"We must restore trust inside Europe and move away from a system of sanctions to a system of motivation," Sebastian Kurz told Der Spiegel magazine in an interview published Friday.
Kurz, the incoming OSCE chairperson-in-office, linked the need to ease sanctions on Russia to progress in eastern Ukraine, where government forces have been locked in a fight with pro-independence militias since 2014.
"With each positive development [in Ukraine] we must ease sanctions step by step," Kurz said, adding the Ukraine conflict had returned Cold-War era thinking in terms of blocs that needed to change.
The European Union accused Russia of sending troops to help militia in southeast Ukraine and imposed rounds of individual and economic restrictions on it in spring and summer 2014. Moscow has denied its involvement in the conflict.