BRUSSELS (Reuters) - European Union leaders agreed on Thursday to extend economic sanctions against Russia over the turmoil in Ukraine until mid-2017, though some wanted a longer timespan over fear U.S. President-elect Donald Trump would ease pressure on Moscow.

A billboard with a portrait of Russian President Vladimir Putin is displayed on a street in Kerch, Crimea, April 7, 2016. The board reads: "Crimea. Russia. Forever." REUTERS/Andrew Osborn/File Photo

The decision was expected and the formal process to extend the sanctions on Russia’s defense, energy and financial sectors will take place early next week.

“Some of our colleagues would prefer maybe 12 months but ... what is possible is maintaining our current format, it means six months,” European Council President Donald Tusk said.

The bloc slapped sanctions on Russia after it annexed Ukraine’s Black Sea peninsula of Crimea from Ukraine in 2014 and stepped them up as Moscow went on to support a separatist rebellion in Ukraine’s industrial east.

It has extended them by six months each time ever since as Moscow says it would never give back Crimea and the conflict in east Ukraine - which has killed 10,000 people to date - is not resolved despite peace mediation by Germany and France.

Ukraine’s President Petro Poroshenko welcomed the decision: “I am sincerely grateful for unwavering unity and solidarity of the European leaders in restoring Ukraine’s sovereignty and territorial integrity, including Crimea.”

THE TRUMP EFFECT

Poland was among the EU states that wanted a longer extension of the sanctions, but Italy has been a leading voice in the bloc in calling for re-establishing business ties with Moscow.

The decision was also meant as a signal to Trump, who takes office on Jan. 20 and has worried the EU with his promises to seek a rapprochement with Russia.

“It would send a very bad signal vis-a-vis Trump if we shied away from this extension, or prolonged them by a shorter period of time,” a senior EU official said.

But in front of cameras, EU leaders were more cautious, with German Chancellor Angela Merkel saying the extension was agreed “based on the current situation” rather than attempts to “anticipate what the new American president might do.”

Related Coverage Some EU states wanted longer Russia sanctions ahead of Trump

“It’s still too early to assess responsibly what is the possible policy of the new american administration on Russia,” said Tusk.

Despite threats in October by some EU leaders, the bloc has shied away from slapping new sanctions on Russia over the conflict in Syria.

In a separate decision on Thursday, EU leaders agreed to spell out limits to a landmark cooperation accord with Ukraine in order to address Dutch concerns and prevent the deal from falling through.</s>Europe has extended economic sanctions on Russia for another six months, despite indications that President-elect Donald Trump could try to repair ties with Moscow.

The decision was confirmed by European Council President Donald Tusk, who said that some European Union member states had pushed for a longer 12-month extension of the punitive measures.

"Some of our colleagues would prefer maybe 12 months," he said. "But it was clear from the very beginning that what was possible is to maintain our current format ... for six months."

The U.S. and EU both imposed sanctions on Russia after it annexed Crimea from Ukraine in 2014. The EU restricted travel and froze the assets of nearly 150 people over the conflict. It also imposed restrictions on strategic sectors of Russia's shrinking economy: banks, energy firms and defense contractors.

"I am sincerely grateful for unwavering unity and solidarity of the European leaders in restoring Ukraine's sovereignty and territorial integrity, including Crimea," he said in a statement.

At the height of the Ukraine crisis, a Malaysia Airlines flight was brought down by a Russian missile fired from territory controlled by pro-Russian separatists. Relations between Russia and the West hit their lowest ebb for decades.

Trump has vowed to reset ties with Moscow and has made no secret of his admiration for President Vladimir Putin. He's also denied that the Kremlin hacked the 2016 election, putting him at odds with many in his own party, and the U.S. intelligence establishment.

Related: The good, bad and ugly of warmer US-Russia relations

The nomination of Rex Tillerson to lead the U.S. State Department is being read as another sign of a sharp shift in U.S. policy toward Moscow. The ExxonMobil (XOM) CEO has good relationships with senior Russian officials including Putin, and he is on the record as opposing sanctions.

