Merkel says Russia sanctions to remain unless Putin yields; Greece’s prospects ‘better than two years ago’

German Chancellor Angela Merkel said economic sanctions imposed on Russia remain “unavoidable” as long as President Vladimir Putin doesn’t yield on Ukraine.

Merkel defended Ukraine’s right to sovereignty and self- determination in a speech to parliament in Berlin Thursday, hours before she and other European Union leaders planned to discuss Ukraine at a summit in Brussels. While Russia deserves respect and there is no military solution, violations of international law are unacceptable, she said.

“It’s up to Russia to take up our offer of dialogue on the basis of the values of the peaceful European order,” Merkel said. “As long as we haven’t reached this goal, sanctions continue to be unavoidable.”

Russia, which is under EU and U.S. economic sanctions for its encroachment on Ukraine, has spent at least $87 billion, or 17 percent, of its foreign-exchange reserves to try to prevent a collapse in the ruble from spiraling into a panic. German Finance Minister Wolfgang Schaeuble said Wednesday “we can hold out longer” than Russia if Putin doesn’t cooperate.

Merkel’s speech reflected her approach throughout the Ukraine conflict of leaving the door open to talks with Russia while throwing the weight of Germany, Russia’s biggest European trading partner, behind sanctions to put pressure on Putin.

“We’re not letting up in seeking dialogue with Russia,” Merkel said. “The goal is European security with Russia and not against Russia.”

Euro-area woes

In the 18-nation euro area, policy makers haven’t fully vanquished the debt crisis and economic recovery remains fragile, meaning governments need to combat the root causes with economic overhauls, she said.

In Greece, where the crisis began in 2010 before spreading to Ireland, Portugal, Spain and Cyprus, “the prospects are considerably better than two years ago,” though “much remains to be done,” Merkel said.

Germany and France are seeking a joint position on how to finance infrastructure projects across Europe, the topic at the center of the EU summit, she said. Germany wants the European Commission-led program to focus on energy, the digital economy and small and medium-size companies.

“But what’s decisive for me is that it’s companies that create jobs and innovation,” Merkel said. “The focus of efforts must be on mobilizing private capital.”