BRUSSELS (Reuters) - European Union leaders will discuss Russia’s currency crisis on Thursday amid worries it could impact their own economies, but they will not relax sanctions imposed against Moscow over Ukraine, diplomats said.
On the contrary, the EU plans this week to widen a ban on investment in Crimea to target Russian Black Sea oil and gas exploration and the tourism sector. Moscow annexed Crimea from Ukraine in March.
The EU leaders are due to discuss Ukraine and Russia at a summit dinner in Brussels after talks about the EU economy, including a plan to foster investment.
Russia’s financial crisis, a result of plunging oil prices and exacerbated by Western sanctions, will form part of a broader discussion of EU-Russia relations, officials said.
“We are all watching the economic developments in Russia with concern,” a European Commission official said in Berlin. “No one has an interest in Russia falling into a deep depression.”
However, leaders will agree that the EU “will stay the course” on sanctions and that they are ready to take further steps if necessary to promote a political solution in eastern Ukraine, according to a draft statement seen by Reuters. Pro-Russian separatists are battling Kiev’s forces in the east.
EU leaders will also say they are ready to offer further financial support for Ukraine, provided it carries out reforms.
The International Monetary Fund estimates Ukraine needs another $15 billion (£9.59 billion) but the EU has only limited capacity to help, a top EU official said.
Russia has responded to the EU and U.S. sanctions against its finance, defence and energy sectors by banning most Western food imports. EU farmers and some other sectors have been hurt.
“The cost to EU citizens of both the Russian steps and the wider economic fallout is obviously a consideration, but it isn’t one that has reached a tipping point yet which is encouraging people to revise the sanctions policy,” one diplomat said, speaking on condition of anonymity.
Sanctions have not yet changed President Vladimir Putin’s Ukraine policy, but they are having a big impact on Russia’s economy, “which may over a much longer period of time lead to a change of policy in eastern Ukraine, if not Crimea”, he said.
“Sympathy for Putin is still limited within the EU,” another diplomat said.
A third diplomat played down the need for a quick reaction to the Russian crisis, saying the situation was not as severe as in 1998 when Moscow defaulted on its debts: “It would be premature to consider any particular actions (now).”
While EU governments vary in their enthusiasm for sanctions, there is an uneasy consensus to keep them for now, though tensions may resurface next year when they come up for annual review.
The summit will be the first chaired by new European Council President Donald Tusk, former prime minister of Poland which has been tough on Russia.
Ukraine’s president has not been invited to the summit, even though diplomats say he lobbied for an invitation.
Additional reporting by Alastair Macdonald, Jan Strupczewski, Robin Emmott, Tom Koerkemeier in Brussels and Andreas Rinke and Noah Barkin in Berlin; Editing by Gareth Jones