EU sanctions on Russia could be gradually eased - Finland Foreign Minister

By Sakari Suoninen HELSINKI (Reuters) - The European Union could gradually ease its sanctions on Russia if Moscow works to de-escalate the Ukraine crisis, Finland's foreign minister said in an interview on Friday. Erkki Tuomioja also told Reuters the EU was unlikely to impose more sanctions in retaliation for Russia's food import ban from the EU. He added that he saw little risk of Russia occupying more Ukrainian territory, pointing out that it could have already done so had it wanted to. "Sanctions have been toughened gradually, and they can also be reduced gradually," Tuomioja said in his office in the Marine Barracks, built in the 19th century to house Russian military when Finland was a grand duchy of its eastern neighbour. "I do not believe the EU will respond with more sanctions to Russia's counter sanctions." EU sanctions took effect last week targeting Russia's banking, defence and energy sectors, over Moscow's support for pro-Russian separatist rebels battling Kiev's forces in eastern Ukraine. Russia banned imports of food from the EU in response. The first steps in easing EU sanctions could come before Russia reverses its March annexation of Crimea, provided Moscow takes clear steps to de-escalate the situation, Tuomioja said. He added that it would not be easy to settle the Crimea issue. "Even if other questions are resolved there, it is likely to remain an open wound. Annexation cannot be officially approved." Russia has also shown little interest in serious negotiations, he said. "It takes two to tango, and so far there are no signs of Russia's willingness to dance," the foreign minister said. Tuomioja said a bigger problem for Russia than sanctions, however, was punishment via market forces. Even without a ban on investment, doubts over the country had risen so much that plans would be assessed more carefully. "Russia has made itself less attractive," he said. To defuse the crisis, the EU must now work to find a way to offer the separatists an honourable retreat, he said, including amnesties for everyone except those who have committed war crimes. Western defence alliance NATO has warned of a possible invasion of Ukraine by Russia which, it said, had massed 20,000 troops near the frontier. But Tuomioja said he saw little chance of such a move by Russia. "If they wanted that, they could have done it already." Tuomioja criticised the EU's handling of the recent crises, saying it was not clear who was in charge of Ukraine policy at the EU level and urged it to be more active in getting parties to the negotiating table. "It cannot and should not be that after taking the decisions on sanctions we just sit and watch as the situation deteriorates," he said, adding that that risked having Ukraine become a frozen conflict. Turning to the Gaza crisis, Tuomioja said the EU should be more active and show that it does not find the status quo acceptable, saying Gaza should not remain "an open prison". He said that while Israel had the right to defend itself, it had responded disproportionately to the threat posed by Hamas and the bombing of UN safe shelters had crossed a line. "There are legitimate questions over whether these are war crimes," Tuomioja said. (Editing by Hugh Lawson)