Juncker promises US tough line on Russia sanctions

Jean-Claude Juncker i, one of the EU’s Russia-friendly leaders, has reiterated his commitment to upholding economic sanctions.

The European Commission head made the pledge in a phone call with US vice president Joe Biden on Tuesday (3 November), according to a White House readout.

“On Ukraine, the two leaders agreed that sanctions on Russia should be tied to full implementation of the Minsk agreements, and that Ukraine needed to move forward expeditiously with further economic and anti-corruption reforms”, the statement said.

“On energy security, the two leaders discussed the need for energy diversification and full application of EU competition standards,” it added, alluding to EU-Russia gas pipeline projects.

Juncker’s pledge comes amid a lull in fighting in east Ukraine.

Ukrainian and Russian-controlled forces have pulled back heavy weapons from the contact line, as stipulated in the so-called Minsk accord, a French and German-brokered ceasefire deal.

The next test of the truce will come when Kiev passes a special law on holding elections in the Russia-occupied parts of the Donetsk and Luhansk regions.

The EU sanctions are to expire at the end of January if Minsk is fulfilled, with EU capitals to discuss the state of play next month.

Kiev has warned that two other Minsk provisions - on withdrawal of “all foreign armed formations” from Ukraine and on restoring “full control over the state border by [the] Ukrainian government” - aren’t being met.

“Russian regular troops and mercenaries, as well as heavy weapons and military equipment, keep flooding the region”, it said in a letter to the EU Council last month.

"The threat of further military escalation by Russia is still very high."

But some EU leaders, such as French president Francois Hollande i, and Juncker, want to return to business as usual.

Hollande said in September that if Donestk and Luhansk elections go well, he'll “personally advocate for lifting the sanctions”.

He invited, on Tuesday, Russian leader Vladimir Putin i to a climate summit in Paris in December, telling the Europe 1 radio station: “We may have disagreements on several matters, but we should be united on the issue of climate."

Juncker said in Passau, Germany, in October: “We must make efforts towards a practical relationship with Russia. It is not sexy but that must be the case.”

“Russia must be treated decently … We can't let our relationship with Russia be dictated by Washington,” he added.

Meanwhile, EU solidarity is faltering on the energy front.

Poland and Slovakia have accused Germany of “betrayal” over plans to double the capacity of its Nordstream gas pipeline to Russia.

Greece and Hungary are keen to take part in Turkstream, a Russian plan to bypass Ukraine gas transit systems via a new pipeline to Turkey.

Recession

For its part, Bruegel, a Brussels-based think tank, noted on Tuesday that EU and US sanctions have aggravated Russia’s recession.

It said Russia's economy will contract by 3.8 percent this year, mostly due to lack of reform and low oil prices, but also because Western measures “substantially reduced the possibility of external financing for large Russian companies and banks.”

The situation has done little to reduce Putin's support, however.

Levada, an independent pollster, noted, last week, that 72 percent of Russians think he'd be "wrong" to “acquiesce to the demands of the West and limit support to the Donetsk and Luhansk people’s republics.”

Eighty three percent responded “negatively” to “the idea of returning Crimea to Ukraine.”

Corruption

The conflict saw Ukraine’s economy shrinking by 7 percent last year and 9 percent this year.

It will take another hit if Russia imposes trade sanctions in January, when an EU-Ukraine trade pact enters into life.

The conflict aside, backsliding on anti-corruption reforms is also taking its toll.

Transparency International, a leading NGO, as well as EU diplomats, blame Ukraine’s prosecutor general, Viktor Shokin, for holding back change.

Some 200 people called for his resignation in a rally last weekend, in a sign of political volatility in Kiev. An unknown gunman or gunmen fired three shots at the windows of his office on Tuesday.