Fears raised over cut in Russian steel quota

Date: 17/02/2000

By Peter Chapman

SOME EU governments have voiced serious doubts about the wisdom of punishing Russia severely for violating a bilateral steel trade agreement.

The warnings came as Union ambassadors were preparing to meet today (17 February) to discuss the European Commission's plan to reduce Russia's quota for steel exports to the EU by 20% in retaliation for Moscow's decision to impose a 15% tax on imports.

The Commission insists that the tax is unjustified and has led to an increase in the market price of one of the European steel industry's main raw materials.

But sources say some member states fear the proposed punishment is far too severe and risks sparking a fierce backlash from Moscow.

Others are concerned, however, that they might appear 'soft' on Russia if they oppose the move while Moscow continues to ignore the EU's demands that it must do more to protect civilians from the effects of the conflict in Chechnya.

Sources suggested this week that one possible solution might be to reduce the planned cut in Russia's steel-export quota by half, to 10%.

Some EU governments have voiced serious doubts about the wisdom of punishing Russia severely for violating a bilateral steel trade agreement.