Step-by-Step Rapprochement: Germany Considers Easing of Russia Sanctions

With the Wednesday evening sun shining in his face, German Economics Minister Sigmar Gabriel is standing at the entrance to the HanseMesse convention center in the northern German city of Rostock. He's surrounded by cardboard sandwich boards displaying the center's motto: "Where the world comes together." Today, the sentence is half true at best: The world isn't coming together in Rostock, rather German and Russian business leaders are converging here. It is the second "Russia Day" and Gabriel is the keynote speaker.

The focus of the gathering is on business, but when Russia is involved, politics are never far away. Even Gabriel's appearance sends a political message, as is his demonstratively friendly treatment of Russia's industry minister -- not to mention the first sentence he speaks into the microphone: "Isolation is not at all helpful."

Later in his speech, Gabriel expands on that sentiment, saying isolation is not a tenable policy and that only continued dialogue is helpful. He says that Russia has recently shown that it can be a reliable partner and mentions the nuclear deal with Iran as an example. He says that Russia and the world are dependent on each other -- and that the time has come for a step-by-step easing of sanctions.

Gabriel voiced a similar message prior to the most recent extension of the sanctions against Russia. Nothing came of it then, but things could be different this time.

As expected, G-7 leaders reiterated their hardline approach to Moscow in the Japan summit's closing statement. Chancellor Angela Merkel complained last Thursday that there still isn't a stable cease-fire in Ukraine and the law pertaining to local elections in eastern Ukraine, as called for by the Minsk Protocol, still hasn't been passed. That, she said, is why "it is not to be expected" that the West will change its approach to Russia.

What Merkel didn't say, though, is that behind the scenes, her government has long since developed concrete plans for a step-by-step easing of the sanctions against Russia and that the process could begin as early as this year.

Thus far, the message has been that the trade and travel restrictions will only be lifted once all the provisions foreseen by the Minsk Protocol have been fulfilled. One-hundred percent in return for 100 percent.

Now, however, Berlin is prepared to make concessions to Moscow -- on the condition that progress is made on the Minsk process. "My approach has always been that sanctions are not an end in themselves. When progress is made on the implementation of the Minsk Protocol, we can also then talk about easing sanctions," says Foreign Minister Frank-Walter Steinmeier.

Chancellery Changing Course

The Chancellery also supports the new approach. Thus far, it was the Social Democrats that were particularly vocal about rapprochement with Russia. Led by Economics Minister Gabriel, the SPD is Merkel's junior coalition partner. While Steinmeier, also a senior SPD member, has never explicitly demanded the easing of sanctions, he has long supported Russia's return to the G-7. Merkel, by contrast, had always maintained a hard line. Now, though, the Chancellery also appears to be changing course.

DPA

German Foreign Minister Frank-Walter Steinmeier (left) and Economics Minister Sigmar Gabriel together with Chancellor Merkel.

The plan is to lift initial sanctions in return for Moscow's cooperation on planned local elections in eastern Ukraine. Berlin is not looking at lifting those financial sector penalties that are particularly painful to Russian President Vladimir Putin. Nor is there a willingness to revisit the sanctions imposed in response to Russia's annexation of the Crimean Peninsula. But eliminating travel restrictions imposed on certain select individuals, such as members of the Russian parliament, could be considered. Another approach under examination is that of simply reducing the interval for extending the sanctions from six months to three months.

Berlin's argument is that, in a Europe where those in favor of sanctions and those opposed to sanctions are drifting ever further apart, it is necessary to find a way to keep the EU on the same page. Two weeks ago, Steinmeier warned that, with Brussels set to vote on an extension of the penalties soon, resistance to doing so is growing within Europe. It is becoming more difficult, he said, to arrive at a uniform EU position on the issue, which is necessary since the sanctions extension must be passed unanimously. The German line is that Putin must not be given the impression that he can divide the EU.

"The highest priority is that of preserving the EU consensus," says Gernot Erler of the SPD, who is the German government's special coordinator for Russia policy. "If we have to pay a price for that, we should be prepared to do so. The worst outcome would be the disintegration of European unity and the EU losing its role."

In Brussels, the European Council, the powerful body representing the leaders of the 28 EU member states, and the European Commission, the EU executive, are staying firm officially: Only after the Minsk Protocol has been 100 percent fulfilled can sanctions be lifted. That is the approach passed unanimously last year and extended for six months last December.

European Council President Donald Tusk said last Thursday at the G-7 in Japan that he was "quite sure" that a decision to renew the sanctions would be made "in the next two or three weeks without huge discussions." Tusk is opposed to putting the issue on the agenda for the EU summit scheduled for the end of June, preferring instead to have sanctions discussed by EU ambassadors in Brussels.

Questioning the Sanctions Regime

But more and more EU member states have begun questioning the strict penalty regime, particularly given that it hasn't always been the Russians who have blocked the Minsk process. Despite Tusk's apparent optimism, indications are mounting that getting all 28 EU members to approve the extension of the sanctions at the end of June might not be quite so simple. Berlin has received calls from concerned government officials whose governments have become increasingly skeptical of the penalties against Russia but have thus far declined to take a public stance against them.

Members of some governments, though, have very clearly indicated that they are not interested in extending the sanctions in their current stringent form. Austrian Vice Chancellor Reinhold Mitterlehner is among the skeptics as is French Economics Minister Emmanuel Macron. So too are officials from Italy, Spain, Greece and Portugal.

