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EU adopts Russia sanctions as Crimea crisis deepens

Source: Reuters - Mon, 17 Mar 2014 19:31 GMT
Author: Reuters
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* EU does not recognise Crimea referendum result

* EU targets 21 officials from Crimea and Russia

* Further sanctions being considered (Adds sanctions list, comment from Polish and British foreign ministers)

By Adrian Croft and Justyna Pawlak

BRUSSELS, March 17 (Reuters) - The European Union took a cautious approach to imposing sanctions against Moscow on Monday, targeting 21 people in Russia and Crimea while leaving open the possibility of adding harsher economic measures when EU leaders meet later this week.

Those targeted include Russian legislators and military commanders as well as politicians responsible for calling for and organising Sunday's referendum in Crimea, when 97 percent of voters decided the region should secede from Ukraine and join Russia. The EU says the referendum was illegal and does not recognise the result.

"Any further steps by the Russian Federation to destabilise the situation in Ukraine would lead to additional and far-reaching consequences for relations in a broad range of economic areas," EU foreign ministers said in a statement after meeting in Brussels.

Of the 21 people targeted with EU travel bans and asset freezes, 10 were Russian politicians, three were military officials and eight were Ukrainians, mostly from Crimea.

The list included the commander of Russia's Black Sea fleet, Alexander Vitko, and the commanders of Russia's southern and western military districts, which have forces in Crimea, as well as several Russian legislators.

Crimean Prime Minister Sergei Aksyonov, whose election in a closed session of the regional parliament is not recognised by Kiev, was also included.

Czech Foreign Minister Lubomir Zaoralek said earlier that Monday's decisions would be the "first set" and the sanctions list could be widened at an EU summit on Thursday and Friday.

The United States took similar steps on Monday but appeared to target more senior officials in Russia, including two aides to Russian President Vladimir Putin.

MARS AND VENUS

EU diplomats said the difference reflected concerns in Europe over potential consequences for the bloc's economy from any stronger measures, particularly if Russia retaliates.

"These lists are clearly slightly different. But it is easier for the U.S. to take such decisions. First of all, they are further away and any economic consequences are not as painful," Poland's Foreign Minister Radoslaw Sikorski told reporters.

"We have done what we said we could do, but, yes, the U.S. is from Mars, we are from Venus - get used to it."

Sikorski also said the EU should be cautious when deciding to impose any wider trade measures against Russia in the future.

"I would suggest that we are not overly enthusiastic when it comes to introducing sanctions, because we will pay for it."

EU sanctions require unanimity among all 28 member states and several countries, including Greece, Cyprus, Italy, Spain and Portugal, have reservations about moving too quickly.

As a result, Monday's move was not as far-reaching as initially expected. The EU had drawn up a master list of 120-130 names for possible sanctions, which was then whittled down. Some EU governments, including Poland, had pushed for more names on Monday but failed to win sufficient backing.

Highlighting worries in the Baltic region about the economic impact of the crisis, Latvia said the EU should compensate any countries hurt by sanctions against Russia.

British Foreign Secretary William Hague said targeting Putin was not on the cards for now.

"Clearly we are not at that stage," he told reporters. "It is possible to add other figures in the future, depending on how Russia reacts to the referendum in Crimea, which has been a mockery of any real democracy."

LITTLE IMPACT ON GROUND

There are few signs that the threat of sanctions is having an impact on the ground in Crimea or on Russia, although it has unnerved investors.

Officials in Crimea formally applied to join Russia on Monday and the head of the local parliament said Ukrainian military units on the peninsula would be disbanded.

Putin will address a joint session of Russia's parliament on Crimea on Tuesday, when it is possible the secession will be formalised.

If that happens, it is likely the EU will move to the next phase of travel bans and asset freezes as soon as leaders meet on Thursday, with the expanded list of names possibly including senior Russian political and military figures close to Putin.

Even then, it is not clear that Moscow has any intention of backing down or reversing course in Crimea, and there are indications that it could widen its military reach in Russian-speaking parts of eastern Ukraine, too.

The EU has said it will further increase the sanctions pressure if that happens, including imposing much more far-reaching trade and financial restrictions on Russia.

While it would be difficult to secure unanimous agreement within the EU for such a hard-hitting step, it may also be the only measure that would force Russia to reconsider. Wide-ranging financial sanctions would deal a powerful blow to Russian exports and business, while also harming Europe.

At that point, the concern is that the EU becomes locked in a damaging spiral of escalating sanctions and retaliation from Russia, with no one comfortable with where that could lead.

While steadily ratcheting up the sanctions threat, the EU is also urging Russia to negotiate, both directly with Ukraine and by allowing in observers and mediators. (Additional reporting by Jan Strupczewski, Martin Santa, Tom Koerkemeier, Phil Blenkinsop, Barbara Lewis and Luke Baker; Writing by Luke Baker; Editing by Giles Elgood and Robin Pomeroy)

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