EU leaders press Russia, focus on 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 meeting at a summit in Brussels also backed a huge 315-billion-euro ($380-billion) investment plan aimed at kickstarting Europe's moribund economy, although pledges of hard cash were in short supply.

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.

- 'Tough and responsible' -

Leaders would try 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 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.

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

An uncompromising Putin earlier told a press conference that Western powers were trying to turn the famed Russian "bear", a symbol of might, into a "stuffed figure".

And given the effect on their own economies of the recent collapse of Russia's currency, leaders at the summit are wary of expanding sanctions as they did after the shooting down of MH17 Malaysia Airlines flight in July.

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."

Hungarian Prime Minister Viktor Orban, who has traditionally been closer to Putin, expressed concern that sanctions "gravely affect" his own country's economy which is heavily dependent on trade with Russia.

The EU, which has already spent $1.6 billion on rescuing effectively bankrupt Ukraine alongside the International Monetary Fund and United States, will reiterate that it is ready to do more to help Kiev, but only in return for far-reaching reforms.

- Investment plan -

Also on the table at the summit will be European Commission president Jean-Claude Juncker's flagship investment plan to revive the bloc's stalling economy, a massive scheme that is still waiting for hard cash pledges from EU states.

"I read that some prime ministers have expressed that the volume of the package is a bit measly," said Juncker, whose plan counts on seed money of 21 billion euros leveraged to create 315 billion euros in eventual investments.

But as contributions would not count against the EU budgets of cash-strapped nations, "there is almost no reason for member states not to contribute to the financing," Juncker added.

German Chancellor Angela Merkel put the backing of the EU's biggest economy behind the plan, which will focus on large infrastructure projects for transport, energy and technology.

"We can now start with the investment programme. The first proposals are on the table for the frame, which now has to be filled with concrete projects," she said.

Last week, member states released a list of 2,000 projects worth 1.3 trillion euros in hopes of attracting funding.

© 2014 AFP

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