EU takes aim at Russia economy as Kiev plans Crimea pullout


European leaders prepared on Thursday to debate biting economic sanctions against Russia for its annexation of Crimea as Ukraine tore up key ties with the Kremlin and drew up plans to evacuate its nationals from the rebel peninsula.

The European Union is under intense pressure to find a credible response to an explosive security crisis on the 28-nation bloc’s eastern frontier that NATO chief Anders Fogh Rasmussen on Wednesday called “the gravest threat to European security and stability since the end of the Cold War.”

But the Kremlin has warned that it would strike back hard if confronted with a new wave of Western punitive measures.

German Chancellor Angela Merkel said EU leaders would widen the list of people targeted by travel bans and asset freezes and warned of economic sanctions if Russia took more aggressive steps against Ukraine.

The EU Council “will make clear that we are ready at any time to apply third-phase measures in the event of a further worsening of the situation,” she said ahead of a two-day EU summit starting in Brussels on Thursday.

“It will, without a doubt, be a question of economic sanctions.”

A spokesman for British Prime Minister David Cameron said the leaders would also “consider whether or not Russia should be more permanently suspended from the G-8” club of nations to which it was admitted in 1998 as its reward for choosing a democratic post-Soviet course.

Russian President Vladimir Putin will also find himself on the diplomatic defensive in Moscow when he hosts United Nations Secretary-General Ban Ki-moon amid a chorus of global condemnation of his aggressive Ukrainian approach.

But world anger has done little to halt unchallenged Russian military advances that prompted Kiev’s new Western-backed government to acknowledge preparing a Crimean evacuation plan for thousands of Ukrainian soldiers and their families.

Tensions eased somewhat in the region on Thursday when acting President Oleksandr Turchinov announced the release by Crimean militias of Ukrainian navy chief Sergiy Gayduk.

Turchinov had threatened the Crimean authorities with “an adequate response . . . of a technical and technological nature” unless they immediately freed Gayduk and several others who were captured during the storming of Ukraine’s naval headquarters in the port of Sevastopol on Wednesday.

But Ukrainian lawmakers still adopted an emotional if entirely symbolic declaration saying they “will never cease to fight for the liberation of Crimea as long and painful as this can be.”

The march by Moscow’s troops and pro-Kremlin militias across the mostly Russian-speaking region roughly the size of Belgium has been unhalting since the day Putin first won the right to use force against his ex-Soviet neighbour following the February 22 fall there of a Moscow-backed regime.

Kiev’s untested leaders now fear that Putin has set his sights on the Russified southeastern swathes of Ukraine as part of his self-declared campaign to “protect” compatriots from the more nationalistic forces who rose to power on the back of three months of deadly protests in Kiev.

“There are indications that Russia is braced to unleash a full-blown intervention on Ukraine’s east and south,” Ukraine’s U.N. ambassador Yurii Klymenko told reporters in Geneva.

Russia’s Federal Customs Service stepped up the pressure on Thursday by announcing tougher and more time-consuming inspections of goods entering the country from Ukraine that it said were aimed at intercepting possible illicit shipments of arms.

Kiev has responded by seeking protection from Western powers and plans on Friday to sign the political portion of a broad EU Association Agreement whose rejection in November by Ukraine’s pro-Kremlin president Viktor Yanukovych sparked the protests that led to his fall.

Ukraine has also announced plans to withdraw from the Moscow-led Commonwealth of Independent States (CIS) alliance that replaced the Soviet Union and to slap visas on Russians who sought entry to their country.

EU leaders have already suspended talks on easing visa requirement for Russian travelers into Europe — an issue that Moscow has lobbied for for years — and slapped travel bans and asset freezes on 21 Russians and Ukrainians considered culpable for the Crimean swoop.

But the measures covered a much lower rank of officials than the punitive steps announced by Washington against 11 Russians and Ukrainians.

Those included Yanukovych and some key Putin allies.

Germany appeared set to pursue a more forceful push against Russia by on Wednesday announcing the suspension of a major arms deal with Moscow.

But France resisted pressure to make a similar gesture, saying on Thursday that it was putting off a decision on whether to shelve its disputed sale of a second state-of-the-art Mistral warship to Russia until October — the expected delivery date of the first vessel.

The message from Washington has been more consistent and forceful.

“The question at this point is not if we will do more sanctions, it’s when,” State Department spokeswoman Jen Psaki said.

But Russia’s Deputy Foreign Minister Sergei Ryabkov warned that Moscow was preparing an entire series of “asymmetrical measures” should the U.S. hit his country with more severe measures.

Ryabkov said these covered “a number of areas of dialogue . . . that are important to the Americans” and hinted that Russia could “raise the stakes” in the ongoing Iranian nuclear talks.

  • We might ask whether negotiations would have gone better if politicians were not the counterparts. Maybe we should have got counsellors or someone else to do the bargaining. I don’t think politicians are suited to the tasks. They are accustomed to getting their way, because they have a punitive sanction to expound. When you impose ‘consequences’ on other nations, you end up going into very expensive wars. Wars tend to elevate anxieties, cause more victimization and hostility, rather than reducing it. I believe these negotiations went on for just a few weeks. Hardly seems peace got much of a chance. Sanctions are an escalation – a threat of consequences. You may as well go straight to war – to show you mean it. I think the value proposition of peace has not been well explained to Putin or Kerry/Obama.