An improved relationship with Russia might require the U.S. to acquiesce to the Kremlin's annexation of Crimea, and lift sanctions on top Russian officials.

But that would be relatively easy: Trump could cancel sanctions, without consulting Europe, with the stroke of a pen since they were mandated by President Obama in a series of executive orders.

Related: Tillerson shared stage with Russian official under U.S. sanctions

EU Council President Tusk said it was "still to early" to assess the incoming administration's policies.

"We have too many signals ... we have to wait for formal declaration of the new president," he said.</s>The decision was expected and the formal process to extend the sanctions on Russia's defense, energy and financial sectors will take place early next week, they said.

The bloc slapped sanctions on Russia after it annexed Ukraine's Black Sea peninsula of Crimea from Ukraine in 2014 and stepped them up as Moscow went on to support a separatist rebellion in Ukraine's industrial east.

The conflict is still not resolved and has killed nearly 10,000 people to date.

Poland was among the EU states who wanted a longer extension of the sanctions but Italy, a leading voice in the bloc, argued for seeking ways to reestablish business ties with Moscow.

Despite threats in October by some EU leaders, the bloc has shied away from slapping new sanctions on Russia over the conflict in Syria.</s>EU leaders agreed to extend sanctions against Russia for a further six months in response to Moscow’s incursion into Ukraine and Crimea, but refrained from sanctioning Moscow directly over actions in Syria.

As the evacuation of the Syrian city of Aleppo commenced on Thursday, leaders meeting in Brussels agreed to roll over sanctions against Russian individuals and entities connected with Ukraine and Crimea which have been in place since 2014.

However, they did not endorse sanctions against Russians linked to its involvement in the Syrian war, though a joint communique agreed by leaders said that “all available options” over Syria were on the table.

Denmark and Sweden were among the countries pushing for more sanctions to be imposed ahead of the meeting. Sweden’s prime minister Stefan Lofven said he was “prepared to push for sanctions also going forward given what’s happening in Syria”.

His Danish counterpart, Lars Lokke Rasmussen, said that while he was not sure that “more sanctions will be the step that makes a difference right now . . . one has to be ready to do so”.

France, meanwhile, accused Russia of making “commitments that it is not keeping”. “We can’t leave women, men and children to suffer bombing, have their safety threatened, be taken by force and treated in such an undignified manner,” said French president Francois Hollande on arrival in Brussels. “The regimes that support [Syrian president] Bashar Assad will have to take responsibility for this extremely serious situation.”

In response to the developments in Aleppo, EU leaders called for the “safety and dignity” of inhabitants to be ensured during the evacuation process.

Nato envoys will meet with Russian representatives on Monday, Nato secretary general Jens Stoltenberg said, amid ongoing concern about the situation in Aleppo and ongoing conflict in Ukraine.

Leaders also broke a deadlock over the ratification of an EU-Ukraine association agreement which had been delayed following its rejection by Dutch voters in a referendum in April.

In a concession to the Netherlands, leaders agreed to add an annex to the agreement stating that the pact “does not confer on Ukraine the status of a candidate country for accession to the union, nor does it constitute a commitment to confer such status to Ukraine in the future.”

It also clarified that the agreement does not grant Ukrainian nationals the right to reside and work freely in the European Union, while also ruling out any obligation on the EU to “provide collective security guarantees or other military aid or assistance to Ukraine”.

While Dutch prime minister Mark Rutte will now bring the agreement to parliament, he said that securing agreement would not be easy.

“I have made the assessment that if we make a good deal that I would have a fighting chance to get it through parliament,” Mr Rutte said after the discussion on the trade deal. “But that remains to be seen, it won’t be easy.”

Also on the agenda at the one-day summit, which overran by several hours, was a discussion on EU defence policy, with the bloc pledging to beef up the union’s defence capabilities, and enhance co-operation between the EU and Nato, a potentially sensitive issue for non-Nato members such as Ireland.

France and Germany have been leading calls for a stronger EU defence and security policy in the wake of terrorist attacks over the last year and concerns about Russian aggression.

The leaders also reiterated their commitment to the EU-Turkey migration pact which was signed in March and is credited with reducing the number of migrants arriving through Turkey.

