Russian Invasion Would Spur Wider Sanctions, Hungary Says

Hungarian Foreign Minister Janos Martonyi said any sign that Russian troops were crossing into eastern or southern Ukraine would be a trigger for the European Union to impose economic sanctions.

The EU, which is currently assessing the impact of broader penalties on Russian individuals and companies, will act if there is evidence of invasion, Martonyi told Bloomberg News in an interview today in Brussels.

“If Russian troops cross the border -- a military incursion or invasion -- into eastern or southern Ukraine, that would suddenly be a cause for launching stage three, economic sanctions, or targeted measures,” Martonyi said.

Russia, which NATO says has 40,000 troops massing on its border with Ukraine, denies involvement in provoking unrest in the former-Soviet state after annexing Crimea last month in the biggest standoff with the U.S. and EU since the Cold War.

“Territorial integrity, sovereignty, must be respected,” Martonyi said. “International law must be complied with. On that I don’t think any concession can be made.”

EU goverments yesterday said they will widen the EU’s list of sanctions targets to include people and possibly groups or companies responsible for the destabilization of eastern Ukraine. The EU blacklist now covers 55 Ukrainians and Russians.

Economic Sanctions

A threatened broader set of economic sanctions, so-called stage three, would have an impact on European economies, Martonyi said. Germany, Europe’s largest economy, had $89 billion in trade with Russia in 2012. By comparison, commerce between Russia and the U.S. amounted to about $38 billion in 2013. Europe also depends on energy from the east, with gas from Russia accounting for 30 percent and oil for about 35 percent of EU imports in 2011, according to EU data.

“You can speak about trade, you can speak about exports,” Martonyi said. “But there’s also energy supply, and energy supply would be jeopardized anyway in the case of economic sanctions because one might presume that that would be the counter measure taken by the Russians.”

Around 80 percent of Hungary’s gas comes from Russia, Martonyi said at the Center for European Policy Studies in Brussels today, and gas accounted for about 40 percent of Hungary’s total energy use.

The impact of economic sanctions on Russia, and Russian President Vladimir Putin’s potential retaliation, could have severe consequences on some EU countries, such as Hungary, Martonyi said.

“It’s a question of whether I can heat my house,” he said.

To contact the reporter on this story: Ian Wishart in Brussels at iwishart@bloomberg.net

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net Jones Hayden, Andrew Clapham

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