German Chancellor Angela Merkel said Thursday that EU sanctions against Russia could be lifted if only Moscow would respect the Minsk Agreement, the ceasefire deal signed last year among Russia, Ukraine, the Organization for Security and Cooperation in Europe and the separatist entities in eastern Ukraine.
While Russia has refused to acknowledge its involvement in the war in eastern Ukraine, economic sanctions by the U.S. and European Union that have helped push the country to the brink of recession now look as if they may prompt the Kremlin to take action on the conflict in the Donetsk and Luhansk regions.
“There are some signals … that there is a kind of willingness to work more closely with Europe on eastern partnership issues and finding a way out of the current situation in eastern Ukraine,” said Edgars Rinkevics, the foreign minister of Latvia, whose country, a former Soviet subject and nervous neighbor of Russia, has just taken over presidency of the EU.
Merkel, speaking at a news conference in Berlin Wednesday, voiced “little hope” that sanctions imposed for the Russian annexation of Crimea will ever be lifted, but held out hope for those linked to eastern Ukraine.
French President François Hollande wants the sanctions lifted immediately. “I’m not for the policy of attaining goals by making things worse,” he said in an interview on France Inter radio Monday. “I think that sanctions must stop now.”
Russia’s economic worries are not entirely the product of the sanctions. The crash in the price of oil from $110 a barrel one year ago to $50 in recent weeks has been the main culprit. Russia’s current budget is based on selling oil at $100 a barrel. But for every $1 cut from the price of a barrel, Russia loses $2.3 billion. Current sanctions deny Russia the ability to get loans from the international community to stem those losses.
Fyodor Lukyanov, editor of the journal Russia in Global Affairs, says the economic pressure could well damage President Vladimir Putin's credibility at home, and he must decide whether he wants to try to salvage the country’s economy or protect the reputation he built as a strong leader willing to defend Russian interests with force. “Putin’s credibility might be seriously damaged by this economic crisis,” Lukyanov told the New York Times. “If in reaction he begins to clearly give up on Ukraine, that will be detrimental to his position, and he cannot afford it.”
Another problem for Putin is that he is, officially, not involved in the Ukraine fighting at all. “An issue with this is that to determine whether, for example, one of the conditions has been met, the withdrawal of illegal armed groups, military equipment and mercenaries from Ukraine, would in some ways mean Russia admitting they were there in the first place,” said Sarah Lain, a research analysts and expert on Russia at the Royal United Services Institute, a London think tank. “The Russian government has put so much effort into denying this, to do so would be very hard.”
Still, in addition to the comments by Merkel and Hollande, U.S. Secretary of State John Kerry has also indicated that Russia was changing its posture in Ukraine, saying it had “made constructive moves” that may lead to resolving the conflict.
“I think the military posture is changing in the sense that Russia is not providing the degree of equipment and support it was previously, mainly because it doesn’t need to,” said Lain. “The ceasefires have not been fully successful, but there has been a reduction in the fighting.”
Leaders from Ukraine, Russia, France and Germany are to meet Jan. 15 in Astana, Kazakhstan, for more negotiations. But Merkel said the talks would go forward only if something meaningful could come out of them. That will be decided in the coming days.