EU agrees new sanctions against Russia

Flowers laid out at Amsterdam's Schiphol airport in memory of the victims of the MH17 tragedy. July 26 2014. [Marco Nedermeijer/Flickr]

European Union governments Tuesday evening (29 July) agreed fresh economic sanctions targeting Russia’s oil and defence industries, state-owned banks and sensitive technologies, according to sources.

The EU had previously agreed sanctions against Russia for destabilizing Ukraine but it was spurred to further, broader action after the July 17 downing of the MH17 Malaysia Airlines flight by pro-Russian rebels.All 298 passengers, including 194 Dutch citizens, died in the tragedy, which saw relations with Moscow plummet to their worst since the Cold War.

Western leaders say pro-Russian rebels almost certainly shot the airliner down by mistake with a Russian-supplied surface-to-air missile. Moscow has blamed Kyiv for the tragedy.

The sanctions will last a year but be reviewed in three months. The deal does not require an EU Summit to be approved. Further details are due to come later with the sanctions finalized on Wednesday before being published in the EU Official Journal.

The sanctions include restrictions on access to capital markets for Russian state-owned banks and development finance institutions, diplomats said. Russia is highly dependent on EU capital markets, according to a leaked non-paper, seen by EurActiv, that diplomats used as the basis for the deal.

By targeting banks with more than 50% state ownership, the EU can increase the cost of raising funds and stop them financing the Russian economy. It will also contribute to a climate of market uncertainty, upping the pressure on Russian President Vladimir Putin.

Restrictions on the export of sensitive technology, including in energy and steel production, were mooted in the talks. Russian gas, on which Europe is dependent, is not part of the sanctions.

A restriction on the exports of dual use technologies – that can be used for both military and civilian purposes - was also agreed by diplomats.

An arms embargo will, if finally agreed by a Council of Ministers decision, only apply to future contracts, meaning France would not be stopped from supplying Russia with two battleships.

But there are fears that the sanctions could cut both ways and affect the eurozone's sluggish recovery from the financial crisis.

Russia sanctions threaten to blow eurozone off course on EurActiv

Russia sanctions threaten to blow eurozone off course

More on EurActiv »

Ambassadors also signed off on a list of Putin’s associates and companies that will face asset freezes under previous measures.

US Secretary of State John Kerry reiterated Tuesday that further US sanctions could come against Russia, amid a climate of increasing pressure on the country (read more below).

EU gets deal on list of Putin associates for sanctions on EurActiv

EU gets deal on list of Putin associates for sanctions

More on EurActiv »



Wednesday: Sanctions to be finalised



Jay's picture

On the 100th anniversary of WWI Europe and the United States agree to start a new cold war with Russia. Shall we break out the Champagne now and have a toast all around before Putin rolls out the Iskander-M tactical ballistic missile system? This will most likely involve additional deployments of the system close to Russia’s western borders, Kaliningrad for sure, and the Szczecin military base in northwestern Poland would be within easy reach also.

Patrick Sudlow's picture

Why is the EU targetting Russia, whilst ignoring the hundreds of war crimes committed by Israel? In fact EU countries like the UK and France have continued to supply the Israeli apartheid state with arms, knowing they will be used in war crimes. The EU is acting totally immorally and with hypocracy, when it targets Russia, whilst doing nothing about the illegal occupation of Palestine and the continued bombing of Gaza.

Jay's picture

EU hypocrisy, along with US, has been fueling this Ukraine conflict since day one. If it wasn't for their meddling at least five thousand people would still be alive today.

The EU is going to do what Big Brother across the pond tells them to do. Israel never has for one minute ever considered sharing land with the Palestinians. They have been playing a game of smoke and mirrors for decades.

Gerry's picture

The EU is right to resist Putin's efforts to undermine the Ukraine government. It should however also take the efforts of the east to achieve independence a bit more seriously. However none of this comes even close to the destruction of the state of Iraq by the US and its allies, with results that people there now have to live with every day. George W should have been resisted as much as Putin and the failure to do anything there makes us hypocrites today. In a healthy state of Iraq ISIS would never have taken root or gained any ground.
The Russian expansion into Ukraine is only the result of the western expansion into Ukraine, but now the process has started off there is no turning back, and we will end up with these tit for tat policies. Russia will eventually pull its influence out of Ukraine, but not until it's done maximum damage. East Ukraine will return to the main but with deep resentment, and retain an ongoing need to assert independence.

Jay's picture

Russia will pull out of Ukraine after they have the eastern part safely in their grasp. There is not a damn thing the EU can do to prevent it from happening.

European powers, rocked by the Great Recession and Eurozone crisis, have responded by systematically shedding military force structure and capabilities that were inadequate even before the debt crisis. For many years U.S. officials have complained about Europe’s failure to live up to its defense responsibilities. Of NATO’s 28 member countries, for instance, only a few even come close the alliance’s stated goal of spending 2 percent of gross domestic product on defense, and the NATO average is 1.5 percent. While the United Kingdom, France and Greece almost meet their alliance commitment, other major countries such as Germany, Italy and the Netherlands are perpetual laggards.

I'll tell you face up, if Europe wants Ukraine, let Europe's boys die for it.