EU and US 'ready' to increase Russia sanctions

The five biggest EU states and the US have said they’ll increase economic sanctions on Russia if it escalates fighting in Ukraine.

The warning came in a joint statement by the G7 i summit in Schloss Elmau, Germany, on Monday (8 June).

They said: “We … stand ready to take further restrictive measures in order to increase costs on Russia should its actions so require”.

They also said existing sanctions should stay in place until there’s “complete implementation of the Minsk agreements [a ceasefire accord] and respect for Ukraine’s sovereignty”.

They noted they’re “concerned by the recent increase in fighting” and urged the Kremlin to “stop trans-border support of separatist forces”.

The “recent … fighting” refers to Russia’s attack on Marinka, a town in east Ukraine, last week.

The assault failed. But Russia has made territorial gains elsewhere in the region since it signed the Minsk pact last September.

It now has 42,500 fighters, a quarter of which are regular Russian soldiers, and 560 tanks in Ukraine - a force the size of a small EU state - Kiev says.

For his part, US president Barack Obama told press: “As we’ve seen, in recent days, Russian forces continue to operate in east Ukraine, violating Ukraine’s sovereignty and territorial integrity”.

He noted the sanctions mean Russian banks are “locked out of the international system” and its arms and energy firms can’t buy “key technologies”.

“Russia is in recession, so Russian actions in Ukraine are hurting Russia and hurting the Russian people”.

Referring to Russian leader Vladimir Putin, he added: “He needs to decide; does he continue to wreck his country’s economy and continue Russia’s isolation in pursuit of a wrong-headed desire to recreate the Soviet Empire’s greatness?”.

German chancellor Angela Merkel used less strident words.

“Given the amount of time that we [the G7 leaders] spent with each other, we didn’t talk a great deal about Russia”, she said.

But she noted EU leaders plan to extend the life of the existing sanctions when they meet in Brussels on 25 June.

“At the March [summit] we said sanctions would be extended for the period of time of the implementation of the Minsk agreement. We committed to that once again”.

The G7 statement added: “We reiterate our condemnation of the illegal annexation of the Crimean peninsula by the Russian Federation and reaffirm our policy of its non-recognition”.

The economic measures aren’t tied to Crimea occupation, however.

“When it comes to these specific sanctions … that the Europeans will continue to co-ordinate with us, [they] are directly related to commitments that Russia made in the context of the Minsk implementation plan”, Josh Earnest, a White House spokesman, said on Monday.

Obama noted the fact Putin isn’t at Schloss Elmau is “another sign of Russia’s isolation”.

The G7 - Canada, France, Germany, Italy, Japan, the UK, and the US - used to meet with Russia before it annexed Crimea.

Merkel, on Monday, had mooted conditions for Putin's return to the club.

But the Canadian leader, Stephen Harper, told the CNBC broadcaster: “Certainly Canada, and I know others, would strongly oppose him [Putin] ever returning”.

“He runs an economy that's dominated by oligarchs and criminal syndicates. It's not at all like our economy. It doesn’t share our interests. It doesn’t share our values”.

Putin himself stayed quiet on Tuesday.

His spokesman, Dmitry Peskov, said: “Yes, we paid attention to the latest declarations on sanctions. These are not new theses”.

“Among the participants of this meeting there are nuances in their approaches. Some talk about the need for dialogue with Russia”.

His ambassador to the UK, Alexander Yakovenko, tweeted: “Nothing new in G7 talk about pressure on Russia. The sanctions bore no fruit, and they clearly won’t”.