How Sanctions Against Russia Could Come Back To Bite Europe

EU countries are threatening punitive economic measures against Russia for its involvement in Crimea, but longstanding ties between Russia and the EU could make sanctions a double-edged sword.

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SCOTT SIMON, HOST:

This is WEEKEND EDITION from NPR News. I'm Scott Simon. We're going to begin this hour with Ukraine where yesterday Russia signaled for the first time that it is prepared to annex Crimea. Now, the U.S. and the European Union have warned Russia against taking such a vote. This week, the EU warned of punitive economic measures if Russia does not pull back in Crimea but it stopped short of imposing economic sanctions on Russia. NPR's Eleanor Beardsley has this report.

ELEANOR BEARDSLEY, BYLINE: Two Russian assault ships are currently under construction at the Saint Nazaire shipyard in western France. The billion-plus dollar contract provides thousands of French jobs. Despite France's vocal diplomatic efforts on behalf of Ukraine, Paris still plans to deliver the two amphibious assault vessels to Russia. Ironically, one is named the Sevastopol, after the Crimean strategic harbor at the center of the current crisis.

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UNIDENTIFIED MAN: The European Union has united with the interim government of Ukraine to declare...

BEARDSLEY: The British would very much like to penalize Russia for its encroachment on the Crimean Peninsula, as long as it costs the U.K. as little as possible. A leaked document this week said Britain should definitely not close London's financial center to Russian oligarchs. Serge Sur, a professor of international relations at Paris 2 University, says Europe actually doesn't have much leverage over Russia.

SERGE SUR: Any kind of pressure could backfire. Look at military means. Europe has no military means, and nobody is willing to exert any pressure to Russia in this field. If you are making some pressure about trade, it will backfire because Europe needs Russia.

BEARDSLEY: Europe is Russia's biggest trading partner. Bilateral trade is worth hundreds of billions of dollars annually and Europe is dependent on Russian money and gas.

GEORG ZACHMANN: In the last year, Europe imported about 130 billion cubic meters from Russia, which is about a third of European natural gas consumption.

BEARDSLEY: That's Georg Zachmann, energy analyst with the Brussels-based Bruegel think tank. He says Europe could cope with a short disruption in Russian gas but long term it would be expensive and would destroy trust and cooperation between Europe and Russia. French parliamentarian Pierre Lellouche was Minister of European Affairs under former president Nicolas Sarkozy. Lellouche says diplomatically, Russia cannot be sidelined. It plays a major role in all world affairs, whether it's Asia, the Middle East, Syria or Iran. He faults the EU for having no coherent strategy to deal with Russia or its President Vladimir Putin.

PIERRE LELLOUCHE: The heart of the issue is that in the face of Putin who has a number of very clear objectives, the Europeans do not have any. And that's why we've been always fighting this on the defensive. Always one train too late.

BEARDSLEY: Lellouche says if the EU had come up with the 11 billion euros to help Ukraine last November instead of last week, we wouldn't be where we are. There are also stark divisions within Europe over how to handle Russia. Former soviet bloc nations, such as Poland, want tough measures, and Germany, which sees Russia as a huge, huge market and is particularly reliant on Russian gas, wants a softer approach. Lellouche regrets that the Ukraine issue has turned into an American-Russian confrontation.

LELLOUCHE: To hear Cold War rhetoric, it's not going to help because this is what a lot of nostalgics of the Cold War really wanted in Moscow. They want to fight it out with the Americans.

BEARDSLEY: Lellouche says Europe has to play a long game and show Russia that being part of the international community has far greater benefits than being isolated. Eleanor Beardsley, NPR News, Paris.

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