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EU Readies Russia Sanctions as Ukraine Warns of Invasion

Ukrainian President Petro Poroshenko. Photographer: Krisztian Bocsi/Bloomberg
Ukrainian President Petro Poroshenko. Photographer: Krisztian Bocsi/Bloomberg

Aug. 30 (Bloomberg) -- The European Union moved to slap tougher sanctions on Russia as Ukrainian President Petro Poroshenko said hundreds of foreign tanks are operating in his country and pleaded for EU help.

“We are close to the point of no return,” Poroshenko told reporters in Brussels today during a summit of EU leaders. “Thousands of foreign troops and hundreds of foreign tanks are now on the territory of Ukraine.”

EU heads of state and government selected Polish Prime Minister Donald Tusk as the bloc’s next president and Italian Foreign Minister Federica Mogherini as chief diplomat after a bitter contest that showed the 28-nation EU’s divisions on how to deal with the Kremlin. Tusk has pushed for tougher sanctions on Russia while Mogherini has favored diplomacy. Leaders also met with Poroshenko.

The summit took place as Ukraine’s armed forces are retreating in some areas after NATO said Russia deployed troops and advanced equipment in Ukraine. “We have many places where the situation is difficult now,” Oleksandr Danylyuk, an adviser for Ukraine’s defense minister, told reporters in Kiev today. Russia denies that it’s involved in the war in eastern Ukraine.

Russia Sanctions

EU leaders will say they’re ready to impose new sanctions on Russia, according to draft summit conclusions obtained by Bloomberg News. “Sanctions will certainly be strengthened,” French President Francois Hollande said today. Finland’s Prime Minister Alexander Stubb said he expects leaders to make a decision in principle and let European Commission officials work out concrete measures, as they’ve done on previous occasions.

The EU and the U.S. already have slapped visa bans and asset freezes on Russian individuals and companies, and since July have imposed steadily tougher sanctions targeting the country’s energy, finance and defense industries.

Leaders disagreed about possible military assistance to Ukraine, with Lithuanian President Dalia Grybauskaite telling reporters before the meeting: “We need militarily to support and send military materials to Ukraine.”

For British Prime Minister David Cameron, this isn’t the way to go, a U.K. official said. The U.K. expects the EU to expand penalties in areas where existing sanctions are already in place, particularly in defense, financial and energy industries, the official said.

OSCE Talks

Poroshenko called for military and technical assistance from the EU. He said there will be a trilateral contact group meeting on Monday with the Organization for Security and Cooperation in Europe ambassador, ex-Ukrainian President Leonid Kuchma and Russian ambassador Mikhail Zurabov.

Talks will focus on Ukrainian hostages held in Russia, the OSCE monitoring mission, and “I cross my fingers, I hope it will be a cease-fire,” he said, adding that he expects to publish a draft peace plan next week.

European Commission President Jose Barroso said that more than 1 billion euros in loans could be released to Ukraine in the coming months. This is part of the 11 billion euro package announced earlier.

“We are ready to consider further financial assistance should additional needs be identified by the International Monetary Fund during its next review mission,” he said.

‘Intense’ Battles

Fighting continued today across easternmost Ukraine with “intense” battles in the Donetsk districts of Petrovsky and Kuibyshevsky, the city council said on its website.

Twenty-eight Ukrainian soldiers withdrew from a rebel encirclement near Ilovaysk and the troop pullout from the area is continuing, the Interior Ministry in Kiev and Ukrainian military spokesman Andriy Lysenko said.

Government forces destroyed five separatist military vehicles and six Grad multiple rocket launchers. A Ukrainian Su-25 ground attack plane was shot down by a Russian missile, the Defense Ministry said in a Facebook posting.

The death toll in the conflict is almost 2,600, the United Nations said. A total of 765 Ukrainian troops have been killed in the fighting, the government said. Seventy-five rebels have been killed in the past 24 hours, Lysenko said.

Ukrainian Prime Minister Arseniy Yatsenyuk has called for parliament in Kiev to consider North Atlantic Treaty Organization membership to protect against Russia seizing more territory after its annexation of Crimea.

NATO Secretary General Anders Fogh Rasmussen this week reaffirmed a 2008 Bucharest summit pledge that “Ukraine will become a member of NATO” if it so wishes and provided it fulfills the necessary criteria.

Poroshenko will attend a Sept. 4-5 NATO summit in the U.K.

To contact the reporters on this story: Daryna Krasnolutska in Brussels at dkrasnolutsk@bloomberg.net; Ewa Krukowska in Brussels at ekrukowska@bloomberg.net; Ian Wishart in Brussels at iwishart@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net; Alan Crawford at acrawford6@bloomberg.net Leon Mangasarian, Patrick Henry

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