Hungary has been particularly outspoken. Hungarian Foreign Minister Peter Szijjarto said last Wednesday following a meeting with his Russian counterpart Sergey Lavrov in Budapest that his country would not accept an automatic extension of the sanctions regime. Hungarian exports to Russia have collapsed as a result of the penalties, a problem experienced by the Czech Republic and other Eastern European countries as well.

Italian Prime Minister Matteo Renzi is another EU leader who has long been critical of the EU's approach to Russia. Renzi is bothered by the fact that his country has suffered economic losses as a result of the sanctions while Germany has continued working together with Russia on the Nordstream Pipeline across the Baltic Sea. Italy, the EU's third largest economy, is one of Russia's largest trading partners in Europe.

The mood is changing in France as well. At the end of April, the French parliament adopted a non-binding resolution calling for the end of the penalties imposed on Moscow. One of the reasons cited was that French farmers are suffering the consequences. Sanctions critics also argue that Moscow is a necessary partner when it comes to pacifying Syria and that constantly keeping Russia at arm's length is counterproductive.

The Netherlands, which currently holds the rotating EU presidency, is in a difficult situation. In an April referendum, the Dutch voted against the planned European Union association agreement with Ukraine. The issue wasn't directly related to the issue of Russian sanctions, but some have interpreted it as a pro-Russian vote. Since then, the Dutch government has been acting extremely carefully.

Meanwhile, Great Britain, Poland and the Baltic countries are leading the opposition to any relaxation of the sanctions in place against Russia. But a possible compromise is in the works. Poland and the three Baltic countries of Estonia, Latvia and Lithuania could agree to a step-by-step easing of the sanctions were more NATO troops to be stationed in those countries. Such an arrangement would allow both camps to save face.

'A Dangerous Precedent'

It is certain, however, that Berlin's plans will not be particularly well received on the other side of the Atlantic. "The sanctions against Russia should only be lifted once the Protocol is comprehensively implemented," says US Ambassador to Germany John B. Emerson. "A modification would not send a strong message. It could become a dangerous precedent."

Part of the rationale for holding out the prospect of easing sanctions is that of providing Moscow with an incentive to finally focus on making progress on Minsk. Putin holds a significant amount of influence over separatists in the Donbass region of eastern Ukraine. Were the Russian president to convince them to finally allow elections there, and if the OSCE were to confirm that they were free and fair, the penalties currently in place could be eased.

For that to happen, though, Ukraine must pass a new election law. Recently, there has been some progress made toward that end. Whereas the Ukrainian government and the separatists had been negotiating the new law directly, Russia is now also a party to the talks and has been exerting influence on the separatists. At the same time, hold-ups on the Ukrainian side have decreased in the wake of Prime Minister Arseniy Yatsenyuk's April resignation. If the new election law could be passed by the end of June and if uncontested elections were held soon thereafter, the process of easing sanctions could begin as early as this fall.

The minimal lifting of sanctions with strict conditions attached would be an attempt to improve relations with Russia without returning to normality -- and without sending Putin the message that the West has resigned itself to Russia's annexation of Crimea and its destabilization of eastern Ukraine. That, at least, is the hope. But there are dangers: Putin could interpret the move as a weakness and as a sign that the West is not unified enough to stand up to his aggression.

Mistrust remains extreme on both sides, as does frustration. Putin's military provocations have made the present the most dangerous period since the end of the Cold War. NATO, meanwhile, is planning to pass a resolution at its early July summit that will provide for an expansion of the alliance's presence in Eastern Europe -- a move that Russia is certain to interpret as a provocation.

At the same time, though, the West has shown an interest in increased dialogue with Moscow after an extended period of virtual silence. The most obvious signal is the reactivation of the NATO-Russia Council, which -- largely at the behest of German Foreign Minister Steinmeier -- will soon meet for a second time at the ambassador level.

Meaningless Dialogue?

Discussion, though, is taking place at all levels. Contacts that were considered unthinkable until recently are now being rebuilt. In early April, for example, a group of German parliamentarians from Merkel's conservatives, Gabriel's SPD and the Left Party came together in Moscow with Sergei Naryshkin as part of a conference held by the German-Russian Forum. Naryshkin is chairman of the Duma, Russia's parliament, and is on the EU sanctions list. A further encounter with Naryshkin is planned ahead of the mid-July meeting of the Petersburg Dialogue, the bilateral discussion forum aimed at promoting exchange between Russian and German civil society. The session is to take place in St. Petersburg and keynote speaker on the German side will be Hamburg Mayor Olaf Scholz, an indication that the controversial dialogue platform is once again receiving high-level backing.

There has also been a series of meetings with Russian parliamentarians in Germany in recent weeks. At a mid-May event organized by the Aspen Institute, lawmakers from Russia, the US and Germany participated in a confidential meeting outside of Berlin. Shortly thereafter, the Club of Three, a German-French-British dialogue platform, met in Berlin for talks with Russian counterparts.

But without political rapprochement, such dialogues are meaningless. Furthermore, participants say they often don't go beyond the exchange of hardened positions with very little mutual understanding on display. Indeed, the Russian side has already indicated that talking is not sufficient, a message consistent with Moscow's extreme self-confidence since the beginning of Putin's intervention in Syria.

As such, Berlin's new approach to Russia is not without risk. Indeed, even if the EU agrees collectively to pursue such a course in relation to Moscow, there is a danger that Russia will simply reject it as being too little, too late.

By Matthias Gebauer, Christiane Hoffmann, Peter Müller, Ruben Rehage, Michael Sauga and Christoph Schult

spiegel.de