Ukraine crisis: Russia could be cut off from markets, tech goods

Moscow would have its access to financial markets and high-tech goods limited under Western sanctions being prepared in case Russia attacks Ukraine, a top European Union official says.

The comments from Ursula von der Leyen, head of the EU’s Executive Commission, came on Saturday (Sunday NZ time) as tensions over Russia’s intentions toward Ukraine intensified.

US President Joe Biden said on Friday he was “convinced” that Russian President Vladimir Putin had decided to invade the neighbouring country.

“The Kremlin’s dangerous thinking, which comes straight out of a dark past, may cost Russia a prosperous future,” von der Leyen said on Saturday during the annual Munich Security Conference, where US Vice President Kamala Harris also spoke.

Von der Leyen said the EU’s executive arm had developed a “robust and comprehensive package” of possible financial sanctions against Russia with the US, UK and Canada.

“In case that Russia strikes, we will limit the access to financial markets for the Russian economy and [impose] export controls that will stop the possibility for Russia to modernise and diversify its economy,” she added. “And we have a lot of high-tech goods where we have a global dominance, and that are absolutely necessary for Russia and cannot be replaced easily.”

British Prime Minister Boris Johnson said the UK was coordinating its sanctions closely with the EU.

“If Russia invades its neighbour, we will sanction Russian individuals and companies of strategic importance to the Russian state and we will make it impossible for them to raise finance on the London capital markets,” he said in Munich. Johnson added that authorities would look for “the ultimate beneficiaries” of Russian-owned companies and entities.

German Chancellor Olaf Scholz said that, during a meeting on Tuesday with Putin, he “made clear that any further violation of the territorial integrity of Ukraine will have high costs for Russia, politically, economically and geo-strategically”.

“And at the same time, I stressed that diplomacy won’t fail because of us,” Scholz added. “As much diplomacy as possible without being naïve, that is our aspiration, and we are using all channels of communication for that.”

Western leaders so far have not specified what precise Russian action would trigger sanctions. A French official who wasn’t authorised to be publicly named and spoke on condition of anonymity after Biden conferred with several counterparts on Friday said they were talking about an invasion of territory currently under the control of the government in Kyiv.

“It is in the event of an invasion of this territory that … the massive sanctions that we are talking about would be triggered,” the official said.

Parts of eastern Ukraine are under the control of pro-Russia separatists who have been fighting Ukrainian forces since 2014, the year Russia that annexed Ukraine’s Crimean Peninsula.

German Foreign Minister Annalena Baerbock, asked what Russian actions would trigger sanctions, didn’t offer any details after a meeting in Munich with her counterparts from the Group of Seven industrial powers and Ukraine.

“A breach of Ukraine’s integrity and sovereignty is a breach of Ukraine’s integrity and sovereignty,” Baerbock said. “You can’t say that one geographical part is a bit more Ukraine and another is a bit less Ukraine.”

She said Western officials had made clear that an actual invasion wasn’t the only possible scenario but “are prepared for every situation”.

Using a chess analogy, the German minister said: “If you present your next five moves in public, you won’t be particularly successful.” – AP