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EU holds off announcing new Russia sanctions

Europe continues an incremental approach toward Moscow despite public outrage over MH17.

Mh17 mourners 2014 07 22Enlarge
Mourning in Amsterdam after the MH17 crash. (John Thys/AFP/Getty Images)

LISBON, Portugal — A meeting of European Union foreign ministers on Tuesday produced no immediate new sanctions in response to the killing of 298 people on flight MH17, but the EU says it is moving toward tougher measures that could include restricting defense exports and limiting Russia's access to capital markets.

The EU is set to approve an expanded list of individuals, companies and entities to be hit with travel bans and asset freezes on Thursday.

At the same time, EU experts will present proposals for wider sanctions, "including on access to capital markets, defense, dual use goods, and sensitive technologies, including in the energy sector," said a statement from the 28 ministers after their meeting at EU headquarters in Brussels.

Polish foreign minister Radek Sikorski — among the leading voices calling for strong European action — said the decision "should make President Putin realize that this time we're for real, that this is serious."

However, the incremental nature of the European response is a disappointment to those who had hoped for quick action. Britain had appealed for an EU arms embargo while Lithuania asked for the Russian-backed groups who have seized parts of eastern Ukraine to be blacklisted as terrorist organizations.

Frans Timmermans, the foreign minister of the Netherlands — which lost 193 people in the apparent missile strike over Ukraine — declined to directly answer a journalist's question about whether he was satisfied with the EU decision.

"I'm happy with the fact that so many of my colleagues expressed solidarity and support for the victims and their loved ones," he said after the meeting. "I'm also happy that we did take a decision that is, I think, quite forceful and we reached this decision unanimously."

Getting unanimity on more direct action proved impossible.

On the eve of the meeting, French President Francois Hollande made clear he would resist pressure from several EU nations to suspend the planned delivery to Russia of a high-tech warship — designed to carry surface-to-air missiles and attack helicopters — which is currently being constructed in a French shipyard.

"The deal was concluded in 2011, the ship is almost finished and it must be delivered in October," Hollande was quoted telling reporters in Paris. "The Russians have paid, we'd have to pay them back 1.1 billion [euros, or $1.5 billion]."

Hollande did, however, suggest the delivery of a second Mistral class assault vessel planned for 2016 would depend on "Russia's attitude."

Earlier on Monday, British Prime Minister David Cameron told parliament in London that it would be "unthinkable" for Britain to consider delivering a warship to Russia under similar circumstances.

French officials retorted that Cameron should focus more on cracking down on Russia's use of the City of London's financial markets, BP energy deals and London's role as a playground for Russian oligarchs.

Britain’s finance minister, George Osbourne, on Monday said London was now prepared to take an economic hit in order to increase pressure on Putin.

The range of areas the EU is looking at could include limiting Russian access to European capital markets, which could further harm the country's recession-hit economy.

Restricting so-called dual-use exports that might have military purposes and the sale of high-tech goods to Russia's key energy sector could also have a serious impact.

More from GlobalPost: Here's all the evidence (so far) that pro-Russian separatists shot down MH17

And there may yet be an EU arms embargo, albeit one that excludes the French warships by covering only new military contracts.

Italian Foreign Minister Federica Mogherini — who has been criticized for taking too soft a line due to Italy's close energy ties with Russia — said the imposition of economic sanctions looked "inevitable" unless Putin displays a major turnaround.

To avoid sanctions, the EU wants the Kremlin to ensure that Russian-backed fighters in eastern Ukraine cooperate with the international investigation into the missile attack, end the flow of weapons and fighters over the border, and withdraw Russian forces massed close to Ukraine.

But there will be no be automatic adoption of economic sanctions. Some officials said a new summit of EU leaders would be needed for that. 

http://www.globalpost.com/dispatch/news/regions/europe/140722/eu-new-russia-sanctions-mh17