James G. Neuger
Bloomberg
September 2, 2008
European Union leaders refused to impose sanctions on Russia over the invasion of Georgia, acknowledging their reliance on Russian oil and gas at a time of faltering economic growth.
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EU leaders took the symbolic step yesterday of suspending talks over expanded trade ties with Russia, fearing that tougher measures would expose the energy-dependent bloc to Russian retaliation.
Russia is the 27-nation bloc’s main supplier of oil and gas and third-biggest trading partner, giving it leverage at a time when the European economy threatens to tip into recession. Europe’s determination to maintain business links also undercuts U.S. efforts to line up allies against the reassertive Russia.
“What, beyond rhetoric, do the Europeans have to offer?” said George Friedman, chief executive of Stratfor, a geopolitical-risk analysis company in Austin, Texas. “How do you have a diplomatic initiative with a group of Europeans whose primary goal is to avoid a confrontation?”
EU governments yesterday put the trade talks, under way since June, on hold until Russia makes good on pledges to end the military occupation of parts of Georgia.
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