The status of Turkey’s accession negotiations with the EU remains a contentious subject for some member states in light of the widespread crackdown on suspected dissidents in Turkey since the failed coup in July.</s>Ukraine to US: We warned you about Russia</s>BRUSSELS: The shadows of Russia and Brexit loom over a “minefield” summit of European Union leaders in Brussels on Thursday at the end of a tumultuous year for the crisis-hit bloc.

The EU leaders will hold dinner without British Prime Minister Theresa May where they will try to present a united front over how they handle Britain’s departure from the bloc.

They are also expected to rollover sanctions against Moscow over the conflict in Ukraine for another six months, but are unlikely to impose any new measures in response to the carnage in Aleppo.

They will further hold crisis talks about a pact with Ukraine that the Netherlands has threatened to torpedo if the EU refuses to offer guarantees against further integration for Kiev.

“We are treading on a minefield, there are so many issues on the agenda that still can go wrong,” warned a senior EU European Union official.

The one-day summit, cut back from the usual two days, wraps up an annus horribilis for the bloc that has seen it face a wave of populism including the shock Brexit referendum vote.

The thorniest issue on Thursday could be Netherlands Prime Minister Mark Rutte’s efforts to negotiate a way past a referendum in April in which his country voted against a key EU-Ukraine pact.

The Netherlands is the only one of the 28 EU states that has not ratified the deal so far, and Rutte wants vows that the pact is not a first step towards EU membership for Ukraine, and that it will not provide defence guarantees to Kiev.

“Failure of the ratification would be a huge defeat for the EU, Ukraine, a victory for Russia,” the senior EU official said.

Agreement will for once be far easier on the EU’s stiff economic sanctions against Russia over the war in Ukraine, which were imposed in 2014 after the shooting down of Malaysia Airlines flight MH17.

German Chancellor Angela Merkel and French President Francois Hollande will debrief leaders after which “I expect that there will be a consensus” on a six-month rollover, a German government official said.

The rollover is expected despite little appetite among some countries, and fears that US President-elect Donald Trump is set to take take a much softer line on Moscow amid signs of rapprochement with Vladimir Putin.

The EU leaders are however set to stop short of threatening any new sanctions against Russia over the violence in Syria’s Aleppo, where the army has seized nearly all the ravaged city.

The leaders will say in a statement obtained by AFP that the EU “strongly condemns” the assault by the “Syrian regime and its allies, notably Russia” and calls on them to allow aid in to Aleppo.

But they will go little further than they did at their last summit in October when they were equally divided, saying only in a draft statement obtained by AFP that “the EU is considering all available options.”

Britain’s May will then leave the summit while the other 27 discuss the process for dealing with Britain’s departure once May triggers the two-year divorce process, which she has promised to do by the end of March 2017.

They will issue a statement saying they agree to launch talks as quickly as possible after she does so.

The 27 will also agree that the European Commission will lead the talks, under French chief Brexit negotiator Michel Barnier, but that the European Council of member states must also be involved in the talks.

But that has prompted an angry response from European Parliament chief Martin Schulz, who warned that MEPs could reject any deal with “grave consequences” unless they are also included.

At the moment MEPs must approve any deal but will not be represented in the talks.

The EU 27 have refused all negotiations with Britain until the process begins, while warning that May is likely to have only a short window until October 2018 to broker a deal.

Brexit minister David Davis said Wednesday a transitional deal to cover the period after the two years before a full trade agreement is reached was possible “if necessary.” AFP</s>If there’s one thing Republicans and Democrats have agreed on in foreign policy, it is the power of sanctions. But Donald Trump’s choice for secretary of state has seen things differently.

Exxon Mobil CEO Rex Tillerson, who has said he has a close relationship with Russian President Vladimir Putin, opposed the sanctions levied on Moscow for its annexation of Ukraine’s Crimean Peninsula in 2014. They cost the company hundreds of millions of dollars.

At his company’s 2014 annual meeting, Tillerson stated flatly: “We do not support sanctions, generally, because we don’t find them to be effective unless they are very well implemented comprehensibly and that’s a very hard thing to do.”

