European Council President Tusk addresses a joint news conference following a European Union leaders summit in Brussels...European Council President Donald Tusk addresses a joint news conference following a European Union leaders summit in Brussels, March 19, 2015. REUTERS/Eric Vidal
Donald Tusk

EU leaders took the first step towards extending their sweeping economic sanctions against Russia on Thursday night, agreeing that the measures would be maintained unless last month’s ceasefire agreement reached in Minsk was implemented in full by Moscow.

The communiqué, agreed on the first day of a two-day summit in Brussels, fell short of hopes from some hardline countries — and the summit’s host, European Council president Donald Tusk — for an immediate renewal of the sanctions, which are due to expire in July.

But by tying the measures to the Minsk agreement, which among other things requires Russia to secure its border with Ukraine and hand over its control to Ukrainian authorities, officials believe extension is now assured since the Kremlin is not expected to live up to the agreement’s terms.

“Our common intention is also very, very clear,” said Mr Tusk at a post-summit press conference. “We have to maintain our sanctions until the Minsk agreement is fully implemented.”

The communiqué notes the Minsk agreement is not expected to be completed until December, sending a signal that the extension, once it is agreed, would be for six months rather than the full year of the original sanctions regime.

The EU sanctions agreed in July include an arms embargo against Russia as well as a ban on selling the Kremlin sophisticated oil-drilling equipment, a measure aimed at degrading the ability of Russia’s energy sector to expand. Most importantly, it bars Russia’s largest banks from raising money on European financial markets.

EU leaders also debated whether Brussels should be granted powers to assess gas contracts between European companies and Russia’s gas giant Gazprom, discussions Mr Tusk said had been the most contentious issue of the summit thus far.

According to diplomats, Mr Tusk and Poland have become isolated in pushing for the European Commission to be given a mandate to reject companies’ gas contracts if Gazprom was seen to overcharge or break EU law. The proposed scheme is meant to prevent the Russian export monopoly, which provides 30 per cent of Europe’s gas, from abusing its market dominance.

“Most bilateral contracts with our dominant supplier, Russia, are concluded on a long-term basis, sometimes more than 20 years. That can be unhealthy,” Mr Tusk said.

The final conclusions on Thursday were left vague, and said only that the EU should ensure the “transparency of such agreements and compatibility with EU energy security provisions”.

In a sign of the sensitivities associated with the commission wading into corporate contracts, the leaders dropped a reference to the need for any agreements to be made explicitly in “communication” with the commission.

However, Mr Tusk predicted that the commission would flesh out the plans with legal and institutional proposals in the coming months. “It is not an empty conclusion, you can be sure,” he said. “I feel after today’s decision, when it comes to energy security, all member states are ready to co-ordinate and co-operate with the institutions and the commission to ensure gas contracts are secure for Europe.”

Some of Poland’s critics lie in its immediate neighbourhood. Hungary has voiced broad concerns that Europe’s new energy policies — broadly dubbed the energy union — are impinging on national sovereignty. The Czech Republic has expressed doubts about whether the commission should take on such an important competence in the commercial sphere.

Get alerts on Russian politics when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)

Follow the topics in this article