EU moves toward sanctions on Russians as Ukraine PM visits Washington
The European Union agreed on a framework on Wednesday (12 March) for its first sanctions on Russia since the Cold War, a stronger response to the Ukraine crisis than many expected, and a mark of solidarity with Washington in the drive to make Moscow pay for seizing Crimea.
US President Barack Obama warned Russia it faced costs from the West unless it changed course in Ukraine, and pledged to "stand with Ukraine" as he met with the country's new prime minister in Washington.
"We will never surrender," Ukrainian Prime Minister Arseny Yatseniuk vowed as he and Obama met in a White House show of support for the embattled leader.
But Obama and Yatseniuk outlined a potential diplomatic opening that could give Russians a greater voice in the disputed Crimean region, where a referendum is scheduled for Sunday on whether it should become part of Russia.
Yatseniuk told a forum in Washington after his White House meeting that his interim government was ready to have a dialogue and negotiations with Russia about Moscow's concerns for the rights of ethnic Russians in Crimea.
Asked what a political solution would look like, Yatseniuk said: "If it is about Crimea, we as the Ukrainian government are willing to start a nationwide dialogue (about) how to increase the rights of (the) autonomous republic of Crimea, starting with taxes and ending with other aspects like language issues."
The EU sanctions, outlined in a document seen by Reuters, would slap travel bans and asset freezes on an as-yet-undecided list of people and firms accused by Brussels of violating the territorial integrity of Ukraine.
German Chancellor Angela Merkel said the measures would be imposed on Monday unless diplomatic progress was made.
A Russian stock index dropped 2.6%, and the central bank was forced to spend $1.5 billion to prop up the rouble, as investors confronted the prospect that Russia could face unexpectedly serious consequences for its plans to annex Crimea.
Russian troops have seized control of the Black Sea peninsula, where separatists have taken over the provincial government and are preparing for Sunday's referendum, which the West calls illegal.
The measures outlined by the EU are similar to steps already announced by Washington, but would have far greater impact because Europe buys most of Russia's oil and gas exports, while the United States is only a minor trade partner. The EU's €335 billion of trade with Russia in 2012 was worth about 10 times that of the United States.
The travel bans and asset freezes could cut members of Russia's elite off from the European cities that provide their second homes, and the European banks that hold their cash.
The fast pace of Russian moves to annex Crimea appears to have galvanised the leaders of a 28-member bloc whose consensus rules often slow down its decisions.
Merkel herself had initially expressed reservations about sanctions, but has been frustrated by Moscow's refusal to form a "contact group" to seek a diplomatic solution over Crimea.
"Almost a week ago, we said that if that wasn't successful within a few days, we'd have to consider a second stage of sanctions," Merkel said. "Six days have gone by since then, and we have to recognise, even though we will continue our efforts to form a contact group, that we haven't made any progress."
But if Russian President Vladimir Putin had expected to be able to seize Crimea without facing any consequences - as he did when he captured parts of tiny Georgia after a war in 2008 - the push toward sanctions suggests he may have miscalculated.
In a statement, the leaders of the G7 – the United States, Britain, France, Germany, Italy, Japan and Canada – called on Russia to stop the referendum from taking place.
"In addition to its impact on the unity, sovereignty and territorial integrity of Ukraine, the annexation of Crimea could have grave implications for the legal order that protects the unity and sovereignty of all states," they said. "Should the Russian Federation take such a step, we will take further action, individually and collectively."
There has been a lot of diplomatic contact between Russia and the West but no breakthrough. Putin spoke on Wednesday to French President Francois Hollande and Swiss Foreign Minister Didier Burkhalter, whose country chairs the Organization for Security and Cooperation in Europe. US Secretary of State John Kerry is due to meet with Russian Foreign Minister Sergei Lavrov in London on Friday.
Russia has pledged to retaliate for any sanctions, but EU leaders seem to be betting that Moscow has more to lose than they do. Merkel's finance minister, Wolfgang Schuble, said any potential impact on Germany's economy was likely to be limited.
While the EU has agreed to wording for its sanctions, it is still working on a target list. Talks took place in London this week between officials from Britain, the United States, Italy, France, Germany, Poland, Switzerland, Turkey and Japan.
"My understanding is that there was detailed discussion of names at the meeting," an EU official said. "No definitive list has been drawn up, but it will be ready by Monday."
European officials have indicated that Putin and Lavrov will not be on the list, in order to keep channels of communication open. The list is expected to focus on targets close to Putin in the security services and the military, as well as lawmakers.
In the past, US and EU sanctions against countries such as Syria, Libya and Iran have started with lists of only around 20 people and companies. But those lists quickly evolved into more powerful weapons as other people and firms were added.
The EU has said it is also prepared to take further steps, such as an arms embargo and other trade measures.
At an extraordinary summit last week (6 March), EU leaders denounced Russia’s “aggression” in Ukraine’s Crimea peninsula and threatened Moscow with sanctions if it did not take steps to “de-escalate” the crisis.
EU Leaders strongly condemned Russia's “unprovoked violation of Ukrainian sovereignty and territorial integrity", and called on Russia to immediately withdraw its armed forces and allow immediate access for international monitors.
Failing to do so, EU leaders threatened Moscow with sanctions, including travel bans and assets freeze, which could potentially hit Russian President Vladimir Putin.
- 17 March: EU foreign ministers meeting to discuss sanctions on Russia
- 20-21 March: EU heads of states and government meet in Brussels