Why the EU must close the loopholes in its leaky sanctions regime

good morning Today, the leader of the European Liberals tells our Parliament correspondent that the EU needs to do more to prevent third countries from circumventing sanctions on Russia. And my Balkan colleague reports how the president of Serbia was convinced not to visit Russia this week.

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Watch out for the vacuum

With Ukraine facing a harsh third winter of war, European liberals are pressing the EU to lean on countries that still allow military goods to flow to Russia. write Andy Bounds.

Context: Despite 14 rounds of sanctions, the EU is struggling to prevent Moscow from acquiring technology for its war machine, says Valérie Hayer, leader of the Renew Group in the European Parliament, and it’s time to end the “blind spot of the evasion of sanctions”.

“The Russian economy is not in decline, despite the 14 sanctions packages we have implemented. They have affected it, but not enough,” he said in an interview with the Financial Times in his office in Strasbourg.

“And we can see that among the blind spots is the evasion of sanctions, especially by the countries of Central Asia.

“Just look at the numbers. Between 2021 and 2023, exports between Kazakhstan and Russia increased from 40 million euros to 2.2 billion euros. . . . These are all banned products, chemicals, semiconductors, drones, hardware computer”.

Hayer, close to French President Emmanuel Macron, wants to review the EU’s strategy in Central Asia, which is now five years old.

He envisions carrots and sticks to bring the former Soviet Union region closer to the EU and reduce its dependence on Russia, including holding regular summits.

“We must demand that the European Union push because . . . there are systematic elements about the requirement that the sanctions against Russia be respected.”

She hopes to have the help of the G7 and European companies.

“Everyone knows they shouldn’t sell to Russia. So everyone has to take their responsibilities and European companies have to respect these sanctions,” he said.

MEPs cannot make sanctions policy, but they can shape the debate. Renew was among the first to call on the EU to stop imports of Russian oil and gas at the start of the war. At first some laughed it off as unfeasible, but now it is considered an eventuality.

Chart of the day: Barnier’s budget

After 50 years without balancing its budget, France plans to raise taxes and cut spending to the tune of 60 billion euros next year. But this belt-tightening poses a risk to growth in an economic climate as fragile as the country’s government.

With friends like these

Serbian President Aleksandar Vučić has declined an invitation from his Russian counterpart Vladimir Putin to attend this week’s Brics summit in Russia, opting instead to spend time with European Commission President Ursula von der Leyen and other EU leaders. write Marton Dunai.

Context: Vučić, who has straddled Russia and the West since the start of the full-scale invasion of Ukraine, had been invited to join the group called Brazil, Russia, India, China and the South -africa, but declined. He has now reinforced that decision with his no-show at this week’s summit in the city of Kazan.

His European meetings, which include hosting fellow center-right European People’s Party leaders Donald Tusk of Poland and Kyriakos Mitsotakis of Greece tomorrow, show that Vučić is seeking acceptance from the Western mainstream while get Putin’s favor. Von der Leyen will visit Serbia on Friday.

Although Serbia has opposed EU measures such as sanctions against Russia, Vučić said he had told Putin he was not in a position to join the Brics leaders, saying the busy agenda was a reason but not an excuse to skip.

“I told him (Putin) that it would be difficult (to join the Brics summit) even without all this, but that we would send a delegation of four of our ministers,” Vučić said, recounting a conversation that was a of the few times occasions the two leaders have spoken directly.

The delegation traveling to Moscow will include pro-Russian figures such as Deputy Prime Minister Aleksandar Vulin and Nenad Popović, minister without portfolio and owner of ABS Electro, a large technology group that serves Russian clients.

And Vučić could be making a one-on-one visit soon.

“I spoke with President Putin about the 80th anniversary of the victory over fascism, which will take place (May 9) next year,” he said. “It will be, I guess, the biggest post-WWII spectacle in Moscow’s Red Square.”

What to see today

1. The president of the European Commission, Ursula von der Leyen, visits Albania and meets with Prime Minister Edi Rama.

2. Turkish President Recep Tayyip Erdogan meets with Vladimir Putin of Russia.

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• Risk of deglobalization: A fragmented approach to global banking regulation could unleash destructive ‘economic nationalism’, warns UBS boss Sergio Ermotti.

• peace sign: Volodymyr Zelenskyy has said that Russia ending airstrikes on energy targets and Ukrainian cargo ships could “sign off” the negotiations.

• Thawed asset: The Russian oligarch still owned a luxury Italian resort months after being sanctioned, according to documents seen by the FT.