New US, EU sanctions on Russia

[Asian.Century]

Russia counts cost of new US, EU sanctions

MOSCOW: Russia was counting the potential cost of Western sanctions targeting its key energy and finance sectors Wednesday, with the central bank promising to support lenders hit with penalties.

The U.S. and European Union Tuesday announced a raft of new penalties that would limit the trade of arms and technology that can be used in the oil industry and for military purposes. The EU also put its capital markets off limits for Russian state-owned banks.

The hope is to make the penalties, which had until recently mainly targeted Russian individuals, more biting economically for Russia.

Amid concerns about the potential impact on Russia's financial stability, the central bank announced it would "take adequate measures" to support the targeted banks. It did not give further details.

The reaction in the stock markets in Moscow was mixed, as investors had sold off shares in Russian companies for the past two weeks after Malaysia Airlines Flight 17 was downed over east Ukraine, killing all 298 people on board. Western officials accuse Russia-backed separatists of bringing down the plane with a missile supplied by Moscow.

Reports last week that the new, tougher sanctions were due had also caused markets to tumble for days ahead of their formal announcement Tuesday.

On Wednesday, the MICEX benchmark index was up 2 percent, mainly thanks to a rise in shares in companies that were spared sanctions. Shares in VTB Bank, Russia's second largest and one of the sanctions targets, were down 0.9 percent.

Analysts warn that with most large state-owned banks cut off from Western funding, the long-term impact of sanctions on Russia's growth could be severe. U.S. officials said Tuesday that roughly 30 percent of Russia's banking sector assets would now be constrained by sanctions.

The International Monetary Fund already slashed Russia's growth forecast for this year to nearly zero, down from 1.3 percent last year, and the U.S. says more than $100 billion in capital is expected to flow out of the country.

"Russia's actions in Ukraine and the sanctions that we've already imposed have made a weak Russian economy even weaker," President Barack Obama said Tuesday.

It remained uncertain whether the tougher penalties will have any impact on Russia's actions in Ukraine - nor was it clear what further actions the U.S. and Europe were willing to take if the situation remains unchanged. In the nearly two weeks since the Malaysia Airlines plane was felled in eastern Ukraine, Russia appears to have deepened its engagement in the conflict, with the U.S. and its potallies saying that Russia was building up troops and weaponry along its border with Ukraine.

Europe has a far stronger economic relationship with Russia than the U.S. does, and until this week European Union leaders had been reluctant to impose harsh penalties - in part out of fear of harming their own economies.

EU President Herman Van Rompuy and the president of the European Commission, Jose Manuel Barroso, said the sanctions sent a "strong warning" that Russia's destabilization of Ukraine could not be tolerated.

"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," the two top EU officials said in a statement.

The new EU sanctions put the 28-nation bloc on par with earlier sector sanctions announced by the U.S. and in some cases may even exceed the American penalties.

Obama said coordinating Tuesday's actions will ensure that the sanctions "will have an even bigger bite."

Despite the West's escalation of its actions against Russia, Obama said the U.S. and Europe were not entering into Soviet-era standoff with Russia.

"It's not a new Cold War," he said in response to a reporter's question.

German Foreign Minister Frank-Walter Steinmeier pressed for a diplomatic effort to calm the situation in Ukraine, saying Wednesday that "sanctions alone are not a policy, so we must continue to seek opportunities to defuse the conflict politically."

A meeting planned in Minsk this week between the contact group and representatives from eastern Ukraine "must agree steps on the road to a cease-fire," Steinmeier said in a statement.

He renewed a call on all sides to allow unrestricted access to the Malaysia Airlines crash site. "It is intolerable that, two weeks after the crash, it is still not possible to bury with dignity the dead who remain at the crash site," he said.

Australia's Prime Minister Tony Abbott said Wednesday he was focused on the Malaysia Airlines disaster and was not considering ratcheting up sanctions against Russia.

"I'm not saying that we might not at some point in the future move further. But at the moment, our focus is not on sanctions; our focus is on bringing home our dead as quickly as we humanly can," Abbott told reporters.

