Thursday

24th May 2018

US joins EU on Russia economic sanctions

The US on Tuesday (29 July) announced a widening of its own Russia sanctions to match the EU's economic sanctions adopted just a few hours previously.

"Today, and building on the measures we announced two weeks ago, the United States is imposing new sanctions in key sectors of the Russian economy: energy, arms, and finance," US President Barack Obama said at a press conference in Washington.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

  • US President Obama: This is not a new Cold War (Photo: whitehouse.gov)

He said exports of "specific goods and technologies to the Russian energy sector" will be banned, and more Russian banks and defence companies added to an existing blacklist.

"And we’re formally suspending credit that encourages exports to Russia and financing for economic development projects in Russia," he added.

He said the sanctions regime "will have an even bigger bite" as it was widened in close co-operation with the EU.

EU ambassadors earlier on Tuesday adopted the so-called stage three of the sanctions regime, banning trade in Russian bonds and stocks issued by state-owned companies, as well as arms, technology for oil exploration and high-tech items imported by Russian military companies.

"The European Union is joining us in imposing major sanctions on Russia - its most significant and wide-ranging sanctions to date," Obama said.

He accused Moscow of continuing to arm and train pro-Russian rebels in eastern Ukraine, who are still shooting down Ukrainian planes and killing civilians even after the downing of the Malaysia Airlines flight MH17 on 17 July.

Obama said the sanctions regime is already weakening the Russian economy, as foreign investors are staying away and nearly $100 billion (€74bn) in capital is fleeing Russia.

"Russia’s energy, financial, and defence sectors are feeling the pain. Projections for Russian economic growth are down to near zero. The major sanctions we’re announcing today will continue to ratchet up the pressure on Russia, including the cronies and companies that are supporting Russia’s illegal actions in Ukraine," Obama said.

He said this was not "a new Cold War", rather a "very specific issue related to Russia’s unwillingness to recognise that Ukraine can chart its own path."

Will the sanctions work?

Bloomberg has estimated that Russian firms will be cut off from €447 billion worth of funding on EU and US financial markets, but the key question is whether these economic sanctions will have any impact on President Vladimir Putin.

Obama noted that "we can't in the end make President Putin see more clearly" but both Washington and Brussels are hoping that hitting the Russian economy hard will make Moscow change course.

An EU official on Tuesday in Brussels explained that the sanctions can be scaled back or suspended at any time if there are "political developments" or if they prove too harmful for the EU economies.

Circumventing the sanctions regime is another issue "that always arises" when trade embargoes are put in place, the official said.

Brussels and Washington have been reaching out to other countries - such as Switzerland, Norway, Japan - asking them not to come in and supply to Russia with what it is missing due to the sanctions.

But in the end, the sanctions regime "does not create an obligation to other countries to stick to these measures," the EU official said.

"We are aware there could be a substitution effect, that's why we focused on technologies with a lower risk of substitution. But there will be, as of tomorrow, an outreach [by Russia] to all third states concerned," the official said.

Obama, EU leaders agree on Russia sanctions

The leaders of Britain, France, Germany, Italy and the US held a conference call on Monday and agreed to impose economic sanctions on Russia as it continues to support the war in eastern Ukraine.

Sofia summit: EU leaders search for a Trump strategy

"With friends like that, who needs enemies?" European Council Donald Tusk asked on Wednesday, as EU leaders were trying to come up with a reply to the US president's questioning of the transatlantic relationship.

Analysis

EU has no 'magic bullet' against US Iran sanctions

EU leaders in Sofia will discuss how they can protect the bloc's economic interests against US threats to sanction companies doing business in Iran. But their options are limited.

Opinion

Ratifying CETA after 'Achmea scandal' is anti-European

While few people in Europe have heard of the 'Achmea' ruling, the case will have far-reaching consequences. Member states must understand the implications of the case quickly - especially those considering ratifying the EU-Canada trade agreement.

News in Brief

  1. Gazprom accepts EU conditions on gas supplies
  2. Facebook tells MEPs: non-users are not profiled
  3. Commission proposes ending France deficit procedure
  4. UK households hit with Brexit income loss
  5. Report: EU faces 10% cut in steel exports to US
  6. Australia wants more access to EU agricultural market
  7. CV of Italian PM candidate under scrutiny
  8. Puigdemont Spain extradition rejected by German court

Stakeholders' Highlights

  1. Nordic Council of MinistersOECD Report: Gender Equality Boosts GDP Growth in Nordic Region
  2. Centre Maurits Coppieters“Peace and reconciliation is a process that takes decades” Dr. Anthony Soares on #Brexit and Northern Ireland
  3. Mission of China to the EUMEPs Positive on China’s New Measures of Opening Up
  4. Macedonian Human Rights MovementOld White Men are Destroying Macedonia by Romanticizing Greece
  5. Counter BalanceControversial EIB-Backed Project Under Fire at European Parliament
  6. Nordic Council of MinistersIncome Inequality Increasing in Nordic Countries
  7. European Jewish CongressEU Leaders to Cease Contact with Mahmoud Abbas Until He Apologizes for Antisemitic Comments
  8. International Partnership for Human RightsAnnual Report celebrates organization’s tenth anniversary
  9. Nordic Council of MinistersNordic Cooperation Needed on Green Exports and Funding
  10. Mission of China to the EUPremier Li Confirms China Will Continue to Open Up
  11. European Jewish CongressCalls on Brussels University to Revoke Decision to Honour Ken Loach
  12. Sustainable Energy Week 2018"Lead the Clean Energy Transition"- Register and Join Us in Brussels from 5 to 7 May

Latest News

  1. GDPR does not (yet) give right to global oblivion
  2. Privacy Shield less relevant given GDPR, says data chief
  3. Unknown academic to lead Italy into EU clash
  4. 'Killer robot' projects eligible for EU defence fund
  5. Funding for European values needs radical changes
  6. Feeble EU format deflates Zuckerberg 'hearing'
  7. Are EU data watchdogs staffed for GDPR?
  8. EU pessimistic on permanent US trade exemption

Stakeholders' Highlights

  1. EU Green Week 2018Green Cities for a Greener Future. Join the Debate in Brussels from 22 to 24 May
  2. Nordic Council of Ministers12 Recommendations for Nordic Leadership on Climate and Environment
  3. Macedonian Human Rights MovementOxford Professor Calls for an End to the Anti-Macedonian Name Negotiations
  4. ACCAPeople Who Speak-Up Should Feel Safe to Do So
  5. Mission of China to the EUProgress on China-EU Cooperation
  6. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  7. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  8. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  9. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off
  10. UNICEFCalls for the Protection of Children in the Gaza Strip
  11. Mission of China to the EUForeign Minister Wang Yi Highlights Importance of China-EU Relations
  12. Nordic Council of MinistersImmigration and Integration in the Nordic Region - Getting the Facts Straight