Jul 27, 2017

The Russia sanctions bill Congress loves but Europe hates

AP

House and Senate leaders struck a deal late Wednesday night that would ramp up sanctions against Russia for its meddling in the 2016 election (in a package that also heightened sanctions on Iran and North Korea) while also limiting President Trump's power to nix them.

Where Europe comes in: European allies are concerned that the sanctions against Russia would inadvertently be damaging to their economies as well.

Here's why
  • The bill seeks to strike at the heart of Russia's economic lifeline, which is its sale of oil and natural gas. Oil and natural gas exports pay for half of the Russian state budget, and Russia's biggest customer is Europe.
  • It's not only Russia that is reliant: Europe depends on Russia for about a quarter of its energy supplies.
  • And some of Europe's biggest energy and construction companies have big contracts to build Nordstream 2, an enormous natural gas line under the Baltic Sea that's meant to allow Russia to finally all-but sever its dependence on export lines crossing Ukraine.

And they might retaliate: EU chief executive Jean-Claude Juncker said Wednesday, "If our concerns are not taken into account sufficiently, we stand ready to act appropriately within a matter of days. 'America First' cannot mean that Europe's interests come last." Juncker's warning is a dig at Trump, but...

Trump's hands might be tied: The White House doesn't like the bill either, arguing it limits Trump's abilities to deal with Russia. But he's likely to sign it anyway, given its popularity and the likelihood that lawmakers will have the votes to override a potential veto.

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