Read more: Russia counts cost of new US, EU sanctions | Business , International | THE DAILY STAR

(The Daily Star :: Lebanon News :: Breaking News, Lebanon News, Middle East News & World News | THE DAILY STAR

 

[Asian.Century]

Russia sanctions: Who will be hurt the most?

By Joanna Humphreys Business reporter, BBC News

They are the toughest sanctions imposed on Russia since the Cold War, but who will they hurt the most?

The EU's latest sanctions package comes amid anger over the Kremlin's support for Ukrainian rebels, who stand accused of shooting down a Malaysia Airlines passenger jet and killing 298 people.

The measures include an arms embargo, restrictions on offshore energy exploration and curbs on Russian banks trading in European markets.

The sanctions are intended to strangle the Russian economy and convince President Vladimir Putin to abandon his support for the separatists in Ukraine.

Russia's economy is relatively small, about the same size as Italy, but its energy resources are vast. Russia's exports are almost all raw materials and about 60% of these are energy products.

The EU takes more than 45% of Russia's exports. Less than 3% of the EU's exports go to Russia.

So could it be that in trying to inflict economic pain on Russia, the EU will merely end up harming itself?

Plans to destabilise Russia's access to capital may be felt most acutely in the City of London
Putin 'strengthened'

Roughly 30% of Russia's banking sector assets are now constrained by sanctions, according to US officials.

Raoul Ruparel of Open Europe, an EU policy think tank, said: "The UK looks likely to bear the largest economic burden from these sanctions. The financial sanctions are the most developed and will hit Russian state-owned banks debt and equity issuance, which takes place largely through London.

"The sanctions have been designed to have a larger impact on Russia than the EU. This looks likely to be the case. Russian firms will have to look elsewhere for funding and certain hi-tech imports - a tricky, if not impossible, task."

But according to banking expert Ralph Silva, going after Russia's banks would hurt the West the most.

"This will ultimately hurt the City, as well as New York," he says, "because for the first time, the Russians are going to realise that they in fact can live without the global financial services industry.

"[Mr] Putin has been strengthened as a result of the sanctions. The Russian public is seeing him as the protector and if he gets the country through these sanctions, he will solidify his hold on power."

Banks braced
Financial analyst Chris Skinner said that the sanctions on banks could force Russia to move away from the City and look elsewhere.

He said the restrictions "could kill the Russian flow of capital through our markets if there is an alternative. For example, would they switch to Hong Kong or Shanghai?"

Mr Skinner also said that they would benefit Russians who had invested outside their home country.

"The more we sanction Russia, the more the rouble loses value, the more the billionaires who invested outside Russia in, for example, London property gain through [foreign exchange] fluctuations and property and other valuable commodity investments," he said.

The defence secretary is facing calls to suspend or revoke remaining licences
International credit card companies were unconcerned. Mastercard said Western sanctions would have no impact on Russian business, while Visa said US economic restrictions were not affecting its work in Russia.

Russia's Bank of Moscow said that business was not suffering from sanctions and that it was not planning to borrow on foreign markets.

In the wake of the sanctions announcement, trading at Russia's second-largest state-owned bank, VTB, was down 1.2%. The bank said that the sanctions were "unjust, legally dubious and likely to cause economic harm to all sides".

VTB said it was ready to borrow in other currencies and markets.

As well as financial curbs, the package cracks down on arms sales to Russia. The EU has a list of prohibited equipment under the new embargo, which takes effect on Thursday.

The embargo will not apply to contracts signed before the start of these sanctions, which means a $1.6bn (£1bn) helicopter deal with France is unaffected.

Lilit Gevorgyan, a Russian analyst at IHS, said: "Considering relatively low volumes of arms trade between the EU and Russia, the sanctions are more symbolic, especially seeing that France is holding on to the two Mistral-class helicopter carriers deal with Russia.

"Since the collapse of the Soviet Union Russia has been reluctant to import arms," she said.

