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Over the past two years, Burma has been emerging from 50 years of brutal military rule at a breathtaking pace. The country has made some impressive and unprecedented changes, including the release of many political prisoners, the rolling back of censorship and the lifting of restrictions to allow opposition political parties, including Aung San Suu Kyi's National League for Democracy, to stand for election for a modest number of seats in the military-laden parliament.

However, it is far too early to say whether Burma will continue to make progress, stall, or even fall back into a vicious circle of ethnic and sectarian violence that derails the efforts of reformers and empowers vested interests in the army. In fact, some of the most important signs are currently pointing in a distressing direction.

Despite such signs, the European Union recently scrapped nearly all of its sanctions on Burma. It was a serious mistake and sends the wrong message at the wrong time.

The grim fact is that Burmese authorities and local groups have engaged in a campaign of ethnic cleansing against the country's Rohingya Muslims that has left that community devastated. Though many of the massacres occurred last year, the campaign continues to this day through the denial of aid and restrictions on movement for many of the 125,000 Rohingya who have been displaced. With bodies dumped into mass graves and perpetrators of anti-Muslim violence remaining free, this is hardly a time to lift sanctions against the government.

When the EU imposed sanctions in the 1990s and expanded them over the years, it argued that those targeted were officials and entities involved in abuses. In lifting sanctions, the EU failed to apply the same logic -- that of removing sanctions from those not engaging in serious human rights abuses.

Instead, we see the blanket lifting of the travel bans, asset freezes and trade restrictions for Burmese military officials and their companies without establishing whether these individuals continue to be involved in abuses. Everything apart from an arms embargo is now gone.

Such a move is unlikely to encourage better behavior and accountability for crimes. On the contrary, by prematurely lifting all targeted sanctions, the EU surrendered critical leverage against the government that could have helped Burmese rights activists work for irreversible change.

The downhill slide to this sorry situation began in April of last year, when EU foreign ministers decided to suspend sanctions. At that time, some argued they could be reinstated if the situation in Burma deteriorated. However, after their suspension, the lifting of sanctions seemed a foregone conclusion. Burmese President Thein Sein then toured Europe in March 2013 to press for the sanctions regime to end altogether, and he met a host of gushing European leaders seemingly desperate to claim a foreign policy success and to find a new trading partner at a time of economic crisis.

Undeserved Euphoria

But despite the international praise, many things inside the country have not changed. Burma's abusive military is still involved in perpetrating serious offenses -- including war crimes and crimes against humanity -- with impunity, as evidenced over the past two years in its war with the Kachin Independence Army in Kachin State that has displaced over 80,000 civilians, and its role in stoking and perpetrating crimes against humanity and ethnic cleansing against Rohingya Muslims in Arakan State.

The army still has an official role in governance and enjoys complete immunity from civilian control, justice and any oversight in its affairs. It maintains a bloated budget that crowds out spending to address the massive poverty and social problems caused by its long period of misrule -- a situation recognized by the EU in its decision to retain the arms embargo, a clear indication that it still doesn't trust the army.

While the EU has been caught up in an undeserved euphoria about change in Burma, the country's ethnic and religious minorities suffer. Playing down recent atrocities that just a few years ago would have led to a call for greater penalties, the EU seems to have forgotten that sanctions are a major reason that the army finally caved in to pressure and agreed to a reform process that remains in its early stages. Indeed, the first act of Burma's newly constituted parliament was to demand the lifting of sanctions.

Moving forward, EU member-states are expected to discuss and ultimately agree on a comprehensive policy package vis-à-vis Burma. Part of that package should be a credible threat to reinstate targeted sanctions -- such as visa bans, asset freezes and the prevention of financial transfers by named individuals -- should serious abuses continue with impunity.

If the EU makes that clear, it would aid the reform process by helping Burmese reformers in their internal struggle with hardliners. There is no evidence that the more than 800 individuals and entities previously sanctioned for actively facilitating, aiding and abetting abuses have changed their behavior. Indeed, many of the key companies that were on the EU's sanctions list are military proxies and directly benefit army officials and their cronies.

The EU's rush into lifting sanctions against officials and entities defies a principled explanation. It can't be because the important human rights issues the EU designated as key benchmarks to lift sanctions have been met. These included the complete release of political prisoners. While many have been released, some 240 remain in prison for political offenses.

A second benchmark was an end to army abuses and offensives in ethnic areas. Yet in Kachin State, the army continues to perpetrate abuses against civilians with little restraint from the civilian government.

Another benchmark, unfettered humanitarian access to ethnic conflict zones and areas where over 125,000 displaced Rohingya live in desperate circumstances, has still not been met, while aid workers face systematic obstructions on the delivery of humanitarian assistance. This is despite millions of euros in generous EU aid.

EU Resorts to Euphemisms

Even the highest profile human rights promise has still not been met. In November 2012, President Thein Sein promised US President Barack Obama that he would permit the establishment of a permanent presence of the United Nations Office of the High Commissioner for Human Rights. Thus far, that promise has not been fulfilled and there is no sign that an office will open any time in the foreseeable future. That would have been an easy benchmark for the EU to insist on before weakening its leverage, but sadly, the EU and its 27 member-states ignored this target for improvement just like all the others they set.

Instead, gross human rights abuses are now referred to as "challenges," outcries about continued impunity are replaced with nice phrases about "rule of law commitments," and broken promises concerning cooperation with the UN are ignored. Some diplomats call this "engagement." But real engagement is rewarding improvements while keeping the pressure on to address problems.

While the Burmese government is involved in ethnic cleansing, the EU has shown itself unable to understand the basic elements of a sensible foreign policy, which include both carrots and sticks. The question now is, just how far the Burmese authorities have to go to feel the EU's opprobrium.

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