EU braces for Russian reaction to support for Ukraine

Protesters in Kiev fly Ukraine's flag as they demonstrate against Russia's interference in the country - 1 March 2014 The EU wants to help Kiev reform the justice system that protesters lost faith in

The UK, Poland and Sweden have proposed that a European Union civilian mission be set up to help Ukraine improve its justice system.

In a leaked joint paper the three countries argue that "re-establishing confidence in the rule of law in Ukraine will be vital for future stability".

The idea is due to be discussed by ambassadors to the EU in Brussels on Monday afternoon.

Those same ambassadors will also be presented with their biggest dilemma over the whole Ukraine crisis: how to respond if Russia were to invade eastern Ukraine?

Most seriously of all, how much pain would Europe be willing to endure as a result of any Russian retaliation to further sanctions?

The UK, Poland and Sweden suggest that their proposed mission would be set up under the EU's Common Security and Defence Policy. It would see experts in law and order deployed to Ukraine "monitoring, mentoring and advising" officials in both central and regional government.

Ukrainian politicians fight during a parliament session in Kiev - 8 April 2014 EU officials will help reform Ukraine's stormy political system

The European Commission has also announced that a "support group", similar to the task forces put in place to help Greece and Cyprus through their financial crises, is to be set up.

It will be made up of staff from countries in the EU with specific expertise. They will provide technical help to officials in Kiev - and will focus on reforming the political and economic systems in the country.

Red rag to a Russian bull

It is part of a package of measures - as the EU sees it - to support Ukraine and its interim government.

Other measures include development assistance, a loan of 1.6 bn euros (£1.3bn; $2.2bn) to help it pay off some of its debts as well as supporting economic reforms, the temporary removal of customs duties on Ukrainian exports to the EU, and a programme to lessen Ukraine's energy dependence on Russia.

Start Quote

This has become about whether Ukraine has a sovereign right to make its own decisions”

End Quote Diplomat in Brussels

Many in Ukraine will welcome such measures. The protests in Kiev and elsewhere focused on the need for reform to the public sector, particularly the rule of law and order and tackling corruption.

The EU's increasing involvement in Ukraine however will be a red rag to a Russian bull. It will be perceived as more interference from Brussels in a sovereign nation.

"This has become about whether Ukraine has a sovereign right to make its own decisions," one senior diplomatic source in Brussels said recently.

The package of measures form one plank of EU policy on the Ukraine question. Encouraging a pro-European government in Kiev to continue along the path on which it has set itself.

The cost of sanctions

The other side of the policy - sanctioning Russia for its stance - is also being further discussed.

EU ambassadors in Brussels are being brought up to date on extra measures - and their potential costs to Europe - that could be imposed if Russia were to invade eastern Ukraine.

So called "Stage 3" sanctions could include curbs on Russian banks and financial services firms. There might be measures taken against Russia's dominant oil and gas sectors.

Canary Wharf and its surrounding buildings - 12 September 2011 The UK will be concerned about how sanctions on Moscow could affect Russian money in London

It is understood the European Commission and the EU's foreign policy arm, the European External Action Service, are continuing to work on the various options for such sanctions, and what the Russian response to each would be.

"There would be a cost to Europe for doing this," said one source. Any cost would have to be shared across the 28 countries that make up the EU, but how to do this fairly?

Germany could be hit by Moscow because of its reliance on Russian energy supplies. France could suffer because of a deal to supply Moscow with two navy ships worth 1.2 bn euros to the struggling French economy. Britain is nervous because so much Russian money is tied up in London's financial sector. All are vulnerable. As are many smaller EU states.

The precise sanctions being discussed are not being made public. One source said the details are being kept to a "very limited number of people" because it is market- sensitive information.

The measures will be considered by EU foreign ministers meeting in Luxembourg next week. They will wish to have various scenarios ready were Russia to invade eastern Ukraine.

Then there is the meeting of the foreign ministers of Ukraine, Russia, the US and the EU's top foreign policy official. That is due to take place next week, in Europe.

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