President Barack Obama’s speech at the United Nations Wednesday offered to roll back the U.S. sanctions if Russia takes the “path of diplomacy and peace.” This overture comes on the heels of an emerging ceasefire between Russia and Ukraine and continuing discussions in Minsk to find a political solution to the turmoil in eastern Ukraine.
Obama’s U.N. speech, however, opens up the possibility of creating some daylight between the United States and the EU sanction programs. The European Union remains openly divided over the current sanctions — and far more economically bruised than the United States.
So even though Obama continues to talk tough on Ukraine, his offer of yet another “off ramp” runs the risk of being seized not just by Russian President Vladimir Putin but also by the EU.
What are the actual prospects for removing U.S. and EU sanctions? This question remains central to the international business community and to the broader resolution of the Ukrainian crisis.
The EU represents the weak link in the joint Western response to Russia’s action in Ukraine. It was only September 12 that the most recent round of sanctions was implemented in the wake of Russia’s “incursion” in southeastern Ukraine. The EU reluctantly agreed to these sanctions covering dual-use technologies, deepwater Arctic oil exploration and decreased access to Western financing. Several countries – including Slovakia, Hungary, Austria and the Czech Republic — expressed misgivings about this new round, especially since the ceasefire was just coming into place.