"A shot in the foot": why Europe may waive the new sanctions?

On Friday Europe must decide whether to tighten the sanctions against Russia or not. On Monday the Council of Permanent Representatives Committee of the EU participating countries (COREPER) discussed the new sector sanctions in their hardest form since the beginning of the Ukrainian crisis. But some EU members, fearing the consequences for their economies, more and more openly speak out against the increasing the pressure on Russia. Yesterday's agreement between Vladimir Putin and Petr Poroshenko on the peaceful regulation of the conflict in the Donbass can mitigate the alleged anti-Russian actions.

The new package of sanctions, which the European Union discusses, should further restrict the access to the capital markets to the Russian state-owned companies, the Financial Times and Reuters stated this week, citing the EU draf documents. In particular, the state-run companies may not be allowed to attract the syndicated loans and debt financing with a maturity of more than 30 days. Now this restriction applies only to debt instruments with a maturity of more than 90 days and only applies to the Russian state banks. In addition, the EU can further restrict the export of the technologies for the Russian fuel and energy sector, and to prohibit all exports of the dual-use goods, including for civilian purposes (now the embargo applies only to the military industry).