In Washington, both parties have supported sanctions against foreign governments, including sanctions that pressured Iran into nuclear concessions and pushed Myanmar to make democratic reforms.

It’s not clear if Tillerson’s view will change if he shifts from representing a $350 billion multinational company to becoming America’s top diplomat. His position seems to put him at odds with Trump, who has favored some sanctions.

Tillerson likely will be grilled about his views on sanctions at his Senate confirmation hearings, where he’ll also face questions about his relationship with Putin.

Trump has made clear he wants to avoid U.S. military interventions like those in Libya or Iraq. With sanctions off the table as well, he would not have many tools left to carry out his plans to “make American safe and respected again.”

A look at the use of sanctions and Tillerson’s and Trump’s positions:

Sanctions were used most prominently against Iran during President Barack Obama’s presidency. He had bipartisan support for them as an alternative to using military force to prevent Tehran from developing nuclear weapons.

The sanctions hurt Iran. It lost the ability to enter the global financial system and couldn’t transfer currency or collect payments from abroad. Oil sales plummeted. Inflation soared.

In the years that followed, Iran elected a pro-negotiation president and agreed to sharply restrict its nuclear activity in exchange for an end to many sanctions.

To Obama, the sanctions had succeeded. To Trump and fellow Republicans, they were lifted prematurely and traded in for too little in return.

There was greater consensus on the success of sanctions in Myanmar. America’s carrot-and-stick approach pushed the country into democratic transition after decades of domination by a military junta.

In Syria, the U.S. had initial success drying up the reserves of President Bashar Assad’s government as it waged a civil war against rebel groups. Credit from Iran and military support from Russia reversed Assad’s fortunes.

Decades of sanctions failed to force change in Cuba. Obama unilaterally ended some of them. An array of sanctions has failed to end North Korea’s nuclear weapons program.

And after Russia seized Crimea and supported separatist rebels in eastern Crimea, U.S.-led sanctions contributed to Russia’s economic downturn. Moscow has kept control of Crimea, however.

Sanctions create winners and losers, and Exxon was a loser.

Tillerson, who has spoken of his almost two-decade relationship with Putin, saw his company’s stake in a lucrative offshore drilling project with the Russian state oil company Rosneft under threat. He made numerous White House visits, to no avail.

The new U.S. sanctions banned the transfer to Russia of advanced offshore and shale technology, and Exxon was ordered to stop drilling in the Kara Sea, leaving the site’s potential riches untapped. Tillerson’s main partner, Rosneft boss Igor Sechin, was added to a U.S. sanctions blacklist.

Of his lobbying effort against sanctions, Tillerson said “we always encourage the people who are making those decisions to consider the very broad collateral damage of who are they really harming.”

Tillerson has spoken of his desire to see the sanctions lifted, which would benefit him and Exxon. Exxon valued Tillerson’s compensation in 2015 at $27.3 million, most of it in stock, while he held awards worth almost $150 million.

Trump hasn’t shied away from threatening to use sanctions. And he’ll have the power to implement them.

Because of the dollar’s status as the world’s reserve currency, Trump will have broad authority to cut off countries from global financial flows and investment channels at the stroke of a pen. And he will have a Congress eager to assert a role in foreign policy by helping him.

Trump has spoken about hardening sanctions on Iran and potentially reopening talks with Cuba to secure a better deal.

But his biggest test could be Russia, a country with which Trump has said he wants to improve ties.

Russia hasn’t been swayed by sanctions, but they have hurt, largely because of the participation of European countries with significant trade relationships with Russia. That has been largely due to U.S. pressure. But European governments and their companies — including Exxon’s competitors — are growing weary with the campaign. Trump hasn’t said if he will press the matter with the same vigor.

If Trump and Tillerson create a foreign policy without sanctions, they could lack the sticks to advance U.S. interests.

