Europe Finally Ready to Sanction Russia More Broadly

Europe Finally Ready to Sanction Russia More Broadly

Western leaders say they’ve cobbled together a united front against Russia, a week and a half after the downing of Malaysia Airlines Flight 17 killed nearly 300 people.

U.S. President Barack Obama on Monday afternoon spoke to the leaders of Britain, Germany, France, and Italy in a joint call, during which they agreed on tougher sanctions against Moscow. The United States says Russia provided the training and weaponry to the militants in eastern Ukraine who shot down the passenger plane on July 17.

"They agreed on the importance of coordinated sanctions measures on Russia for its continued transfer of arms, equipment, and fighters into eastern Ukraine, including since the crash," a statement from the White House stated after the call.

Although the United States has long pushed for broader sanctions against whole sectors of the Russian economy, European leaders were reluctant until now.

British Prime Minister David Cameron said in a statement that the leaders agreed that "ambassadors from across the EU should agree [to] a strong package of sectoral sanctions as swiftly as possible."

EU leaders could announce new sanctions as early as Tuesday, July 29, when they meet. The United States often follows EU moves with measures of its own.

Although the European Union agreed last week to consider sanctions against Russia’s energy, defense, and financial industries, it was unclear how far they would go. It’s still uncertain how broad the sanctions will be, but the call on Monday indicated a change of tone from last week, when EU politicians were trading barbs over whether Britain or France was more reliant on Moscow’s money.

The EU will likely restrict each industry slightly, rather than imposing a full ban — such as an arms embargo. That approach would help address the fundamental problem of different EU countries relying more on Russian business in different industries. London’s financial district, for instance, has many ties to wealthy Russian businessmen, whereas in France it’s the defense industry that could suffer if it can’t fulfill a $1.6 billion deal to sell warships to Moscow. The new measures could also target technology provided by Western companies that Russia relies on in its energy sector, which the United States has also considered.

Analysts have predicted further sanctions against Russian industry, after Moscow’s continued intransigence since the crash in the face of Western threats. Eurasia Group’s head of European risk analysis, Mujtaba Rahman, said in an analyst’s note Monday that he expects more sanctions this week and that Moscow would respond, though likely in kind with economic measures, not with tanks.

"Russia will apply at least informal retaliation against U.S. companies, impairing their operations through health and safety inspections and customs delays," Rahman said.