"While Russia is the second-largest arms exporter in the world, its military imports from the EU are limited in volume."

And Russian firms are keen to stress that the US is missing out as a result of the embargo. Russian arms maker Kalashnikov expressed its "condolences" to US consumers on Tuesday, after restrictions on Russian arms exports meant the US could no longer purchase its weapons.

The oil and gas technology sector, much of it based in Aberdeen, will be hit by proposed export controls
Energy
European leaders have not limited oil and gas imports from Russia, as this would hurt EU countries that rely on Russian energy.

They have instead targeted Russia's long-term ability to develop new oil resources, by placing restrictions on the technology systems behind offshore energy exploration.

The US and EU have banned exports of technology systems, known as "sensitive technologies", for use in Russian deepwater, Arctic and shale oil exploration.

Effect on other countries

• Germany was originally reluctant to impose sanctions on Russia, with the move being potentially damaging to the German economy. Russia is Germany's eleventh biggest export market. The downing of MH17 saw a change of tone from Germany, with Ms Merkel saying EU sanctions were now "unavoidable" and the German finance minister saying: "Economic interests are not the top priority. The top priority is ensuring stability and peace"
• Poland has been hit as Moscow bans most fruit and vegetable imports from Poland on Wednesday and said it may extend the restrictions to the rest of the EU. Polish fruit growers said the ban was political, although Russia denied this.

Russia is one of the world's largest oil producers and holds the largest combined oil and gas reserves in the world.

Total, which owned 18% of Russia's natural gas producer Novatek, stopped buying shares when the MH17 flight was shot down earlier this month.

In response to the sanctions, Russian gas company Gazprom announced that it would now source its gas turbine spare parts locally instead of relying on imports.

According to Gazprom's managing company, the combined value of these contracts is about 10bn roubles (£166m).

BBC News - Russia sanctions: Who will be hurt the most?

 

[Asian.Century]

Recent History Suggests Tougher Russia Sanctions Are Needed

Past Experience With Iran, Others Suggest Pressure May Need to Be Significantly Stepped Up

A Ukrainian serviceman of the Donbass volunteer battalion throws a Russian flag out of the window of a building in the outskirts of the eastern Ukrainian city of Lysychansk this week. Agence France-Presse/Getty Images

The U.S. and Europe made good this week on their threats to start penalizing broader sections of Russia's economy in a bid to force President Vladimir Putin to end his support for separatist rebels in Ukraine.

But recent history of the use of financial sanctions by Washington and Brussels—including against Iran, North Korea and Syria—suggests that significantly more pervasive penalties, particularly against Moscow's energy sector, would be needed to change the Kremlin's calculations, said current and former U.S. officials and sanctions experts.

Even then, it is uncertain whether Mr. Putin values Russia's economy more than his influence over Ukraine.



The U.S. and Europe moved beyond months of warning shots and plunged into a new phase in their economic and diplomatic standoff with Russia, taking aim directly at the Russian economy. WSJ's Marcus Walker joins Simon Constable on the News Hub to discuss. Photo: Getty

The Obama administration has viewed the ongoing financial squeeze on Iran as a model: The country's oil exports have been cut in half over the past three years and its banks largely hived off from the global financial system. This prompted Tehran, the White House argues, to engage for the first time in serious negotiations aimed at capping its nuclear program.

American and European officials who crafted this strategy, however, stress that it took more than a decade of steadily increasing sanctions to achieve those results.

The U.S. and European Union also had to be prepared to weather potential economic blowback, in the form of oil price spikes. Such risks could be even bigger in an economic campaign against Russia.

Related

• Kiev Faces Threat of Donetsk Street Fighting
• NATO Ill-Prepared To Face Threat From Russia
• Loopholes Blunt Impact of U.S., EU Sanctions Over Ukraine
• EU Places Sanctions on Russian Oligarchs
• Analysis: Sanctions Remain Relatively Porous
• G7 Issues New Broadside Against Russia
• Russia Defiant in Face of Sanctions
• Investigators Still Can't Reach Crash Site

• Heard: Playing the Long Game in Russia
• Total to Review Russia Sanctions
• EU, U.S. Expand Sanctions

"Russia is a very different animal than the places where we've had sanctions before," said Victor Comras, who led U.S. sanctions efforts under U.S. Secretary of State Madeleine Albright in the late 1990s.

