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Merkel sets high bar for lifting of Russia sanctions

[BERLIN] German Chancellor Angela Merkel said on Thursday that Europe could not consider lifting sanctions against Russia until all elements of a 12-point peace agreement signed in September between Ukraine and pro-Russian rebels were fully implemented.

In her clearest comments yet on the sanctions issue, the German leader adopted a more hawkish stance than that set out by senior politicians from her coalition partner, the Social Democrats (SPD), and European leaders like French President Francois Hollande in recent days.

Worried about a deterioration of the Russian economy, they have suggested that progress on the so-called Minsk protocol agreed in September, rather than full implementation, would be sufficient to consider easing the sanctions.

Speaking at a news conference in Berlin with visiting Ukrainian Prime Minister Arseny Yatseniuk, Ms Merkel said she had"little hope" that a first round of sanctions introduced in response to Russia's annexation of Crimea could be lifted.

And she placed a high bar for easing a second round of punitive EU measures tied to Russia's intervention in eastern Ukraine. Moscow denies backing the separatist rebels in the conflict, which has killed more than 4,700 people, despite what Ukraine and Western governments say is overwhelming evidence to the contrary.

"The entire Minsk agreement must be implemented before we can say these sanctions can be lifted," she said, specifically ruling out a step-by-step easing based on progress on the 12 points, which include a ceasefire, monitoring of the Ukraine-Russia border, security zones and the release of hostages.

Top SPD politicians have sounded a more dovish note in recent weeks, with Foreign Minister Frank-Walter Steinmeier expressing concern that Russia could be destabilised if EU sanctions were not eased.

In an interview with Reuters on Wednesday, senior SPD lawmaker Gernot Erler, the government's coordinator for relations with Russia, said Berlin should think about easing sanctions "if we see progress on the 12 points of the Minsk accord".

France's Mr Hollande told French radio on Monday: "I think the sanctions must stop now. They must be lifted if there is progress." EU foreign policy chief Federica Mogherini said on Wednesday there were "some limited" signs that Russia may be changing its approach.

But Ms Merkel made clear that a meeting of leaders from Ukraine, Russia, France and Germany, which had been planned for mid-January in the Kazakh capital of Astana, would only take place if there was progress on the peace front in the coming days.

She also praised Mr Yatseniuk for his government's reform programme, including the austerity budget pushed through in late December. The budget was a condition for the disbursement of cash under an International Monetary Fund (IMF) aid package that totals US$17 billion.

"The prime minister gave a very impressive report on the reforms planned in Ukraine," Ms Merkel said. "It is ambitious, it is determined. And I believe it was a huge success to finalise a budget before Christmas that was anything but easy and that includes a number of new measures."