EU-Russia Relations May Deteriorate, Germany’s Roth Says

Russia’s refusal to back down in Ukraine means “anything is possible” in the crisis, including economic sanctions by the European Union and Russian retaliation, German Deputy Foreign Minister Michael Roth said.

Russia would probably target Europe’s energy supplies, requiring EU countries to provide aid to the member nations that would be most affected, said Roth, who is also the German minister responsible for European affairs.

“I’m not ruling out anything and I think anything is possible right now,” Roth said today in a telephone interview. “Economic sanctions are on the table. We are working tirelessly to keep the EU united and to speak with one voice.” At the same time, Germany is working “with all our might” to avoid reaching for economic sanctions.

Roth’s comments reflect the forces tugging at German Chancellor Angela Merkel as the U.S. ratchets up sanctions on Russia while German industry seeks to preserve economic ties that have grown under President Vladimir Putin. Germany gets about a third of its gas from Russia and is Russia’s biggest European trading partner.

Putin warned yesterday that further economic sanctions in the Ukraine crisis may make Russia reconsider participation by U.S. and EU companies in energy and other key industries. “We really don’t want to take these reciprocal steps,” he said in Minsk, Belarus.

Not Afraid

Merkel, speaking in Berlin today after talks with Japanese Prime Minister Shinzo Abe, said that if current sanctions on Russia don’t work “we should not be afraid that further sanctions are necessary.”

Roth, a member of the Social Democratic Party that is Merkel’s junior coalition partner, said EU governments must assess the economic costs of various types of sanctions on Russia and determine “how we can show solidarity within the EU” to countries that would suffer the most from Russian retaliation.

“Not just Russia, but all of us -- every EU country -- will have to pay a price,” he said. “That’s why we shouldn’t impose economic sanctions lightly.”

To contact the reporter on this story: Birgit Jennen in Berlin at bjennen1@bloomberg.net

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net Tony Czuczka

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