Austrian Chancellor Christian Kern called for a rethink on sanctions imposed on Russia, saying that the regime of penalties over Kremlin-backed incursions in Ukraine has failed to yield enough progress.

Speaking in an interview in Vienna on Thursday, Kern said that the European Union may need to consider new ways to put leverage on President Vladimir Putin to bring more success and be less economically damaging to Europe. At the same time, he said it was important that Europe remains united in its stance.

Asked if he favored a partial lifting of penalties in exchange for progress in adhering to the so-called Minsk peace process, Kern said absolutely.

Austria would be better off, and the concept that we are imposing sanctions and then will come to good conclusions with Russia has not worked out, the chancellor said. I think we need a different concept.

The future of sanctions was thrown into doubt when Donald Trump won the U.S. election promising a reset in relations with Putin. While the new administration has since expressed support for Ukraines territorial integrity, and said that Russia will be held to account, Vice President Mike Pence said this week in Brussels that the U.S. will search in new ways for new common ground with Russia.

Keep up with the best of Bloomberg Politics.

Get our newsletter daily.

Austria is interested in lifting some penalties, according to Kern. But we have to accept that the lifting of sanctions has to go along with the implementation of the Minsk agreement, he said. As long as there is no progress then I know its going to be difficult to lift the sanctions.

For an explanation of why the Ukraine conflict drags on, click here

Its a sensitive issue and we have to stay united. Kern said.

Even so, he pointed out that the economic fallout is hurting the Austrian economy at a time of rising unemployment. The sanctions are really detrimental for our economy -- the costs in Austria are around 0.3 percent of our GDP -- so we are are not so happy about the economic consequences, he said.

Continue reading here:

Austria Calls for Russian Sanctions Rethink to Bring Progress - Bloomberg