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Austrian president rails against EU sanctions on Russia

Austrian President Heinz Fischer has told his Russian counterpart Vladimir Putin that Austria could help remove EU sanctions. That is, if Russia ensures complete fulfillment of its side of the Ukraine ceasefire deal.

After a meeting on Wednesday in Moscow with the speaker of Russia's lower house of parliament, Sergei Naryshkin, Fischer said: "It is important to develop a way to overcome these sanctions in the near future. I have always said that sanctions hurt both sides."

However, Fischer - who leaves office in July - also reiterated that Austria is a "loyal member" of the EU and would adhere to decisions adopted regarding Russia.

The ceasefire in eastern Ukraine

brokered by the OCSE calls for both Russia and Ukraine to pull heavy weapons from the border. The agreement also calls for constitutional reforms to be implemented in Ukraine for its eastern region to have more autonomy.

Europe ponders sanctions easing

Fischer's statements echo similar calls made in early February by Austria's Vice-Chancellor Reinhold Mitterlehner, also during an official visit to Moscow. He said that EU sanctions against Russia had not led to any political progress but only damaged Austria's economy.

"We have over a thousand companies doing business with Russia from Austria, and another 500 Austrian firms working in Russia. 40,000 employees are being affected," Mitterlehner said. He also confirmed Austria's commitment to Russia's Nord Stream-2 gas pipeline project to Europe.

On Tuesday French Senate Speaker Gerard Larcher said France is prepared to go ahead with a decision to lift anti-Russian sanctions after the EU summit in June or July. "We have to prepare now as there is no certainty in saying that sanctions should continue," Larcher said.

Meanwhile, Greek Deputy Foreign Minister Ioannis Amanatidis said Wednesday he was in favor of a prompt decision on the lifting of the EU sanctions on Russia.

A man stands on debris in a destroyed house after shelling in a territory controlled by the Ukrainian army near the eastern city of Mariupol, Ukraine

Fighting is still going on in eastern Ukraine

Security issues raised

The two presidents also discussed European security as Austria prepares to assume the chairmanship of the Organization for Security and Cooperation in Europe (OSCE) - which independently monitors the Ukraine conflict - next year.

Naryshkin told reporters afterward that Russia is ready to share with Austria its experience in fighting terrorism and settling refugees, adding that the current crisis in Europe is largely a result of the United States' wars in the Middle East.

"Of course we are following the development of the migration crisis in EU countries and in Europe as a whole with concern," Naryshkin said. "We understand that the tremendous flow of refugees from Middle East and North Africa is connected with the thoughtless and irresponsible policies of the United States, the interference into these regions' affairs and attempts to overthrow the governments in these countries that do not suit Washington's needs."

Costs of sanctions

EU sanctions - which started in 2014 after Russian annexed the Crimean peninsula - have targeted Russia's state finances, energy and arms sectors, which are managed by an elite surrounding Putin.

Russian state-owned banks cannot raise long-term loans in the EU, exports of dual-use equipment for military use in Russia are banned and the EU will not export a wide range of oil industry technology.

Dozens of senior Russian officials and separatist leaders are also subject to Western asset freezes and travel bans.

Sanctions have hit the Russian economy hard. Latest official figures show it slumped 3.7 percent in 2015. The country is facing a second year of recession, partially explained by oil prices slumping, but also US and EU sanctions.

Russia's economic recovery will take longer than previously forecast, and an early end to sanctions would provide only a "limited and short-lived" boost to growth, the World Bank reported Wednesday.

"Due to a continually adverse external environment, Russia's journey to recovery will be long and difficult," the Washington-based lender said. "The removal of economic sanctions is projected to boost investment, though this will have a relatively modest impact during the forecast horizon due to Russia's limited growth potential."

The International Monetary Fund has estimated that the penalties may initially cut real GDP by 1 percent to 1.5 percent. Prolonged curbs may result in a cumulative loss of as much as 9 percent of economic output in the medium term, the IMF said in August.

jbh/bk (dpa)

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