Russia bans Polish imports over sanctions
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RUSSIA fought back yesterday over new US and EU sanctions imposed over Ukraine, where fighting between pro-Russian rebels and government troops has intensified since a Malaysian airliner was shot down.
The worst confrontation between Russia and the West entered a new phase this week since the United States and European Union took by far the strongest international steps yet against Moscow over what they said its support for Ukraine’s rebels.
New EU and US sanctions unveiled on Tuesday restrict sales of arms and equipment for the oil industry, while Russian state banks are barred from raising money in Western capital markets. Moscow called the sanctions “destructive and myopic” and said Europe and the United States would suffer. Yesterday, it banned imports of Polish fruit and vegetables and said it might expand the ban to the entire EU.
Russian banks said they would seek financing in Asia. Novatek, a big Russian gas company that works with French firm Total, said it was studying the impact of sanctions on its international joint ventures. Heavy fighting has been taking place near the site where Malaysian flight MH17 crashed into wheat and sunflower fields on July 17.
Kiev accused the pro-Russian rebels yesterday of fortifying the area, including with land mines, to prevent the site from being properly investigated.
The new Western sanctions mark the first time Washington and Brussels have adopted measures designed to hurt the overall Russian economy.
“Russia’s actions in Ukraine and the sanctions that we’ve already imposed have made a have made a weak Russian economy even weaker,” US President Barack Obama said in Washington on Tuesday. “If Russia continues on this current path, the costs on Russia will continue to grow.”
German Economy Minister and Vice Chancellor Sigmar Gabriel said the measures would hurt the European economy but would hurt Russia more. The price was worth paying, he added: “At a time of war and peace, economic policy is not the main consideration.”
The Russian Central Bank said it could support banks that were hit by sanctions. Russia’s second-largest bank, VTB, said it would find funding outside of the EU and United States, using currencies other than euros and dollars.
But bankers said Russian firms had been effectively frozen out of global lending, and not just in the West, leaving the Russian state as their only source of funding.
The first European economic victims of the trade war were Polish apple growers, who sell more than half their exports to Russia. Moscow is by far the biggest importer of EU fruit and vegetables, buying more than 2 billion euros’ worth a year. Russia said it was banning most Polish fruit and vegetables for sanitary reasons and would look into expanding the ban to the rest of the EU.
The Polish agriculture ministry said the embargo “amounts to political repression in response to the sanctions imposed by the European Union against Russia”, and said it would seek compensation from the EU.
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