Angela Merkel Wants Tougher Sanctions Against Russia Due to Ukraine Crisis

German Chancellor Angela Merkel said she is ready for tough sanctions against Russia, which would include gas and energy sectors. This is a major jump for her since Germany receives 36% of its natural gas from Russia’s state company Gazprom.

Sanctions against energy, finance, and defense are considered level three since these sectors can potentially damage Russia's economy. Levels one and two hit lower level officials and sectors not prominent in Russia's economy. She praised Russian President Vladimir Putin when he asked parliament to “revoke his ability to deploy troops abroad.” Merkel said he must do more to bring peace to Ukraine. But, at the same time, it is doubtful any sanctions will pass at the EU summit on Friday because of opposition by a few countries. From Financial Times:

Unless the conflict in Ukraine sharply deteriorates, the EU is unlikely to impose new sanctions on Russia at Friday’s summit, diplomats say, citing opposition from Austria, Italy, Finland, Spain, Greece, Cyprus, Bulgaria, Hungary and Slovakia. It is more likely that the leaders will seek to issue a statement of intent about imposing tougher measures unless Russia stops activities such as sending troops across the border and allowing separatist rebels to acquire heavy munitions such as tanks and anti-aircraft weaponry.

A few of these countries believe the EU should concentrate on support for Ukrainian President Petro Poroshenko. He will be in Brussels on Friday to sign the trade and association agreement with the EU. This is the document ousted President Viktor Yanukovych decided to shelve in favor of closer ties to Russia, which led to the three-month protests in Kiev and his downfall.

The United States have already passed sanctions against Putin’s inner circle. The most prominent man on the list is Igor Sechin, CEO and President of Rosneft. Rosneft is Russia’s largest petroleum company and holds contracts with ExxonMobil and British Petroleum. However, the US Treasury Department said ExxonMobil can continue business with Rosneft despite the sanctions on Sechin. From Financial Times:

The new round of US-backed sanctions would require American energy companies to apply for licences for exporting technology to Russia, according to industry executives.

Washington would not grant licences for any technology export with more than 10 per cent US content, the executives added, saying that the rules would apply only to new projects.

This means the Arctic deal between Rosneft and ExxonMobil can continue, but future business might be in jeopardy. The White House is facing pressure from the American companies not to pursue more sanctions because of future projects and it may harm employees in foreign countries.


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