EU foreign policy chief seeks new 'debate' with Russia

BRUSSELS - Federica Mogherini i, the EU’s foreign policy chief, has said the bloc should launch a new “debate” with Russia aimed at ending the “confrontation” over Ukraine.

She told Italy’s La Repubblica daily on Saturday (27 December): “The current situation is very difficult for Russia. It would be in its interest to contribute to ending the conflict. At the same time, we all know that Russia plays an important role not only in Ukraine, but also in Syria, Iran, the Middle East, Libya”.

“We have to open a direct debate with Moscow on our mutual relations and the role that Russia can play in other crises”.

She noted that Ukraine and the US also want to find a way out of the confrontation.

“Even in Kiev the question that everyone is asking is: How can the conflict be brought to an end?”, she said.

“I often speak with [US secretary of state John] Kerry i and there is a total identity of views on the crisis … everyone wants to get out of the logic of confrontation, of wall against wall”.

Mogherini will on 19 January in Brussels chair an EU foreign ministers’ “strategic” debate on Russia, with member states, between March and July, to decide whether to extend Russia sanctions for another year.

EU leaders already held strategic Russia talks earlier this month.

Following the summit, German chancellor Angela Merkel i said the sanctions can only be lifted if Russia gives up conquered territories in Ukraine.

But France and Italy took a softer line, while Merkel’s foreign minister - Frank-Walter Steinmeier from the centre-left SPD party in the grand coalition - later warned that a Russian economic collapse would be dangerous for Europe.

The Russia-friendly camp also includes Austria, the Czech Republic, Hungary, and Slovakia, with Austrian president Heinz Fischer on Sunday echoing Steinmeier in an interview with the Wirtschaftsblatt newspaper.

“The Russian economy has a certain degree of robustness, but the sanctions pose considerable problems … a serious crisis in Russia and an economic collapse would only create more problems. The doors between Europe and Russia must remain open,” he said.

He added that a partition of Ukraine is one way to address Russia’s concerns.

“Serious talk of reforms in the area of decentralisation or federalisation would have to be done, which would create a situation in eastern Ukraine that both sides could live with”.

Russia, Russia-controlled rebels, and Ukraine agreed to a prisoner exchange during a fresh round of peace talks in Minsk last week. But the talks failed to reach a more comprehensive agreement on how to end the conflict.

Meanwhile, the rouble crisis, caused by a prolonged slump in oil prices, continued to gather pace over the holiday season.

Russia has said it will have to triple the size of its bailout for the National Trust Bank to $1.9 billion and to spend a further $5.9 billion to prop up the VTB and Gazrombank lenders.

It also called on Russian firms to start selling their dollars for roubles in the coming months in what analysts described as a form of capital control, while its finance minister Anton Siluanov, said that if the oil price stays low, Russia will enter recession in 2015 and quickly burn up its $399 billion rainy day fund.

“We’ll burn through all the reserves in 2016-2017 … At one third of all budget spending, defence has too large a share. We need to reshuffle and restructure spending for infrastructure, education and so on”, he told reporters in Moscow on Saturday.

The situation is especially acute in Crimea, which Russia annexed in March, and which it can only supply by sea.

Ukraine last Friday cut electricity and train services to the region. While a new round of EU and US sanctions saw credit card company Visa cut services to card holders in the Black Sea peninsula.