The president-elect repeatedly has expressed his disdain for military action outside of fighting terrorism. He has built a team with little track record in diplomacy. And it’s unclear if the power of his persona will carry weight across borders as he pushes his agenda internationally.</s>German Chancellor Angela Merkel (left), British Prime Minister Theresa May (centre) and President of the European Parliament Martin Schulz attend the European Union Leaders Summit in Brussels, Belgium, on Thursday (Anodolu Agency photo)

BRUSSELS — European Union leaders grappled with Russia and Brexit at a "minefield" summit in Brussels on Thursday at the end of one of the most turbulent years in the bloc's history.

The 28 leaders are dealing with the migration crisis, sanctions against Moscow over the wars in Ukraine and Syria, and a troublesome pact with Kiev that the Netherlands threatens to veto.

British Prime Minister Theresa May will later be left out in the cold while the other 27 have dinner without her in a bid to present a united front over how they handle Britain's departure.

May however dismissed any suggestion that it amounted to a snub and called for as "smooth and orderly a process as possible".

"It is right that the other leaders prepare for those negotiations as we have been preparing," said May, who has promised to trigger the two-year divorce process by the end of March.

Lithuania's "iron lady" President Dalia Grybauskaite meanwhile played down a report that Britain's ambassador to the EU had warned the government that a full post-Brexit trade deal could take 10 years.

"10 years? I hope it will be a lot less," she told reporters.

The one-day summit, cut back from the usual two days, wraps up an “annus horribilis” for the bloc that has seen it face a wave of eurosceptic populism including the shock Brexit referendum vote in June.

"We are treading on a minefield, there are so many issues on the agenda that still can go wrong," warned a senior EU official.

The fate of civilians in Aleppo as Syrian and Russian forces drive out rebels is also on the agenda, although EU leaders will stop short of threatening any new sanctions against Moscow.

EU President Donald Tusk is set to meet Aleppo mayor Brita Hagi Hasan who is in Brussels to push the bloc to support the opening of a humanitarian corridor to evacuate civilians.

The leaders will issue a statement that the EU "strongly condemns" the assault by the "Syrian regime and its allies, notably Russia", but will only say that "the EU is considering all available options," according to a draft seen by AFP.

EU Foreign Policy Chief Federica Mogherini said the leaders were not set to consider sanctions, insisting instead that the bloc would try to use its "influence" with Iran and Russia.

Mogherini is also expected to push plans for increased European defence cooperation in the wake of Brexit and amid fears about US President-elect Donald Trump's commitment to NATO allies.

Agreement will be easier on the EU's stiff economic sanctions against Russia over the war in Ukraine, which were imposed in 2014 after the shooting down of Malaysia Airlines flight MH17.

German Chancellor Angela Merkel and French President Francois Hollande will debrief leaders, after which "I expect that there will be a consensus" on a six-month rollover, a German government official said.

The rollover is expected despite little appetite among some countries and worries that Trump is showing signs of a rapprochement with Vladimir Putin.

The thorniest issue on Thursday could be Dutch Prime Minister Mark Rutte's efforts to negotiate a way past a referendum in April in which his country voted against a key EU-Ukraine pact.

The Netherlands is the only one of the 28 EU states that has not ratified the deal so far, and Rutte wants vows that the pact is not a first step towards EU membership for Ukraine, and that it will not provide defence guarantees to Kiev.

"Failure of the ratification would be a huge defeat for the EU, Ukraine, a victory for Russia," the senior EU official said.

In the evening, Brexit but not May will return to the table, with the EU 27 expected to highlight their unity in a statement saying they agree to launch talks as quickly as possible after she does so.

But nothing is simple with the EU and the issue has already sparked a turf war in Brussels.

The European Commission, the EU's executive, is set to lead the talks but European Parliament chief Martin Schulz warned bluntly of "grave consequences" for any deal, which could even be rejected if MEPs are not included in the process.</s>EU leaders gather in Brussels for their final summit of the year facing an array of challenges described by one senior EU official as a “minefield of issues”.

Ukraine, migration, and the ongoing civil war in Syria are among the topics to be discussed at the one-day summit which begins at lunchtime on Thursday.

Leaders of the so-called EU27 will meet again in the evening, without Britain, to discuss the bloc’s Brexit strategy, though no specific details of negotiating positions are expected to be disclosed.

