EU leaders meet after Obama raises stakes in Crimea row

Ukraine crisis dominating Brussels summit after US, Russian authorities trade blows


US president Barack Obama raised the stakes in an East-West confrontation over Crimea today by targeting some of Russian president Vladimir Putin’s closest long-time political and business allies with personal sanctions.

The extension of visa bans and asset freezes into Mr Putin’s inner circle came as Moscow rushed to consolidate the annexation of the Black Sea peninsula, seized from Ukraine last month, and to boost its military presence in the region.

European leaders are discussing the developments in Crimea at a summit in Brussels toinght.

Officials said that while the EU would add a dozen names to its sanctions list and cancel a planned EU-Russia summit in Sochi, it would not go as far as Washington in hitting Putin’s money men. “We will be a step behind the Americans,” a senior European diplomat said.

Speaking on his way into the summit, Taoiseach Enda Kenny said that Ireland supported expanding the list but he declined to be drawn on whether he would support more serious sanctions.

Moscow retaliates

Russia imposed retaliatory sanctions on nine US officials and lawmakers, warning the West it would hit back over “every hostile thrust.”

Three White House officials and five US senators - Harry Reid, Robert Menendez, John McCain, Mary Landrieu and Dan Coats - were among the Americans barred from Russia, the Russian foreign ministry said. US House of Representatives speaker John Boehner was also on the list.

“We have repeatedly warned that sanctions are a double-edged instrument and would hit the United States like a boomerang,” the Russian foreign ministry said. “There must be no doubt: We will respond adequately to every hostile thrust.”

Russian troops took over three Ukrainian warships in Crimea today, using stun grenades in one incident, a Ukrainian spokesman said.

Kiev also said it had begun withdrawing its border guards, surrounded and outnumbered by Russian forces, from Crimea to the mainland.

Putin associates

The 20 names added to the US blacklist included Kremlin banker Yuri Kovalchuk and his Bank Rossiya, major oil and commodities trader Gennady Timchenko and the brothers Arkady and Boris Rotenberg, linked to big contracts on gas pipelines and at the Sochi Olympics, as well as Mr Putin’s chief of staff and his deputy, the head of military intelligence and a railways chief.

Most grew rich after being associated with Mr Putin since the former KGB officer began his ascent to power in the mayor’s office of St Petersburg in the 1990s.

In a statement explaining the sanctions, the US Treasury said: “Gennady Timchenko is one of the founders of Gunvor, one of the world’s largest independent commodity trading companies involved in the oil and energy markets.

“Timchenko’s activities in the energy sector have been directly linked to Putin. Putin has investments in Gunvor and may have access to Gunvor funds.”

Mr Putin has denied any link with Gunvor in the past. The Swiss-based oil trading firm said in a statement that Mr Putin had no ownership of Gunvor and “any understanding otherwise is fundamentally misinformed and outrageous”.

Russian forces took control of Crimea in late February after Moscow-backed Ukrainian president Viktor Yanukovich was toppled by protests sparked by his decision to spurn a trade deal with the EU and seek closer ties with Moscow. People in Crimea voted overwhelmingly to join Russia in a referendum last Sunday which Kiev and the West have refused to recognise.

With Washington trying to tighten the screws on Moscow, Mr Putin told Russian company bosses to bring their assets home to help the nation survive the sanctions and an economic downturn.

Broad sections

In a potentially ominous move, Mr Obama said he had signed a new executive order that clears the way for US sanctions against broad sections of the Russian economy, should Mr Putin’s military make moves beyond Crimea and into southern and eastern Ukraine which also have large Russian-speaking populations.

“We’re imposing sanctions on more senior officials of the Russian government,” he said. “In addition, we are today sanctioning a number of other individuals with substantial resources and influence who provide material support to the Russian leadership, as well as a bank that provides material support to these individuals.”

Mr Obama trumped European leaders for the second time in a week by announcing tougher measures than they were planning just as they sat down to try to resolve their differences on sanctions.

While Poland and former Soviet Baltic states that are now EU members have pushed for a tough line, the main EU powers - Germany, France and Britain - all have strong economic reasons for caution.

Phase 3

German chancellor Angela Merkel told parliament in Berlin that the 28 EU leaders would show they are ready to ramp up punitive measures in a staged response against Russian officials and move to economic sanctions if Mr Putin went further.

“The EU summit today and tomorrow will make clear that we are ready at any time to introduce phase-3 measures if there is a worsening of the situation,” she said.

Some diplomats read her statement as an implicit recognition that Crimea was lost, and that only further steps by Russia to destabilise Ukraine or intervene in other post-Soviet republics would trigger sanctions that could hurt convalescing Western economies as well as Moscow’s.