As expected, the sanctions -- to be outlined in detail Wednesday -- will target selected sectors of the Russian economy, including energy, finance and defense. New arms deals, exports of energy and oil-drilling technologies, and sales of items with both civilian and military applications will be forbidden.
Access by Russian state-owned banks to Europe's capital markets will also be restricted, which could have a ripple effect throughout the Russian economy. Also, eight more individuals and three more entities will be slapped with travel bans and asset freezes, for a total to date of 95 people and 23 entities.
FOR THE RECORD:
Ukraine: In the July 30 Section A, a photo caption accompanying an article about fighting in Ukraine and new European Union and U.S. sanctions against Russia referred to a Ukrainian city as both Lugansk (using the transliteration from Russian) and Luhansk (from Ukrainian). The Times generally uses Luhansk. —
The new measures represent a significant step up from the EU's previous sanctions against Russia, which had hit only specific individuals and a handful of institutions with travel and asset freezes. Broadening the penalties to target whole sectors of the economy was kept in reserve as a last resort.
Despite U.S. impatience, European leaders had hesitated to slap tougher sanctions on Moscow for fear of harming their own struggling economies. However, their belief that Russian President
"The situation did not leave EU countries with any other option," Finnish Prime Minister Alexander Stubbs said after EU ambassadors, including Finland's, signed off on the new sanctions Tuesday afternoon at a meeting in Brussels.
Though the EU still hoped for a diplomatic solution to the
France, for example, did not want to jeopardize a $1.6-billion deal to supply Moscow with two advanced warships; as a preexisting contract, it will not be affected by the new sanctions. Britain was leery of the effect of capital restrictions on London's freewheeling financial sector. Germany and Italy enjoy strong trading relationships with Russia.
But leaders of all four countries held an unusual video conference call with President Obama and agreed to tighten the screws. Particularly crucial was the support of German Chancellor
In Britain, energy giant
"If further international sanctions are imposed on Rosneft or new sanctions are imposed on Russia or other Russian individuals or entities, this could have an adverse impact on our relationship with and investment in Rosneft," BP said in its semi-annual assessment of risks to its business.
"Furthermore," he added, "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."
Van Rumpuy said Russian action to destabilize Ukraine "will bring heavy costs to its economy. Russia will find itself increasingly isolated by its own actions."