On sanctions, meets Putin

EU Commission head Jean-Claude Juncker warned Russia Thursday that the 28-nation bloc will only lift its sanctions if the Kremlin fully implements a Ukraine peace deal.

"The next step is clear: full implementation of the agreement -- no more, no less," Juncker told Russia's main economic forum in Saint Petersburg ahead of a meeting with President Vladimir Putin.

"This is the only way to begin our conversation and the only way to lift the economic sanctions that have been imposed."

During the meeting, part of which was broadcast on Russian state television, Juncker told Putin that "some in Europe weren't pleased" with him meeting the Kremlin strongman but stressed it was an opportunity to "exchange opinions".

The Juncker-Putin meeting -- their first in Russia since the EU slapped sanctions on Moscow over Ukraine in 2014 -- had sparked Kremlin hopes it might signal the start of a return to business-as-usual with the bloc.

Russia's ambassador to the EU, Vladimir Chizhov, told Russian news agencies that Putin and Juncker had discussed energy issues but did not address the sanctions.

Putin will also host Italian Prime Minister Matteo Renzi at the three-day conference in Russia's second city just weeks before the expiry of EU sanctions that have helped plunge Russia's economy into recession.

Putin also sat down with UN chief Ban Ki-moon alongside the world body's envoy on Syria, Staffan de Mistura, as he seeks to recast Moscow as a more stable partner for the West and bolster his country's flagging economy.

- EU 'united' -

The EU has tied the lifting of the punishing sanctions that have battered Russia's financial sector to the implementation of a deal brokered by the leaders of France and Germany in Minsk in February 2015 to end the pro-Russian uprising in east Ukraine.

But the accord has stalled as the violence -- that Kiev and the West says is masterminded by Moscow -- rumbles on.

And despite some signs of cracks in the EU over extending the sanctions, Juncker insisted the bloc was "united".

Diplomatic sources in Brussels told AFP that EU members could agree to renew the economic sanctions against Russia for six months as early as next week as they look to clear the schedule ahead of a summit at the month's end that is likely to be dominated by Britain's EU referendum.

Despite the frosty ties with Moscow, however, Juncker insisted he had come to Russia to try to improve relations.

"If our relationship today is troubled and marked by mistrust, it is not broken beyond repair. We need to mend it, and I believe we can," he said.

- Back to business? -

Despite the worst feud between Russia and the West since the Cold War, there are a host of top European business figures at the conference which Moscow has tried to pitch as its answer to Davos.

Putin met Royal Dutch Shell boss Ben van Beurden and the energy giant inked a memorandum of understanding with Russian gas giant Gazprom on the potential construction of a major liquefied gas plant in the country.

The CEOs of major companies including France's Total, Societe Generale and JCDecaux and European multi-national Schneider Electric are participating in the forum.

Businessmen say they are keen to bolster ties despite the sanctions -- which saw Russia slap a retaliatory embargo on most agricultural produce from the EU and the US -- and say Moscow is trying to repair its tarnished image.

Former French president Nicolas Sarkozy, who met Putin on Wednesday, said he had asked the Russian leader to unilaterally lift Moscow's embargo, to "launch a positive dynamic" that would see the EU remove its sanctions.

Russia's energy-driven economy -- hit by both the West's punitive measures and the drop in oil prices -- has slumped into the longest recession since Putin came to power some 16 years ago.

Despite claims from officials that the economy could return to limited growth soon, there are serious fears of a prolonged economic stagnation and the authorities are pledging much-needed structural reforms to attract investors.

"We need to change the structure of the economy to make it less dependant on external factors," Finance Minister Anton Siluanov told journalists.

"The strategic task is to generate higher rates of growth in the economy."

Source: AFP