Decision taken to extend sanctions made prior to summit in order to prevent discussion
Reports are circulating that as expected the EU has decided that sanctions against Russia will be extended to January.
The decision was not taken at the forthcoming EU summit. Like the decision to toughen the sanctions taken last September, it is supposed to have been agreed by the permanent representatives or ambassadors of the EU member states in Brussels.
In theory the decision must be ratified at the EU summit. No one seriously doubts it will be (see "Why EU Sanctions On Russia Will Be Extended In June", Russia Insider, 5th June 2015)
As we discussed previously this decision essentially ratifies the decision that was made at the G7 summit -- which is where the decision to extend the sanctions was actually made (see "G7 and Sanctions: Doubling Down on a Failed Policy", Russia Insider, 9th June 2015).
As we have also discussed previously, the fact the decision has been made in this way --- at the level of permanent representatives rather than at the summit --- is not a sign of consensus. It is on the contrary proof of disagreement, with the states that support sanctions anxious to avoid a debate which might allow disagreements to rise to the surface.
The Russians have never doubted the sanctions would be extended. They have repeatedly said their economic calculations for the next two years are based on the assumption the sanctions will continue (see "Putin: Sanctions Will Continue", Russia Insider, 17th April 2015).
In his recent meetings with the prime ministers of Greece, Slovakia and Italy Putin did not discuss the sanctions because despite their publicly expressed doubts about the sanctions he knows the decision whether or not to extend the sanctions does not lie with them.
The claim some people make that Russia is drawing back from full-blooded support for the Donetsk and Lugansk People’s Republics because it hopes to get the sanctions lifted contradicts what the Russians have been saying about the sanctions and is certainly wrong.
As it happens there is a strong body of opinion within the Russian political and economic leadership that wants the sanctions to continue because it sees them as actually good for Russia (see "Kremlin Economy Boss: Please Don't Cancel Sanctions - They're Helping Russia", Russia Insider, 30th October 2015).
The sanctions will only be formally lifted if one EU member state finally finds the courage to state publicly that it opposes them and that it will definitely veto them when they come up for renewal -- something Dr. Gilbert Doctorow thinks is possible, but of which there is for the moment no sign (see "EU Support for US Russia Policy Far Less Than People Realize (Video)", Russia Insider, 11th June 2015).
The other possibility is that there is a rebellion against the sanctions in Germany --- the country that ultimately matters --- presumably led by the business community there.
Whilst that is possible it is important not to overstate the opposition to the sanctions in Germany at the present time.
Some German companies have lost business in Russia because of the sanctions but the damage has not been anywhere near big enough to persuade the German business community to take on Merkel over the issue in a public row at a time when opinion polls show most Germans support the sanctions.
If the situation in Ukraine changes to the point where there is a full-scale collapse, making it obvious that Merkel’s sanctions policy has failed, then Merkel could find herself in serious trouble, with many questioning what the point of it all was. However we are not there yet.
Most likely is that the sanctions will simply erode away, as they already appear to be (see "Financial Times Says Sanctions Are Already Eroding", Russia Insider, 15th June 2015).
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