Russia's economy is more integrated into Europe's through energy infrastructure, trade and finance channels. It also has a much larger share of the global economy: nearly 3% versus Iran's 0.5%.

With nearly $500 billion in foreign exchange reserves—roughly 23% of its gross domestic product—Russia also has a bigger cushion than Iran, whose $68 billion represents around 19% of the country's GDP.

But the two countries pose similar foreign policy challenges, said backers of the Iran sanctions policy.

View Graphics

"The situation with Russia is similar to the situation with Iran in that you've got a foreign policy and national security problem in which just talking with them is not going to work…so diplomacy without leverage is not going to work," said Stuart Levey, who spearheaded the Treasury Department's Iran sanction efforts for seven years, and now serves as chief legal officer for HSBC Holdings HSBA.LN -0.80% PLC.

The corporate world is watching warily, with auto makers and energy giants already moving to limit Russian risks to their businesses. French oil giant Total SAFP.FR -3.13% said it has stopped increasing its stake in Russian natural gas producerOAO Novatek. NVTK.MZ +1.02%

Mass-volume car makers such as Volkswagen AG VOW3.XE -0.65% , Ford Motor Co.F -2.12% and General Motors Co. GM -1.21% 's Opel unit are expected to suffer most from the sanctions, said Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen.

"The more this looks like the administration is using pages from the Iranian financial sanctions playbook, the greater the likelihood that market players will voluntarily cut their business ties to stay ahead of potential penalties," said Mark Dubowitz of the Foundation for Defense of Democracies, who advises Congress.

Russia reacted with defiance. Mr. Putin didn't publicly respond to the EU and U.S. moves Wednesday, but his Foreign Ministry denounced the sanctions as "crazy and irresponsible" and warned that the U.S. and Europe would suffer as well.

The penalties included a ban on medium- and long-term financing for three of Russia's largest state-owned banks— VTB Bank, VTBR.MZ +0.51% Bank of MoscowMMBM.MZ +1.24% and Russian Agricultural Bank. They also included measures to ban the sale of military items to Moscow and to deny the Russian oil industry access to Western technologies needed for deep-sea drilling and the extraction of shale oil.



As the U.S. and the European Union step up economic sanctions against Russia over the crisis in Ukraine, WSJ's The Foreign Bureau takes a look at some Russian oligarchs who are on the list, some of those who aren't, and why.

For the first time, the EU this week also hit members of Mr. Putin's inner circle with visa bans and asset freezes. The U.S. has done so in its previous rounds of sanctions.

"Russia has not changed course" in Ukraine and has continued to escalate the conflict there, in defiance of international demands and its own commitments, the Group of Seven leading countries said in a separate statement Wednesday.

The immediate economic impact of the new sanctions is expected to be limited. The Russian stock market and the ruble gained a bit Wednesday, optimism that masks deeper risks, officials and analysts say. It isn't clear whether those risks are enough to change the Kremlin's calculus.

"The sanctions rolled out by the EU/U.S. this week do not really threaten an immediate and brutal hit to the Russian economy, but rather offer the prospect of further isolation, stagnation and decline for Russia," said Standard Bank economist Timothy Ash. "The question is whether Putin understands or really cares about this."

Restrictions on Russian banks' access to EU financial markets is expected to be the main source of near-term economic pain. But the measures leave out Russia's main business with the West: the sale of natural gas and oil to EU countries.

EU leaders including German Chancellor Angela Merkel have said the sanctions can be scaled back if Moscow becomes more cooperative—or scaled up if it continues to support pro-Russia rebels in Ukraine's east.

But few in Europe can imagine steps such as a boycott of Russian gas, which flowed to the West continuously even at the height of Cold War enmity. Many countries across the Continent have no way of replacing Russian gas quickly or affordably.

