France Supports Cancelling Sanctions on Russia

French Finance Minister Emmanuel Macron hinted last week in Moscow that his country would support an end to sanctions when they come up for renewal in July this year."The objective we all share is to be able to lift sanctions next summer because the process has been respected”, Macron French newspaper Le Figaro. For sanctions to beextended beyond July, all members of the EU would have to agree.

Russia’seconomy shrank 3.7 % in 2015, the worst drop since the depths of the global financial crisis, as the country struggled with a drop in the price of its oil exports and international sanctions, the state statistics service said Monday.

The decline is the sharpest for Russia since 2009, when the world economy was suffering from the effects of a credit crunch and financial crisis. It matched the most recent prediction from the IMF, which forecasts another fall of 1 % in 2016 before a return to 1 % growth next year.

The Russian state statistics service also said that last year saw a 10 % drop in retail sales — including a 15.3 % plunge in December against a year before — and a one-third drop in foreign trade.

Oil and gas contribute around half of Russian state revenues and the government has said it will have to make cuts to the budget for 2016, which was adopted in October andbased on an oil price of $50 per barrel.

The European Union and United States introduced economic sanctions against Russian finance and energy firms in July 2014, four months after the annexation of theCrimean peninsula, then an important part of Ukraine along the Black Sea. Russian president Vladimir Putin recently admitted that his government was also providing military support to separatists in eastern Ukraine. A civil war there has left more than 9,000 people dead.

Both Washington and Brussels extended sanctions late last year, with the EU extending for six months in December.

France is keen on getting these sanctions lifted because they believe Russia will return the favor and remove import bans on French dairy goods, which have hurt companies like Danone.

However,the lifting of sanctions is unlikely to have any immediate effect on the Russian economy in the current situation, when the price of oil is the main factor.

(with AP, Reuters)