The European Union moved closer on Monday to imposing tougher sector based sanctions on Russia for arming and transferring military equipment into eastern Ukraine to assist pro-Russian separatists fighting Ukrainian forces for control of eastern Ukraine.
On Tuesday the EU is expected to officially impose a tougher range of sanctions on Moscow that has the ability to hurt Russia’s already weakened economy teetering close to recession levels as large sums of investment dollars have already fled the country and Russia’s central bank raised interest rates for the third time last week to help stabilize the weakened Ruble currency and fight rising inflation.
Defiant Russian President Vladimir Putin brushed off lower level sanctions from western powers after Moscow sent unmarked Russia troops into Crimea and established a referendum vote in March to join Russia that proved to be successful.
But the latest round of sector based sanctions that are currently on the table in the EU would punish Moscow for Russia’s continued support of the separatists movement in Ukraine and would leave a mark on Russia’s 2 trillion dollar economy.
The EU sanctions from Russia’s largest trading partner would place restrictions on Russia’s energy, state controlled banks, and defense sector.
The sanctions limit technology exports that are needed for Russia’s important oil and weapons industries.
The sanctions were brought forward after new reports from western intelligence officials show Russia’s direct involvement transferring arms, equipment, and fighters into eastern Ukraine and stationed large numbers of Russian troops near the border.
The downing of Malaysian Airlines MH17 on July 17th in a separatists controlled region of eastern Ukraine also changed the equation for Western Europe and motivated EU nations to act more decisively since the majority of the deceased plane victims aboard MH17 were Western European, most notably from the Netherlands.
On Monday Prime Minister Cameron of the United Kingdom, President Hollande of France, Chancellor Merkel of Germany, and Prime Minister Renzi of Italy held a video conference with U.S. President Barack Obama.
In a released statement from the White House, the following summary of the video conference was included:
“On Ukraine, the leaders stressed the continued need for unrestricted access to the shoot-down site of Malaysia Airlines Flight 17 to allow for recovery of victims’ remains and for international investigators to proceed with their efforts. They agreed on the importance of coordinated sanctions measures on Russia for its continued transfer of arms, equipment, and fighters into eastern Ukraine, including since the crash, and to press Russia to end its efforts to destabilize the country and instead choose a diplomatic path for resolving the crisis.”
National security adviser Tony Blinken said that European leaders made clear their “determination to act.”
The White House is expected to issue more sanctions on Moscow after President Obama already targeted Russia’s largest companies in banking and energy sectors by denying them access to U.S. capital markets.
Russian Foreign Minister Sergei Lavrov responded to the EU proposed sanctions from Moscow by saying that Russia will endure and become more independent.
“I assure you, we will overcome any difficulties that may arise in certain areas of the economy, and maybe we will become more independent and more confident in our own strength,” Lavrov said.