Ukraine Conflict Putting Business Before Peace in Ukraine, Europe Takes a Soft Line With Russia

The European Union's failure to agree on tougher economic sanctions against Russia for its support of rebels in eastern Ukraine is eroding any influence western Europe may have in resolving the conflict, writes a Handelsblatt columnist from Brussels.
Coffins of victims of Malaysian Airlines Flight 17 being loaded onto a Dutch transport plane in Kharkiv, Ukraine, on July 23, 2014.

Until now, Europe did well by gently tightening the punitive screws on Russia. Economic sanctions are not something that politicians should treat lightly. All the same, you couldn’t help feeling that Moscow was playing a game of cat and mouse with the West in eastern Ukraine.

For nearly four months, the European Union has backed away from imposing far-reaching economic sanctions against Russia out of fear for economic consequences. E.U. leaders did the same again on Tuesday, reaching no conclusion on harder penalties against Russia.

 

Since military action is out of the question, economic sanctions are the sharpest weapon Europeans have.

In March, E.U. member states and heads of governments had decided on a third step of sanctions in case of further destabilization in Ukraine by Russia. But how credible is it to draw lines in the sand when they are crossed again and again with such impunity?

In the past months, Russia’s President Vladimir Putin has said what the West wanted to hear – he just didn’t do what he said.

</a> Russian President Vladimir Putin said new sanctions could weaken the country's economy.

 

The E.U. foreign ministers, who were scheduled to meet on Tuesday, should open their eyes to the unpleasant realities of this crisis. Countries that have relied on threats and quiet diplomacy, among them Germany, should now speak bluntly with Mr. Putin and act accordingly. At the minimum, they should immediately impose sanctions that state and government heads agreed upon last week. This would impact Russian companies for the first time.

Just recently, France was still delivering military equipment to Russia. And German business leaders paid a visit to Mr. Putin to ensure continued commercial dialogue. Such dealings found little understanding among the E.U. partners from Eastern Europe. Nevertheless, they allowed their insistence on sanctions against Russia to be curbed. But eventually even good will reaches its breaking point.

The U.S. sanctions are beginning to hurt Russia. They would be even more effective if Europe were to go along.

Since military action is out of the question, economic sanctions are the sharpest weapon Europeans have. They have waited long and prudently to implement them. Should it actually be proven that Malaysian Airlines Flight 17 was shot down by separatists with close ties to Russia, there is no way around sanctions. When, if not now, after innocent civilians from other countries have become victims of the conflict in eastern Ukraine?

The U.S. sanctions are beginning to hurt Russia. They would be even more effective if Europe were to go along. No one wishes an economic war with Russia. It would hurt all sides and make the European Union’s economic recovery more difficult.

But a community of nations that wants to be taken seriously by friend and foe alike must sometimes demonstrate strength along with good sense. Not with a sledgehammer, but with the skillfully placed pin pricks of an economic nature.

Thomas Ludwig is a correspondent for Handelsblatt in Brussels. He can be reached at [email protected]