Rifts show as sanctions bite EU

The foreign ministers of the European Union’s 28 member states will consider the situation around the EU’s anti-Russian sanctions for Moscow’s position on Ukrainian events at a meeting on November 17, the EU’s high representative for foreign affairs and security policy, Federica Mogherini, said Tuesday.

Austrian Chancellor Werner Faymann spoke on Tuesday against the imposition of new anti-Russian sanctions over Moscow’s position on the situation in Ukraine.

Faymann made the statement to journalists after a government meeting.

He said Vienna believes in the negotiating process to settle the situation in Ukraine, the Austria Press Agency (APA) reported.

The sanctions have had a significant impact on the Austrian economy.

Until now, Russia was the tenth most important business partner for Austria. In 2013, Austrian companies exported an aggregate of 3.5 billion Euros of products to Russia and imports reached 3.2 billion Euros. Russia had also become an increasingly important destination for Austrian direct investments.

The sanctions have particularly affected Austrian banks, who remain concerned about the possible commercial risks should Russia decide impose sanctions against the financial sectors of EU Member States, either in the form of extraordinary taxations, restrictions to capital movement or even expropriation.

It is likely that the EU sanctions and any Russian countermeasures will cost the Austrian economy in the region of 750 million Euros.

With this in mind, the Austrian government recently adopted a crisis package, including support for small and medium sized enterprises, SME’s.

The European Union’s sanctions regime against Russia is not expected to change in the near future, the new European Commission president said on Wednesday, however.

Jean-Claude Juncker said toughening or easing the sanctions is not an issue for today.

Juncker also said he would make his first visit to Kiev.

The US has urged the EU to impose several rounds of economic sanctions against Russia over the country’s alleged role in the Ukrainian crisis, while Moscow has repeatedly stated that Russia is not a party to the Ukrainian internal conflict.

German Chancellor Angela Merkel believes that latest events in Ukraine, primarily elections in self-proclaimed Donetsk and Luhansk People’s Republics, do not allow for consodering possible cancellation of sanctions imposed on Russia.

“There are no reasons to cancel them now,” she said in Berlin on Tuesday. Merkel named elections in the self-proclaimed republics “illegal,” noting that Moscow should influence militias more actively to prevent the conflict from escalation.

“Russia does not take effort at an extent we would like them to do so,” she said, noting importance of observing the Minsk agreements by all conflicting parties.