Außenminster Didier Burkhalter bei Wladimir Putin in Moskau

Burkhalter (left) met Putin last week

This, too, is expected to be among the issues up for discussion on Monday, when the EU foreign ministers meet the OSCE chairman - and Swiss president - Didier Burkhalter, who will also report on his meeting with Putin last week. Burkhalter had suggested that the OSCE may be able to propose a peace plan that he had discussed with Putin.

Over the past weekend, officials have worked on their proposals for expanding sanctions. These texts have to be molded into an EU edict to be published in an official paper. The legal situation has to be water-tight, so that it passes muster with the European Court of Justice - because those affected could appeal to the court in response.

This complex process often raises eyebrows among the EU's US partners. In Washington, a simple presidential order is enough to impose sanctions - and there is no legal recourse.

Ukrainian Prime Minister Arseniy Yatsenyuk is due to travel to Brussels on Tuesday to talk to the EU Commission about planned financial aid. 1.6 billion euros ($2.2 billion) have been made immediately available - a further 14 billion euros are expected to follow in the coming years.

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