"If you really restrict Russian energy exports, then you hurt the EU as much as Russia," said Stefan Lehne, a scholar at Carnegie Europe, a nonpartisan Brussels think tank.

A sanctions regime limited to secondary economic ties such as banking, specialized engineering and arms highlights the constraints facing the West. Still, U.S. Treasury officials said they're plotting new measures against the Kremlin. "We have made it very clear that we can and will continue to increase pressure if Russia does not change course," said a senior U.S. official.

Current and former U.S. officials cited two actions against Iran that had the most crippling impact in recent years.

The first was legislation in 2010 that sanctioned any firm, foreign or American, that continued doing business with sanctioned Iranian banks and companies. The law gave the U.S. Treasury extraterritorial reach and essentially forced foreign firms to choose between doing business with the U.S. or with Iran.

The second action was the White House's sanctioning in 2012 of Iran's central bank, through which virtually all of Tehran's oil exports are conducted. The blacklisting served as a de facto oil embargo on Tehran and was followed by the EU's formal banning of any Iranian oil imports.

U.S. and European officials said it remains unclear how far the Obama administration and EU are willing to go. But officials involved in the debate said Washington and Brussels needed to make clear to the Kremlin that further pain is coming.

Mr. Dubowitz said Treasury should be considering steps to target Russian banks for their suspected money-laundering activities and ban them from global banking systems, which are vital to routine business. Congress and the White House should also consider legislation blacklisting companies that deal with blacklisted Russian entities.

"Sanctions are as much about psychology as legalities," he said.

—Ian Talley, Gregory L. White, Laurence Norman, Géraldine Amiel and Matthew Dalton contributed to this article.

Write to Jay Solomon at jay.solomon@wsj.com and Marcus Walker atmarcus.walker@wsj.com

Corrections & Amplifications

An earlier version of this article misspelled Madeleine Albright's first name as Madeline. (July 31, 2014)

 

[C130]

why are we picking on the bear
leave poor Putin alone.
geeze we trying to start the cold war over again? did it even end in the first place

 

[Asian.Century]

The US miserable failure to come up with clear-cut assessment concerning the Malaysian Boeing, the aggressiveness and cynicism of American propaganda against Russia – it all makes President Obama deteriorate the relationship with Moscow to the point of no return. His actions have nothing to do with common sense. Ralph Peters is a foreign policy analyst for Fox News. Speaking to Megyn Kelly July 21 night he said President Obama is scared of Vladimir Putin, «There are really many things he could do, but he's like a deer caught in the head lights. You know, even though he's president of the United State , to me it would be a hellish thing to live which such timidity, to be such a frightened man, I really feel that on a visceral level on a profound level. President Obama is scared of Vladimir Putin».

Locked in the Oval office like in a bunker, he rarely makes public appearances and prefers to communicate with other world leaders by phone. In his relationship with his Russian counterpart he does not do even that. He has not discussed the Malaysian airliner tragedy with Putin at all, not a single time. The wish for demonstrative muscle flexing has given place to fear of public failure… The indecisiveness of Obama has not gone unnoticed in America. By the end of 2013 the majority of Americans were convinced Obama was a failure as President. His ratings are at the lowest ebb now. His economic and health care policies are not popular as well as his handling of the Ukrainian issue. The Washington’s stance on Ukraine is negatively treated in other countries too.

A new survey by the Pew Research Center was conducted in 44 countries among 48,643 respondents from March 17 to June 5, 2014. His rating has remained rather low universally. Obama’s favorability is considerably down in Russia, reflecting recent tensions over the crisis in Ukraine. Only 15% of Russians currently express confidence in the American president, down from an already low 29% in 2013. Around 71% of Russian respondents express negative attitude towards the United States. U.S. favorability has also declined dramatically – just 23% of Russians say they have a favorable opinion of the U.S., less than half of the 51% registered in last year’s survey.

