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“Europe must stand together on Russia”

05 May, 2014

 * Merkel supports more active EU role in Cyprus talks * 

German Chancellor Angela Merkel has called on Europe to lay aside its differences and stand together on further sanctions against Russia over the crisis in Ukraine and Crimea, despite concerns and hesitation expressed by smaller nations such as Cyprus.
“It’s important that all European Union member states send the same message to Russia,” Merkel said at a joint press conference in Berlin Tuesday with Cypriot President Nikos Anastasiades.
Merkel expressed confidence that the EU remained “capable of acting” despite differences among the EU’s 28 member states on when and if sanctions against Moscow should be stepped up. "We are ready to do so in an emergency," she said.
The chancellor also criticised Russia’s plans to hold a military parade in Crimea on May 9 to mark the 69th anniversary of the end of the Second World War, saying: "I find it a shame if such a day is used to hold a parade during such a conflict."
Russian media reports have suggested that President Vladimir Putin might also attend a parade in the Crimean port city of Sevastopol.
However, Anastasiades was reserved in imposing all-out sanctions on trade partner Russia, saying that the EU must allow each of its member-states the freedom to choose separately, without ignoring the EU policies, the measures which will not create situations that aggravate the economy of their own country.
The President added that, nevertheless, “this does not mean that certain sanctions should not be taken into consideration if they are necessary. There should simply be the tactful practices of each member-state.”
“Therefore, we should show our capacity to take action, but also we should be aware of the consequences,” she added, pointing out the issue of further sanctions against Russia does not only concerns Cyprus but other six EU – member states whose energy supply depend by 100% from Russia.
On the issue of confidence building measures to help restart the Cyprus peace talks, including opening the ghost town of Famagusta, Merkel said that “for success on the Cyprus issue and the negotiations on the Cyprus issue it is important that the EU undertakes an active role.”
She added that the confidence-building measures will be helpful and “obviously can contribute to the better conduct of the negotiations.”

AID FOR SMES

Referring to the Cypriot economy, Merkel praised the Cypriot government`s determination to implement the reforms included in the 10 bln euro financial assistance package it received from the EU and the IMF in March 2013, but acknowledged the problems that emerged especially to the small and medium sized companies due to the continued economic contraction and the lack of credit.
The German Chancellor also announced financial assistance to help small and medium-sized enterprises. Germany was also prepared to further administrative technical assistance if this is desired, Merkel said.
Similar grants, including the state development bank KfW is also available for other crisis countries in the euro zone, she said.
For example, the Spanish development bank ICO has received a global loan from KfW, which is secured by a guarantee from the federal government. In Greece, there is a support fund, to be supported through the small and medium enterprises by favorable financing conditions.
“For that reason Germany wants to help,” she said adding that the Finance Ministers of the two countries have engaged in discussions over the details of a SME support programme, similar to the ones Germany concluded with other countries under programme.
Rating agencies, as well as the Troika of international lenders have suggested that a possible crisis between the EU and Moscow could derail the recovery of the Cypriot economy, as the island has strong business and financial ties with Russia.
“I would like to remind that Cyprus is under a financial adjustment programme and has proved that it could recover but possible strict sanctions without considering the damages or the consequences would likely inflict a crucial blow to our efforts,” Anastasiades said.
Finance Minister Harris Georgiades, Government Spokesman Nicos Christodoulides and Cyprus Ambassador to Germany Minas Hadjimichael accompanied Anastasiades during the meeting.

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