Russia’s recognition of the separatist areas of Donetsk and Luhansk puts the European Union, the United States and the United Kingdom on the brink. What sanctions should they take to hit Russia and deter further aggression? And can they maintain their mutual unity?
Initially, the EU and the US announced limited sanctions. The EU wants to take punitive measures against those ‘involved in this illegal act’. US President Biden banned all economic activity by Americans in Donetsk and Luhansk. It is a cautious response, with limited sanctions against individuals and institutions.
The EU continued to implement such sanctions, such as the freezing of Western bank deposits and entry bans, after Russia’s annexation of Crimea in 2014. They did not lead to political change in Russia. Severe measures against the Russian economy as a whole, for example exclusion from financial markets or high technology, are being held back.
Boris Johnson speaks of ‘first jump-off’
On Tuesday afternoon, European foreign ministers will discuss sanctions in an extra meeting. The toughest sanctions, however, must be approved by government leaders. A summit of the leaders is not yet scheduled. British Prime Minister Boris Johnson is set to announce sanctions this afternoon against “the economic interests that have supported Russia’s war machine.” He also spoke of a ‘first jump-off’. Severe sanctions, such as a restriction on Russian access to the capital market in London, will be imposed later.
The West does not want to shoot its gunpowder right away. Western leaders still hope that Russian President Vladimir Putin will refrain from further aggression against Ukraine, through diplomatic talks and the threat of ‘heavy sanctions’. The chance of that is small, however. Russian Foreign Minister Sergei Lavrov reacted laconically to the threat of sanctions on Tuesday morning: ‘We are used to it. We know that sanctions are imposed no matter what, with or without reason.’
According to Ursula von der Leyen, the president of the European Commission, a comprehensive sanctions package is ready in the event of a Russian invasion. For example, Russia “will in principle be cut off from the international financial markets,” von der Leyen told German TV on Sunday evening. The West would also impose an embargo on chips and other high-tech technology that Russia “urgently needs to modernize and diversify its economy,” von der Leyen said.
EU member states have different views on sanctions
Although European leaders constantly emphasize their unity, there are differences between EU member states. If Russia annexes all of Ukraine, the full package of sanctions will no doubt be triggered. But what happens if Russian ‘peacekeeping forces’ occupy only the Donbas? Or station only ‘peace troops’ in the areas now occupied by the separatists?
Poland and the Baltic States are the strongest proponents of severe and rapid sanctions. Italian Prime Minister Draghi said last week that in any case sanctions should not affect energy imports, because Italy is heavily dependent on Russian gas. Nevertheless, Foreign Minister Di Maio said on Tuesday that the recognition of Donetsk and Luhansk is “unacceptable” and that Italy wants to continue with sanctions against Russia.
Hungary, whose Prime Minister Viktor Orbán maintains good relations with Putin, has expressed support for sanctions. ‘Hungary has never broken the EU’s unity in this matter. At the same time, we must not give up any last hope for a diplomatic solution,” said Foreign Minister Peter Szijjártó.
Germany suspends Nord Stream 2 approval
Germany is often seen as a weak link in the front against Russia, given its reliance on Russian gas. Chancellor Olaf Scholz said on Monday that Putin’s decision to recognize the separatist areas “must not go unanswered.” On Tuesday, he suspended approval of the controversial Nord Stream 2 gas pipeline.
The 27 member states of the EU have different interests and histories with Russia. Poland and the Baltic countries have been occupied by Russia and want to crush any Russian expansionism as quickly as possible. Italy is safely behind the Alps and is dependent on Russian gas. The Ukraine crisis is therefore a test for the unity of the EU. If, even in this serious crisis, the Member States are unable to act in concert and decisively, any pursuit of a common European security policy will lose its credibility.