At the same time the Russian Public Opinion Research Center (VCIOM) survey shows the Russian President’s rating is up to 82, 3%. The West’s assessment of Russia’s President has never been impartial. They turn a blind eye on evident weak points of Obama and shy away from making straight comparisons between the US and Russian leaders. But many politicians highly appreciate the personality and activities of Vladimir Putin. For instance, Rudy Giuliani, former mayor of New York City, shared his thoughts on President Putin appearing on Neil Cavuto’s Fox News show. Giuliani praised Putin for being what he called «a leader». He laid it out as simply as he could:«Putin decides what he wants to do, and he does it in half a day, right? He decided he had to go to their parliament — he went to their parliament, he got permission in 15 minutes». Besides «He makes a decision and he executes it, quickly. And then everybody reacts. That’s what you call a leader», the former governor said. Giuliani next compared Putin’s decisiveness to President Obama’s leadership. In this regard, he found the American President lagging behind, «President Obama has gotta think about it, he’s got to go over it again, he’s got to talk to more people about it», Giuliani joked. Perhaps the President talks to wrong people?

It’s important who makes up the President’s team. He’s got ladies-bureaucrats around him saying many foolish things about Russia daily. For instance, Marie Harf, deputy spokesperson for the US Department of State, said at the press - briefing devoted to the Malaysian airliner tragedy that, «I would say that the Administration in general is attempting to put out as much information as we can about what underlies our assessment. I would also say that these aren’t competing narratives from two equally credible sources here. The Russian Government has repeatedly put out misinformation and propaganda throughout this conflict in Ukraine, so I would caution you from saying that this is just two equally credible sources». According to her, «We know that the Russian Government’s been training the pro-Russian separatists. We know, period, that what’s happening in eastern Ukraine would not be happening without the support of the Russian Government». As Harf put it, «So we’re still trying to get the facts here. And it’s true that it’s not possible for the separatists to function the way they are without support from Russia, without the training, without the sophisticated weaponry. So we need to get all the facts about this specific incident, but we know that the pro-Russian separatists could not function the way they’re functioning without the support from Russia». She said all those things without producing any evidence whatsoever. Americans ignore the data from other sources, except social networks, making the President look like a liar because the whole word knows the war and chaos in Ukraine have a label of made in USA. Moscow could affirm the United States always lies and the American leadership is not trustworthy. It’s not clear how the Obama’s Russian policy meets the national interests of the United States.

For instance, President Obama included two lesbian - former athletes into the composition of US official delegation going to Sochi. The US team did not include any official of Secretary’s level or higher. Russia was lambasted by the West for the law introducing a ban on so-called «propaganda of non-traditional sexual relationships to minors». Obama managed to strike a happy medium here. On the one hand, the United States did not boycott the Olympic Games, on the other hand, it took advantage of another chance to emphasize that Russia violates human rights and freedoms. The «anti-gay» law has become another pretext for publicly displaying hostility to Moscow. After the Sochi Olympic Games the United States called on the International Organization of Football Association to deprive the Russia’s team of taking part in the Brazil-held world cup. It did not work, so now the US is using the Ukraine to deprive Russia of its right to host the world cup in 2018.

The Ukrainian crisis provoked by the United States should make more reasonable those in Russia who have not yet lost the illusions related to the «re-set» policy.

The White House has crossed its strategic line switching from the cooperation to constant attempts to isolate Russia. There real reason is not the violation of democratic norms, or the events in Ukraine, where the United States has no vital interests except damaging Russia. Many reasons for confrontation are concocted. For instance, the US initiative to ban Russia from participating in the soccer world cup held in Brazil. Even the differences on the European missile defense are not fatal. The US cannot afford to deploy it due to lack of funds while Russia has the means to overcome the missile defense countermeasures.

Talking about the European choice of Ukraine, Washington is thinking about something else. It ponders the ways to make Russia destitute of its geopolitical advantages and isolate it from Europe. The policy is spurred by fear of Russia’s growing economic might.

