Russia had been under EU and US sanctions as a result of its involvement in Ukraine. But sanctions are also damaging European economies as well. The sanctions against Moscow and slumping oil prices led to the sluggish of Russian economy and the sinking of its currency. The rubble lost about half its value and the Russian economy has descended into recession.

Sanctions target Russian banks and oil companies and have banned arms exports and export of dual-use goods and will be in place till July 2015. German Chancellor Angela Merkel`s spokesman Stephen Seibert was quoted by Associated Press in mid October 2014 saying that the sanctions are in response to concrete situations from Russian side and concrete situations in eastern Ukraine.

Russia has responded to the EU sanctions by imposing retaliatory measures against Europe's biggest companies in different domains such as banks, oil companies, machinery makers and food giants that do business in Russia.

According to Associated Press reports, western sanctions have hurt European companies that do business in or with Russia. The report indicates that some Russian clients can no longer pay them because they are going into debts or payments are blocked in sanctions-hit banks. Additionally demand has dried up because Russians are struggling financially.

This crisis is adding up to European countries economic woes. “Deflation in the euro zone is all too close and extremely dangerous” according to The Economist report in late October last year.

The Economist reported that the zone`s overall inflation rate has slipped to 0.3% and may well go into outright decline in 2015. It further pointed out that the region that makes up almost a fifth of world output is marching towards stagnation and deflation.

Although Russia's economy has descended into recession as a result of EU sanctions, Russian authorities made sure that European economies also suffer in consequence. Associated Press reported that Moscow has imposed a one year ban on imports on a range of food produced by EU countries, hitting Lithuanian dairy farmers, Italian cheese makers and Belgian apple growers alike.

However some EU member countries such as France and Italy would like to lift the sanctions against Russia while Poland, Britain and the Baltic countries want to maintain them. Zsolt Darvas, a senior fellow at Bruegel think tank in Brussels pointed out this position to the Associated Press.

Russia was condemned by the European Union over its annexation of Crimea peninsula, a region that belonged to Ukraine since 1954 after the World War II. Russia annexed Crimea peninsula last March directly after the ousting of pro-Russian President Viktor Yanukovych. Moscow was accused by the EU and the US of supplying pro-Russian separatists in Eastern Ukraine with ammunition and combatants.

Talks on lifting the sanctions are scheduled on January 15 in Astana, Kazakhstan. Before the beginning of the meeting, France and Germany said that western sanctions against Russia had reached their limits and could only make things worse as reported by a EurActiv.com news report.

Apparently sanctions are hurting both sides of the conflict. But it won`t be easy to lift them as it will require a unanimous decision by all 28 EU nations. Unfortunately they are divided on this matter according to the Associated Press report by David Rising, John Thor Dahlburg and Raf Casert.