By Roman Orsini
The European Union unveiled economic sanctions against Russia in response to Russian military intervention in Ukraine on Friday, Sept. 12. The sanctions target Russian energy and defense firms, arriving in the wake of a fragile truce between the Ukrainian government and separatist militias operating in the East of the country.
According to a statement released by the European Council, “The sanctions aim at promoting a change of course in Russia’s actions destabilizing eastern Ukraine.”
Russia’s annexation of Crimea, the shooting-down of flight MH-17 and the presence of Russian soldiers on Ukrainian soil have all prompted this action.
Sanctions will bar several Russian state-owned energy and defense firms from financing debt in European markets, making it difficult to borrow the funds necessary to sustain an offensive. Russian officials with roles in the Ukrainian crisis will also be banned from the E.U. and face asset freezes.
European leaders will continue to monitor the situation in Ukraine to determine whether or not sanctions should be lifted or expanded. If the recent ceasefire agreement holds, without continued Russian intervention, the sanctions could be scaled back.
“We have always stressed the reversibility and scalability of our restrictive measures,” E.U. President Herman Van Rompuy said. “If the situation on the ground so warrants, the Commission and the EEAS (European External Action Service) are invited to put forward proposals to amend, suspend or repeal the set of sanctions in force.”
Russia has been quick to condemn the E.U.’s actions, as well as prepare sanctions of its own. The import of European cars and other consumer goods to Russia are expected to be capped. There is also concern that Russia may begin cutting its energy exports to reliant European countries. Already, Poland says it received 45 percent less natural gas than it expected to have delivered, according to the Polish Oil & Gas Company.
The European Union and Russia are significant trading partners. A tit-for-tat exchange of sanctions has the potential to harm both of their economies. In 2012, the E.U.’s imports from Russia were valued at 215 billion euros, according to the European Commission. By contrast, U.S. imports from Russia that year were a mere 10th as much.
The U.S. has already imposed sanctions targeting the Russian economy and has been a strong critic of Moscow’s actions from the onset. However, the latest round of European sanctions represent a ratcheting up of the confrontation between Russia and western countries, where Europe stands to lose more than the U.S.
In a statement, the Russian foreign ministry warned of such hazards: “Today, Brussels and the leaders of the E.U. nations need to give a clear answer to E.U. citizens as to why they are putting them under the risks of confrontation, economic stagnation and unemployment.”