«I also feel that we must think about additional steps to decrease the dependence of the national economy and financial system on negative external factors. I am not just referring to instability in global markets, but possible political risks as well», said President Putin at the Security Council session held on July 22 devoted to Russia’s sovereignty and territorial integrity. The President emphasized not only global markets’ instability but also the political risks involved. The West-imposed sanctions are used as a leverage to exert pressure on Russia.

The European commission has adopted a package of extended sanctions against Russia. Now they introduce tough measures to close access for Russia to capitals, military and high-tech technologies, including energy. The introduction of the sanctions will weaken the European Union – the leading US competitors on the European market will suffer heavy losses from sectoral sanctions. Washington will have a double gain. Perhaps, that’s why President Obama shies away from meeting his Russian counterpart and the old continent partners.

Nikolay Bobkin - Obama Makes Confrontation with Russia Reach Point of No Return - Strategic Culture Foundation - on-line journal > Obama Makes Confrontation with Russia Reach Point of No Return > Strategic-Culture.org - Strategic Culture Foundation

 

[Superboy]

why are we picking on the bear
leave poor Putin alone.
geeze we trying to start the cold war over again? did it even end in the first place

It's already Cold War 2.

 

[Asian.Century]

EU plans Russia sanctions talks with Latin America countries
World
August 12, 12:02 UTC+4

Since Russia banned food imports from the EU and the US last week in a response to sanctions, Moscow has been negotiating with Latin American countries for alternative supplies

MOSCOW, August 12. /ITAR-TASS/. The EU plans to hold talks with countries such as Brazil and Chile to dissuade them from stepping in to replace Europe’s banned agricultural exports to Russia, senior officials said on Monday, the Financial Times reported.

Since Russia banned food imports from the EU and the US last week in a response to sanctions, Moscow has been negotiating with Latin American countries for alternative supplies. Several countries and trade groups in South America said that Moscow’s measures could offer them a lucrative windfall.

Brazil has authorized about 90 new meat plants to immediately start exporting chicken, beef and pork to Russia, and Chile is tipped as a leading beneficiary of Russia’s embargo on European fish.

Seneri Paludo, Brazil’s Secretary for Agricultural Policy, said Russia’s embargo could also allow Brazil to export more corn and soy beans to the country. “Russia has the potential to be a large consumer of agricultural commodities, not just meat,” he said.

Such excitement in the agricultural powerhouses of Latin America has triggered concern in Brussels. “We will be talking to the countries that would be potentially replacing our exports to indicate that we would expect them not to profit unfairly from the current situation,” said one senior EU official at a briefing on the situation in Ukraine.

The official said he understood that individual companies could sign new contracts with Russia but it would “be difficult to justify” countries pursuing diplomatic initiatives to fill the gap left by the EU, the US, Norway and Australia.

Another EU official said the talks would be “political”, seeking to map out the importance of a united international front on Ukraine, rather than raising specific legal objections to food exports to Russia.

The EU, as the world’s largest trade bloc, can exercise influence through its negotiations with Latin America’s Mercosur trade grouping, although these 15-year-old talks on a trade accord are mired in difficulties over market access.

Most attention on potential winners from Europe’s trade war with Russia has focused on Latin America but Belarus and Turkey are also expected to profit.

While senior European diplomats are due to protest to any country seeking to fill the gap left by EU exports, an official from the EU’s agricultural commission was more sanguine. He explained that any country diverting exports to Russia would very probably create a new market for the EU.

The official said he understood that individual companies could sign new contracts with Russia but it would “be difficult to justify” countries pursuing diplomatic initiatives to fill the gap left by the EU, the US, Norway and Australia.

Another EU official said the talks would be “political”, seeking to map out the importance of a united international front on Ukraine, rather than raising specific legal objections to food exports to Russia.

The EU, as the world’s largest trade bloc, can exercise influence through its negotiations with Latin America’s Mercosur trade grouping, although these 15-year-old talks on a trade accord are mired in difficulties over market access.

Most attention on potential winners from Europe’s trade war with Russia has focused on Latin America but Belarus and Turkey are also expected to profit.

