Fresh EU sanctions against Russia agreed after heated row

 Ban on sales of luxury products worth more than £250 is part of the new measures aimed at crippling the Russian economy

Source - Daily Telegraph - 14/03/22

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Germany insisted on watered-down EU sanctions against Russia on Monday night, in a move that sparked fury from other members of the bloc.

Berlin demanded “carve outs” for raw materials vital to its industrial heartlands, leaving capitals in eastern Europe dismayed.

Hours earlier Christian Lindner, Germany's finance minister, said his country favoured tougher measures to heap “maximum pressure on Putin”.

Following fractious talks, a furious Polish envoy fired off an email to the bloc's other 26 embassies expressing disgust.

EU ambassadors only agreed on a fourth round of measures against the Kremlin after marathon negotiations in Brussels.

The sanctions were only given the green light after a long and ill-tempered debate between increasingly divided member states.

Doves v hawks

EU diplomats say two clear opposing camps have emerged, between capitals who favour either a doveish or hawkish approach.

Germany, Italy, Hungary and Bulgaria oppose tougher measures, whilst Poland and the Baltics are pushing for a more robust response.

Talks that had been expected to go smoothly had to be broken off on Monday, as desperate officials tried to broker a peace deal.

Germany was accused of effectively holding the negotiations to ransom with its demands to water down measures on raw materials.

Berlin even secured a weakening of current sanctions on trade in aluminum, copper, palladium and iron ore with Kremlin-owned firms.

Aluminum is widely used in the production of high end cars like BMWs, Audis, and Mercedes Benz.

Palladium is a key component in the petro-chemicals industry, whilst copper and iron ore are crucial to manufacturing.

The “wind down period” companies are being given to extricate themselves from Russian contracts is also being doubled to six months.

Meanwhile, the ban on energy investments includes carve outs for those related to the transport of oil and gas.

An EU diplomat told The Telegraph: “There’s a growing rift between Germany, closely followed by Italy and the more ambitious member states.

“Berlin is afraid that in the end, it will be hurt more by the sanctions than the Russian economy itself.

“You wonder how we ever got into the position where Germany is so dependent on Russian raw materials that it can’t even have an active foreign policy.

“This is not the unified signal the EU wants to send out.”

A second EU diplomat added: “Obviously all of this was and is hard to swallow in capitals closer to the Russian aggression than Berlin.

“They were pretty angry. They are afraid the others are missing the sense of urgency, especially as rockets are landing near their borders.”

Germany has some of the closest trading ties to Russia within the EU and is especially reliant on it for fossil fuels.

It gets two-thirds of its natural gas and 55 per cent of its coal from the country and is resisting calls from other EU nations for tougher energy sanctions.

The sanctions, signed off late in the evening, include a ban on sales of all luxury products to Russia worth more than £250.

Caviar, cigars, diamonds, fine wines, leather suitcases, electronics and even musical instruments are covered under the new law.

Exports of cars worth more than £42,000 will be stopped and 15 oligarchs, including Roman Abramovich, face asset freezes and travel bans.

The newest package of sanctions also features an embargo on imports of iron and steel from Russia, with EU firms forbidden from investing in the country.

And it enacts a G7 pledge to strip Moscow of its privileges at the World Trade Organization, meaning tariffs on its exports will skyrocket.

EU nations have agreed to boot Russia out of the international credit ratings system, further restricting its ability to raise cash.