EU leaders freeze Russia visa-free talks, threaten trade sanctions

BRUSSELS - EU leaders have frozen talks on visa-free travel with Russia and threatened asset freezes and economic sanctions if there is a stalemate or if the situation in Ukraine gets worse.

The immediate cost of Russia’s invasion of Ukraine’s Crimea region is what UK Prime Minister David Cameron described as “the one thing the Russians want more than anything with the EU” - no quick prospect of letting Russian people travel to Europe without visas.

EU leaders also suspended talks on a new bilateral treaty with Russia, but these had all-but petered out in recent years anyway.

They added that unless Russia agrees to start negotiations with Ukraine’s new leaders “in the next few days” and unless it agrees “within a limited timeframe” to pull back its troops, the EU will also impose visa bans and asset freezes on Kremlin officials and cancel the next EU-Russia summit.

They tasked the EU institutions to start drafting lists of names right away, so that, in the words of EU Council chair Herman Van Rompuy, “this step can be taken much earlier, and I hope it’s not needed, but much earlier than people think.”

They also said if Russia “further … destabilise[s] the situation in Ukraine” there will be “far reaching consequences … which will include a broad range of economic areas.”

The final red line refers to Russian aggression in Russophone regions of east Ukraine.

Britain’s Cameron indicated the trade sanctions could cover Russian access to EU financial centres, such as the City of London, the energy market, and defence contracts.

For her part, German Chancellor Angela Merkel, whose country buys vast amounts of Russian gas and sells tens of billions of euros worth of German products in Russia, also underlined she is ready to take "far reaching economic measures.”

French leader Francois Hollande, whose country is due to shortly deliver two state-of-the-art warships to Russia, said “we respect all contracts that we have signed,” but added “we have to look at all domains … we have to forcefully evoke even this hypothesis [that the ships will not be sent].”

On the Ukrainian side, EU leaders agreed to sign the “political” chapters of a new EU-Ukraine treaty before Ukrainian elections in May and to unilaterally lower tariffs on Ukrainian imports.

They also backed a European Commission proposal to pay Ukraine €11 billion in loans and grants over the next seven years in return for an ethnically “inclusive” government and austerity measures.

With the Ukraine crisis originating in its former regime’s refusal to sign the EU accession treaty last year due, in part, to Russian pressure, the commission chief, Jose Manuel Barroso, noted the early signature “will seal the association between Ukraine and the EU, as was the wish of the Ukrainian people.”

The EU agreement was not plain sailing.

Polish Prime Minister Donald Tusk told press when the summit began “it looked like it would not be so simple” to get agreement on his proposal on the early EU treaty signature.

France's Hollande underlined that the association treaty has nothing to do with EU enlargement. “For those of you [in the press] who are not specialists, ‘association’ does not mean ‘integration’ and it does not mean ‘accession’,” he said.

He added that any trade sanctions on Russia will require a “new decision” by the EU, creating the opportunity for national vetoes to stop them going ahead.

With the US earlier in the day already deciding to go ahead with a visa ban and asset freeze on Russian officials, the EU side rejected suggestions the EU has taken a weaker line.

Van Rompuy noted the US executive order was “very general” and will be fleshed out later, while the EU institutions are already drafting legal instruments for similar measures if need be.

Barroso said the US has nothing comparable to the EU-Ukrainian association - “this is something that we can offer that some of our partners cannot” - while Merkel added that America’s decision represents a “co-ordinated approach between the US and Europe.”

For its part, Russia and pro-Russian groups in Crimea and in Russophone eastern Ukraine also took action the same day.

The devolved Crimean parliament passed a decree saying the territory should join Russia and called a referendum on the question in 10 days’ time - a move the EU and the US dubbed “illegal.”

Pro-Russian forces scuttled a Ukrainian ship to block Ukrainian vessels in Lake Donuzlav and stopped international monitors from the Vienna-based multilateral club, the OSCE, from entering Crimea.

Meanwhile, Russian nationals continued to pour in on busses to eastern Ukrainian cities, such as Donetsk and Kharkiv, to join pro-Russia protests, which have seen Russian flags hoisted on municipal buildings in recent days.

But sanctions talk aside, Western powers also created new facts on the ground.

The US announced it is sending an extra six F-15 fighter jets to patrol Nato airspace in the Baltic region and 12 F-16 jets for a new training exercise in Poland.

In a move likely to strike a raw nerve with Russia, Nato chief Anders Fogh Rasmussen met with Ukrainian PM Arseniy Yatsenyuk in Brussels also on Thursday and also promised to boost Ukraine's military capabilities.

"We will strengthen our efforts to build the capacity of the Ukrainian military, including with more joint training and exercises. And we will do more to include Ukraine in our cutting-edge multinational projects to develop capabilities,” the Danish politician said.