EU leaders agree on ‘maximum impact’ sanctions on Russia

People holding EU and Ukraine flags protesting against Russia's military operation in Ukraine, in front of the Russian consulate in Barcelona, Spain, on Feb 24, 2022. PHOTO: AFP

BRUSSELS (AFP, REUTERS) - European Union leaders wrapped up an emergency summit early Friday (Feb 25) with agreement to punish Moscow for its invasion of Ukraine by imposing severe sanctions targeting its financial, energy and transport sectors.

European Commission chief Ursula von der Leyen told a media conference afterwards that they “will have maximum impact on the Russian economy and the political elite”.

The summit started late Thursday, the day that Russia started blasting military targets and sending tanks and paratroopers into its pro-Western neighbour Ukraine.

Ukrainian President Volodymyr Zelensky addressed the gathering by videolink, telling European presidents and prime ministers that “he does not know if he will be able to speak with us another time", Luxembourg’s leader Xavier Bettel recounted as he left.

In a televised speech on Friday, Mr Zelensky said that the continued Russian aggression against his country showed that sanctions imposed on Moscow by the West were not enough.

The Ukrainian capital of Kyiv called an air raid alert after Russian missile strikes early on Friday, Ukrainian television said, as municipal authorities urged people to go to the nearest shelters.

In Brussels, Dr Von der Leyen said the packet of sanctions – the second adopted this week by the EU – is “targeting 70 per cent of the Russian banking market, but also key state-owned companies including the field of defence”.

She did not go into details, but a list drawn up by her commission, seen by AFP, proposed adding two Russian private banks – Alfa Bank and Bank Otkritie – to entities sanctioned by the EU.

It also called for Russians to be prohibited from putting deposits that are more than 100,000 euros (S$151,675) in EU banks or from purchasing euro-denominated securities.

Dr Von der Leyen said the measures “will increase Russia’s borrowing costs, raise inflation and gradually erode Russia’s industrial base”.

Energy sector targets of the sanctions included an export ban on equipment and technology Russia needs to upgrade its oil refineries.

An export ban on aircraft and plane parts to Russian airlines would also “degrade a key sector of Russia’s economy and the country’s connectivity,” Dr von der Leyen said.

“The fourth point is we are limiting Russia’s access to crucial technology – we will hit Russia’s access to important technologies it needs to build a prosperous future such as semiconductors or cutting edge technologies,” she said.

“And finally, on visas, diplomats and related groups and business people will no longer have privileged access to the European Union.”

The latest sanctions will come into effect once legal texts are drawn up that are then formally approved by member states’ foreign ministers and published in the EU’s official journal.

That was expected to happen as early as Friday or Saturday.

The leaders also said that Russian President Vladimir Putin "must and will fail", saying he was trying to bring the continent back to the age of empires and confrontations.

Russia launched its invasion by land, air and sea on Thursday following a declaration of war by Mr Putin. An estimated 100,000 people fled as explosions and gunfire rocked major cities. Dozens have been reported killed.

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The EU leaders on Friday also discussed how to ramp up political, economic and humanitarian support for Ukraine.

While EU agreement on the outline of the sanctions was rapid, there were clear divisions over the option of kicking Russia out of the SWIFT network that the world’s banks use to securely send messages in order to carry out transactions.

Mr Zelensky has urged the West to use that lever, which has already been implemented to devastating effect against Iran’s banking sector.

But United States President Joe Biden, speaking in Washington as the EU summit started, said: “It is always an option but right now that’s not the position that the rest of Europe wishes to take.”

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That assessment was borne out by German Chancellor Olaf Scholz, who suggested as he arrived for the summit that SWIFT and other measures should be kept “for a situation where it might be necessary, for other things”.

Other EU leaders, though, chafed at that stance.

“Talk is cheap...we have to be united around massive sanctions, severe sanctions,” Polish Prime Minister Mateusz Morawiecki said.

Latvia’s Prime Minister Krisjanis Karins said: “SWIFT, I think it’s the very right direction, I think we should go in that direction”, but only if other jurisdictions outside Europe also adopted that tactic.

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