April 28, 2017 / 10:16 AM / in 7 months

EU on course to renew Russia sanctions barring Le Pen election win

VALLETTA (Reuters) - The European Union will seek to renew economic sanctions against Russia when they expire at the end of July, encouraged by U.S. President Donald Trump’s unexpectedly frosty relations with Moscow, EU diplomats and officials said.

FILE PHOTO: European Union (EU) flags fly in front of the European Central Bank (ECB) headquarters in Frankfurt, Germany, December 3, 2015. REUTERS/Ralph Orlowski/File Photo

The bloc imposed sanctions on Russia after Moscow annexed Crimea from Ukraine in 2014 and then backed separatist rebels in the east, helping drag relations between President Vladimir Putin and the West to a post-Cold War low.

While EU leaders have so far backed the sanctions, not all have done so with the same zeal. After Trump’s campaign promises of warmer ties with Moscow the EU’s resolve to remain united on the issue was seen being tested.

But with the U.S. leader’s perceived shift in stance toward Russia, those pressures have eased, for now. A more imminent risk to the EU’s united front, officials say, would be a surprise win for the far-right Marine Le Pen in France’s presidential election on May 7.

“It seems a roll-over will be much less problematic than anyone expected,” said one EU diplomat from a member state keen to maintain the sanctions.

Among the strongest supporters of renewing the sanctions are Sweden, the Baltic states and Poland, whose voice has been weakened by Britain’s decision to leave the EU.

Those less convinced include Italy, Greece, Cyprus, Hungary, Spain and Bulgaria, who argue that three years of sanctions have failed to sway Moscow, and would like to restore business ties.

“We don’t like the sanctions,” said a Brussels-based diplomat from one of these countries.

“It’s a huge business loss for us. But we will be with the majority,” the diplomat added, acknowledging that a renewal of the sanctions regime looked likely.

The EU last month extended until September a blacklist of Russian individuals and entities for their role in the turmoil in Ukraine. And it is all but certain to extend separate restrictions on doing business in Crimea before the current ban expires in late June.

The renewal of sanctions requires unanimous support. An EU official dealing with the issue said this looked on track.

“First, we extend the Crimea ones. The economic ones should come after the June EU leaders’ summit. There are two things that can affect this: the French elections and Trump,” the official said.

Le Pen opposes Russia sanctions and wants them lifted. If she wins the presidency, France could block an extension.

EU SEES WASHINGTON “TURNING OUR WAY”

The simmering conflict in eastern Ukraine has killed more than 10,000 people.

Germany and France, the EU’s two leading powers which brokered peace agreements between Kiev and the Russia-backed rebels in 2014 and 2015, play a leading role in sanction decision-making through their debriefings to other EU states.

While the United States has no direct involvement, it is a strong influencer. Under Trump’s predecessor, Barack Obama, the G7 group of industrialized economies used to seek a joint stance on Russia which the European members took back to other EU states.

This may happen again when G7 leaders meet on May 26-27, a month ahead of the EU leaders’ meeting in Brussels. It will be the first such summit with Trump and will also include Germany, France, Italy and Britain.

A third EU diplomat said that after concerns at the start of the Trump presidency, there was now a growing sense the White House would not be at odds with the EU stance.

“People didn’t ask before for fear of getting the wrong answer,” said a senior EU diplomat. “And it may prove the right strategy, the Americans seem to be turning around our way.”

A fourth EU diplomat said the United States appeared largely absent from the Russia sanctions discussion. EU officials, though, do not rule out a thawing of Washington-Moscow relations at some point.

“A roll-over of sanctions is not in doubt now, but who knows further down the line, without U.S. support,” the diplomat said.

Additional reporting by Robin Emmott; Writing by Gabriela Baczynska; Editing by Richard Lough

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