US and EU add economic sanctions against Russia

(Vatican Radio) The United States and European Union have approved what they view as dramatically tougher economic sanctions against Russia, including an arms embargo and restrictions on state-owned banks.

U.S. President Barack Obama told reporters that America, backed by the EU, is imposing "new sanctions in "key sectors of the Russian economy, including energy, arms and finance."

He said, "We are blocking the export of specific goods and technology to the Russian energy sector. We are expanding our sanctions to more Russian banks and defense companies. And we are formally suspending credit that encourages exports to Russia and financing for economic development projects in Russia. At the same time the European Union is joining us in imposing major sanctions on Russia, its most significant and wide ranging sanctions to date."

New European penalties include a ban on the unapproved sale to the Russians of technology that has dual military and civilian uses or is particularly sensitive, such as advanced equipment used in deep-sea and Arctic oil drilling. 

The EU also approved an arms embargo, though it would not restrict past agreements, allowing France to go forward with the controversial delivery of two warships to Russia .

 

MONEY MARKETS

Additionally, Russia's access to Europe's money markets will be limited, as EU citizens and banks are expected to be barred from purchasing certain bonds or stocks issued by state-owned Russian banks.

The U.S. and EU say the sanctions are aimed at increasing pressure on Russian President Vladimir Putin to end his country's support for separatists in eastern Ukraine whom the West blames for shooting down Malaysia Airlines passenger jet nearly two weeks ago.

 U.S. officials say sanctions already rippling through Russia are having an impact on the country's economy with growth projections being downgraded. Obama said $100 billion in capital was already expected to flee Russia even before Tuesday's joint U.S.-European announcements.

European Union President Herman Van Rompuy and the president of the European Commission, Jose Manuel Barroso, said the sanctions sent a "strong warning" that Russia's destabilization of Ukraine cannot be tolerated.

"When the violence created spirals out of control and leads to the killing of almost 300 innocent civilians in their flight from the Netherlands to Malaysia, the situation requires urgent and determined response," the two top EU officials said in published remarks. 

PREVENTING INVESTIGATORS

U.S. Secretary of State John Kerry noted that fighting prevented international investigators from reaching the crash site, to find more human remains of the nearly 300 victims. 

“The site has to be cordoned off. The evidence has to be preserved and Russia needs to use its considerable 

influence among separatists in order to be able to help ensure this basic approach of common decency,” Kerry said. He also announced 7 million dollars in American support for rebuilding devastated parts of eastern Ukraine.

However Kyiv has also come under international pressure amid reports that several more people died when shells smashed into a residential of Donetsk as Ukrainian forces intensify their campaign to encircle the rebel stronghold. 

Ukraine's government denies wrongdoing, saying pro-Russian rebels target civilians to discredit the army. And after talk with his American counterpart in Washington, Ukrainian Foreign Minister Pavlo Klimkin said authorities would do more to prevent looting at the crash site. 

“For us it’s a matter of human dignity, it’s about the possibility of recovering all bodies and body fragments of the crash site, it’s about giving back to friends and loved ones any sort of belongings,” he added.

RUSSIA'S DENIAL 

Russia has strongly denied supporting pro-Russian rebels. Besides fighting in Ukraine, American allegations that Russia breached a key cold-war-era arms treaty has added to East-West tensions. The U.S. says Russia violated the 1987 Intermediate Range Nuclear Forces Treaty by testing a new ground-launched cruise missile. 

Russian Foreign Minister Sergey Lavrov and U.S. Secretary of State Kerry have reportedly discussed the issue, but Moscow has so far refused to publicly react to the accusations. 

Listen to the report by Stefan Bos: