EU leaders press Russia, urge new investment

18th December 2014, Comments 0 comments

European Union leaders urged Vladimir Putin to make a "radical change" in his stance on Ukraine Thursday as they boosted sanctions against Crimea despite fears of economic blowback from Russia's spiralling financial crisis.

The leaders at a summit in Brussels also called for the urgent launch of a huge 315-billion-euro ($380-billion) investment plan aimed at kickstarting Europe's moribund economy, although there were no pledges of hard cash.

Foreign policy chief Federica Mogherini said that while the collapse of the ruble was "not good news" for Russia, the EU or the world, sanctions would continue until Moscow stopped backing rebels in eastern Ukraine.

"President Putin and the Russian leadership should reflect seriously about the need to introduce a radical change in attitude towards the rest of the world, and switch to a cooperative mode," she told reporters.

In the latest round of sanctions that have been coordinated with Washington, the EU agreed Thursday to ban all investment in Crimea and cruise ships from its ports as further punishment for Russia's annexation of the region from Ukraine in March.

Western powers have repeatedly accused Russia of stoking the Ukraine crisis, which has killed at least 4,700 people and displaced close to one million, by supplying weapons and troops to the rebels -- which Moscow denies.

- Investment plan -

Leaders were trying to thrash out a "tough and responsible" policy on Russia over dinner, said new European Council president Donald Tusk, Poland's Kremlin-wary former premier, who is heading his first Brussels summit.

"We should send a strong signal on our readiness to further support Ukraine, also financially, as we have done politically today by making the existing sanctions on Crimea and Sebastopol more effective," he said.

He joked that he felt like a "debutant with stage fright", before ringing the tiny bell traditionally used to start the summit.

Tusk later said the leaders had agreed on the need to push forward European Commission president Jean-Claude Juncker's flagship plan to invest in infrastructure and revive the bloc's stalling economy.

"We called for the urgent establishment of the strategic investment programme," Tusk said in a televised statement midway through the summit.

The plan counts on seed money of 21 billion euros leveraged to create 315 billion euros in eventual investments in huge energy, transport and technology schemes.

But in spite of Juncker's call for EU states to put their hands in their pockets, no specific pledges of money would be made at the summit, European sources said.

Juncker had a dig at some leaders who had called the overall package "measly" and pushed them to contribute, adding that whatever they give will not be counted as part of their national budgets, many of which are in breach of deficit rules which Brussels has tightened up considerably during the debt crisis.

- 'De-escalate' sanctions -

Money for Ukraine is another matter, with the EU -- which has already spent $1.6 billion on rescuing effectively bankrupt Ukraine alongside the International Monetary Fund and United States -- set to insist on reforms from Kiev before offering more.

With their eyes on their own struggling economies, there is also little appetite in the EU for more of the broader economic sanctions against Moscow of the sort adopted after the shooting down of Malaysia Airlines flight MH17 in July over Ukraine.

French President Francois Hollande -- who spoke with Putin and Ukrainian President Petro Poroshenko earlier this week -- suggested that the EU could "de-escalate" sanctions if Russia shifted on Ukraine.

The EU "is not in a hardening mindset," another diplomat said, while another added: "We don't want to provoke Putin too much."

Moscow remained uncompromising, saying after the sanctions announcement that the EU needed to understand Crimea was an "inalienable part" of Russia.

Putin earlier told a press conference that Western powers were trying to turn the famed Russian "bear" into a "stuffed figure".

But the Russian leader's tone in recent conversations with EU leaders was "less negative" than in his press conference, a diplomatic source told AFP.

Tusk meanwhile signalled a change of tone from his predecessor Herman Van Rompuy, announcing that the summit would wrap up Thursday instead of Friday, a far cry from the all-nighters at the height of the euro crisis.


© 2014 AFP

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