EU extends Russia sanctions to Jan 2017

The European Union on Friday formally extended damaging economic sanctions against Russia by six months due to a lack of progress in resolving the conflict in eastern Ukraine.

Russia immediately blasted the "short-sighted" move and said it would not make Moscow change course.

The measures target the oil, financial and defence sectors of the Russian economy and were first imposed after the shooting down of Malaysia Airlines flight MH17 in July 2014, blamed on pro-Moscow rebels in eastern Ukraine.

"On 1 July 2016, the (European) Council prolonged the economic sanctions targeting specific sectors of the Russian economy until 31 January 2017," the EU said in a statement.

The EU said in a tweet in Russian that it was rolling over the sanctions because the provisions of the February 2015 Minsk peace deal aimed at ending the Ukraine conflict were "not fully implemented".

EU ambassadors agreed on the extension in principle on June 21.

Ukrainian President Petro Poroshenko thanked the EU, saying its efforts to lobby the bloc had "borne fruit, despite the views of sceptics and pessimists".

"This must force Russia to implement the Minsk Agreements and end its occupation of Crimea," he said in a reaction on Facebook.

Lithuanian President Dalia Grybauskaite warned that the sanctions would go on until the conflict was resolved. "What goes around, comes around. Sanctions continue until Minsk agreements are fully implemented," she tweeted.

French President Francois Hollande and German Chancellor Angela Merkel briefed fellow EU leaders on the progress of the Minsk agreements at a summit this week, officials said.

- Russia slams 'absurd' sanctions -

Russia has hit back with its own embargo against Western food items, which it extended on Wednesday until the end of 2017.

On Friday the Russian foreign ministry said it viewed the move as "a continuation of the short-sighted policy of Brussels" and that it was "absurd" to link the sanctions to a failure to make progress on a peace deal to end fighting in eastern Ukraine.

"In essence the European Union has with its own hands made EU-Russian relations hostage to the irresponsible games of the Ukrainian authorities," it said in a statement.

The sanctions, as well as Moscow's own embargo, have impacted the Russian economy, with the embargo pushing food prices up and quality down, but also giving a boost for some domestic producers.

The sanctions have been controversial from the start, with EU member states such as Germany, Italy and Hungary fearful of getting locked in a damaging stand-off with Russia, a major political and economic partner.

Other member states, such as Britain, have taken a harder line, insisting that Russia's intervention in Ukraine and its 2014 annexation of Crimea are a serious breach of international law and cannot go unpunished.

But there are questions about how long the sanctions will now last following Britain's shock vote to leave the EU in a referendum last week.

France has also been pushing for a "real debate" over the future of the sanctions while Germany's foreign minister has said the EU should consider a step-by-step relaxation of the measures.

The EU in June rolled over for another year to June 2017 separate sanctions imposed after Russia's March 2014 annexation of Crimea from Ukraine.

The EU has also imposed a separate set of visa ban and asset freeze measures against individual Russian and Ukrainian figures for backing the separatist cause in early 2014. These measures run until September.