Russia-West standoff escalates

CNC 

Confrontation between Russia and the West, triggered by the Ukraine crisis, escalated further with EU and the US unveiled tougher sanctions on Moscow.   Meanwhile, leaders of the Group of Seven industrialized nations have also threatened more sanctions against Russia.................................................................................

 

Experts warn that such actions would inevitably take toll on economies of all parties.

 

ECONOMY REPORT has the details.

 

The United States and European Union have unveiled sweeping sanctions targeting Russia's defense, energy and finance sectors.

 

SOUNDBITE (RUSSIAN): SVETLANA KRIVORUCHKO, Head of Money and Credit Relations Research Centre

"Previous rounds of sanctions aimed at some specific individuals and banks, but this round is intended to prevent Russia from entering the financial markets to get foreign loans. And fund is also banned to go into Russian markets. These economic sanctions will not only affect particular individuals but also the whole economy."

 

And now insiders believe that it's a difficult situation for Russian companies to receive fresh money, mostly from the international financial markets.

 

SOUNDBITE (ENGLISH): FRANK SCHAUFF, CEO of Association of European Businesses

"We have to see however that certainly, if we talk about EU sanctions, the U.S. sanctions go further than that. They have already started earlier and these are certainly already creating problems with regards to the access to the international financing for Russian companies. And the approaches are much broader here than the EU sanctions have been taken."

 

In response, Russia criticized the latest sanctions imposed by the United States and the EU, warning that the measures could backfire on both parties' economies.

 

Some EU countries have expressed their concerns about the negative impact the sanctions against Russia could exert on their economies.

 

Many of the bloc's countries have close trade and business ties with Russia, which is a major gas provider.

 

Association of German Chambers of Commerce and Industry warned that sanctions against Russia, which was Germany's third largest trading partner outside the EU, had affected one fourth of its exporters.

 

Experts urge EU companies to reorient themselves to new markets to avoid adverse impact brought by the sanctions.

 

The Moscow-based Association of European Businesses also warned that the new round of western sanctions will not only harm Russian economy, but also restrict the economic growth of the EU and Ukraine.

 

Meanwhile, Russian Foreign Minister Sergei Lavrov said Moscow is ready to ward off possible consequences.

 

SOUNDBITE (RUSSIAN): SERGEI LAVROV, Russian Foreign Minister

"I assure you, we will overcome any difficulties that may arise in certain areas of the economy, and maybe we will become more independent and more confident in our own strength."

 

Russia's central bank said it would take measures to support banks hit by new western sanctions.

 

State-controlled oil company Rosneft says the recent sanctions will not critically affect the Russian oil sector, though some plans would probably be revised.