While senior European diplomats are due to protest to any country seeking to fill the gap left by EU exports, an official from the EU’s agricultural commission was more sanguine. He explained that any country diverting exports to Russia would very probably create a new market for the EU.

ITAR-TASS: World - EU plans Russia sanctions talks with Latin America countries

 

[Asian.Century]

EU foreign ministers seek new sanctions against Russia for its actions in Ukraine

By JUERGEN BAETZ, Associated Press

MILAN (AP) — Several European Union foreign ministers on Friday accused Russia of invading eastern Ukraine and said Moscow should be punished with additional economic sanctions.

The meeting of the 28-nation bloc's top diplomats in Milan came one day after NATO said Moscow slipped at least 1,000 Russian soldiers and much heavy weaponry into Ukraine.

"We have to be aware of what we are facing: We are now in the midst of the second Russian invasion of Ukraine within a year," said Swedish Foreign Minister Carl Bildt, referring to Russia's annexation of Ukraine's Crimean Peninsula in March.

"We see regular Russian army units operating offensively on the Ukrainian territory against the Ukrainian army," Bildt said. "We must call a spade a spade."

Russia has rejected accusations that it invaded Ukraine.

The foreign ministers were set to propose new sanctions against Russia for consideration at a summit of the bloc's 28 heads of state on Saturday in Brussels.

All options except military action will be considered to punish Russia for pursuing "the wrong path," Luxembourg Foreign Minister Jean Asselborn said.

"The European Union should be ready to move forward with possible new measures against Russia because the situation is still getting worse," Estonian Foreign Minister Urmas Paet said.

In an apparent bid for more support and tougher action against Russia, Ukrainian President Petro Poroshenko will address the summit on Saturday. He will also meet with European Commission President Jose Manuel Barroso, and summit Chairman Herman Van Rompuy in Brussels a few hours before the summit.

Fighting between Ukrainian military forces and Russian-backed separatists in eastern Ukraine has already claimed at least 2,200 lives, according to U.N. figures.

No foreign minister elaborated on what additional sanctions are being considered. The United States and the EU have so far imposed sanctions against dozens of Russian officials, several companies and the country's financial industry. Moscow has retaliated by banning food imports.

EU food exports to Russia are worth about 10 billion euros ($13 billion) annually. Nations boasting strong agricultural sectors such as Poland, the Netherlands and Germany were hit hardest during the summer harvesting season.

"These are Polish apples; Mr. Putin says they're poisonous," Polish Foreign Minister Radek Sikorski said in Milan, handing out juicy surplus apples to journalists at the beginning of the meeting.

Barroso called Russian President Vladimir Putin Friday and firmly condemned the "significant incursions into and operations on Ukrainian soil by Russian military units," his office said. Barroso warned Putin further destabilization of Ukraine by Russia "will carry high costs."

New EU sanctions against Russia would have to be agreed unanimously — a requirement that has in the past blocked or softened decisions since some nations fear the economic fallout. Russia is the EU's third-largest trading partner and one of its biggest oil and gas suppliers.

President Barack Obama said Thursday that Russia's support for rebel combatants in eastern Ukraine must incur "more costs and consequences."

In the face of an increasingly assertive Russia, the EU must reconsider its long-term security policies and investments, said Dutch Foreign Minister Frans Timmerans. "We need to rethink the logic of ever-decreasing defense spending."

The U.S. has long complained that its European NATO allies have neglected investing in its military capabilities, effectively free-riding on the security provided by America's much higher defense spending.

In Bucharest on Friday, Romanian President Traian Basescu said that in addition to new sanctions, NATO members should arm Ukraine's army.

EU ministers call for new sanctions against Russia - US News

 

[aliaselin]

Russian exported so little oil to China, while we need all of their export potion to optimize our energy strcuture

 

[AZADPAKISTAN2009]

People of Pakistan hope that Russians get thru this difficult time we support their view point

 

[milen]

This article gives the light in which we can observe the reality. this is very nice one and gives in-depth information. Thanks for this news