With the battle for Aleppo still raging on the eve of the summit, EU leaders are expected to roll-over sanctions against Russia which fall due for renewal in January. Though technically linked to Russia’s implementation of the Minsk agreement which sets out a peace plan for Ukraine, the EU’s sanctions are viewed by many in the bloc in the context of Russia’s actions in Syria.

German chancellor Angela Merkel and French president Francois Hollande are due to update their EU counterparts on the latest progress on the Minsk agreement and the situation in Syria.

Officials in Berlin on Wednesday said that Germany expected EU measures against Russia to be renewed for at least another six months and does not expect any “surprises”, such as new sanctions on Syria.

“I don’t see that it will come to a sanctions agreement,” said a senior Berlin official. “This is not a topic that has been prepared for three weeks at technical level but, due to the perpetually changing situation, is more something that will be discussed at leader level.”

However the official insisted that international diplomacy and foreign policy is “not just about imposing or not imposing sanctions”.

Dr Merkel spoke to Russian president Vladimir Putin by phone on Tuesday.

Less than 24 hours before the summit begins, EU officials were also scrambling to save an EU-Ukraine association agreement, following the defeat of a referendum on the agreement in March in the Netherlands.

EU officials said they were hopeful that a compromise agreement could be reached between the Netherlands and the remaining 27 member states that would allow the Dutch government to ratify the agreement ahead of Thursday’s summit.

Officials stressed that, while the EU-Ukraine association agreement was an important commitment by the EU to further links with Ukraine, it did not grant Ukraine candidate status to become a member of the European Union.

The Netherlands has been demanding legally-binding assurances from Brussels that the agreement will not commit the EU to opening membership talks with Ukraine or commit the EU to providing defence assistance to the country. But Ukraine is becoming increasingly frustrated that a commitment to grant visa-free access to Ukrainian citizens to the EU has not yet been ratified.

Also on the agenda is a discussion on the EU defence policy, and a proposal for stronger co-operation between the EU and Nato, amid recent calls from member states for the EU to strengthen its defence capabilities.

In his letter to EU leaders ahead of Thursday’s summit, European Council president Donald Tusk said Europeans “must take greater responsibility” for defence. “Our aim is clear: to strengthen Europe’s security in a challenging geopolitical environment, and to better protect our citizens. We need to give a strong, political impetus on key issues, in order to invest more and cooperate better amongst ourselves and with our partners.”

Speaking in Berlin on Wednesday, German officials stressed the need to focus on short-term priorities for EU defence co-operation, such as boosting military spending, equipment and training. “We have made more progress on this front, more than many people would have imagined even recently,” said a senior Berlin official of the recent Franco-German push.

They said while it was important to take into account concerns of non-Nato member states, that consideration worked both ways.

“Whoever wants to participate should, and those who don’t want to participate shouldn’t hold up those who do,” said one senior official.</s>Over the past week, Ukraine's Finance and Defence ministries and State Treasury said their websites had been temporarily downed by attacks aimed at disrupting their operations.

"These attacks were planned in advance and coordinated from a center based in the Russian Federation," the secretary of Ukraine's National Security and Defence Council, Oleksander Turchynov, said.

At the end of 2015, the council blamed Russia for a cyber attack on its power grid that left part of western Ukraine temporarily without electricity.

Cyber security experts consider Russia one of the world's most advanced cyber powers, along with the United States, China, Israel, France and Britain.

Bratislava-based computer security company ESET said it believed the recent attacks on the ministries were attempted "cybersabotage" and likely carried out by the same group that targeted Ukraine's power grid last year.

Relations between Kiev and the Kremlin collapsed in 2014 following Moscow's annexation of Crimea and support for pro-Russian separatists in eastern Ukraine, where fighting continues despite a ceasefire agreement.

As a result of the recent cyber attacks, Ukraine's security council will discuss how best to strengthen cyber security, particularly in relation to potential actions from Russia, Turchynov said.

"A decision will be taken detailing a plan of action to increase the level of cyber defence," he said.
The European Union extends its main Ukraine-related economic sanctions against Russia for six months until mid-2017.