The European Union is expanding sanctions against Russia as reports of new fighting in Ukraine threaten a fragile cease-fire agreement. The new measures are expected to go into effect in the coming days if the cease-fire fails to hold.
EU officials say the latest sanctions are reversible, depending on Moscow’s next moves on Ukraine – notably in finding a resolution to the conflict.
But European Policy Center analyst Paul Ivan said possibly the most significant measure targets several top Russian oil producers and pipeline operators. It would bar them from raising capital and borrowing on European markets.
“Some of them have also been sanctioned by the U.S. From this point of view, it is a bit of Europe catching up with what the United States has been doing,” said Ivan. “It would just increase the costs. It will not be possible to expand some projects.”
The new EU measures also expand visa bans and asset freezes on Russian companies and individuals, as well as some Ukrainian separatists.
The latest sanctions add to those Europe and the United States already have imposed on Moscow, which is accused of sending troops and weapons to support the insurgency in Ukraine.
Russia denies these accusations. Prime Minister Dmitry Medvedev has warned that Moscow will respond to the new penalties by barring European airlines from flying over Russia. Analysts say that retaliation could hurt Europe and Russia, which receives revenue for the flights.
While the EU measures may deliver a further blow to Russia’s shaky economy, analyst Ivan is skeptical about their overall impact on Russia and its president, Vladimir Putin.
“The Russian economy can enter into recession. It can contract. But the Russians have a very high threshold for pain,” he said. Putin’s “popularity would decrease a bit, but I would say not enough to actually provoke a change in policy.”
(Photo: Päivi Tiittanen)