G-7 Warns Russia on Crimea Takeover, Threatens New Sanctions

The U.S. and its allies accused Russia of trampling on international law by moving to annex Ukraine’s Crimea region, saying the Kremlin will face stiffer sanctions unless it pulls back troops and enters talks.

The Group of Seven countries called on President Vladimir Putin to “immediately halt” efforts to pry Crimea away from Ukraine’s government, to reduce Russian forces to pre-crisis numbers and to allow international monitors and mediation.

“The annexation of Crimea could have grave implications,” the G-7 said in a statement e-mailed today in Washington and other member-state capitals. “Should the Russian Federation take such a step, we will take further action, individually and collectively.”

Tension is mounting between the Kremlin and the G-7 as the clock ticks toward Crimea’s March 16 referendum on reuniting with Russia, part of Putin’s efforts to reassert authority over border states that were once in the Soviet Union. Crimea can be folded into Russia within two months in the event of a “yes” vote, the region’s prime minister, Sergei Aksenov, said in an interview today in the capital, Simferopol.

With Ukraine’s interim Prime Minister Arseniy Yatsenyuk set to meet President Barack Obama in Washington today, the G-7 said that a vote by Crimea to break away “would have no legal effect” and wouldn’t be diplomatically recognized.

Asset Freezes

European Union foreign ministers meet March 17 to consider asset freezes and travel bans on Russian political and business figures seen by the EU to have instigated and profited from the Russian takeover of Crimea.

U.K. Prime Minister David Cameron stressed the idea of visa bans, telling reporters on a flight to Jerusalem that Europe will target “people who’ve been pushing for the unacceptable steps that have been taken.”

German Chancellor Angela Merkel is due in Warsaw today to discuss what the EU should do “when it’s evident Russia is not going to back down,” Polish Prime Minister Donald Tusk said in an interview with Polish Radio One.

Russian gas is key to Germany’s energy mix as it weans itself off nuclear power and pursues more renewable sources. Tusk on March 10 said European efforts to fight climate change could pose a “threat to Europe’s security and sovereignty,” and said that he’ll bring the matter up with Merkel today.

‘Trade War’

Putin’s moves to destabilize Ukraine have exposed simmering divisions within Europe over how to deal with the Kremlin. Russia already occupies parts of Moldova and Georgia, two countries seeking closer economic ties with the EU.

A disruption of trade with Russia would cost Germany more than other EU countries, the BGA lobby of exporters and wholesalers said. About 6,200 companies generate exports of 36 billion euros ($49.9 billion) and imports of 40.4 billion euros in trade with Russia, it said.

“The result of a trade war would be painful for the German economy, but life-threatening for the Russian economy,” Anton Boerner, head of the lobby group, told reporters in Berlin.

Russia continued to deploy troops along Ukraine’s eastern border and stepped up its denunciations of Ukraine’s new government as illegitimate, accusing the West of abetting the ouster of the pro-Kremlin president, Viktor Yanukovych.

Today’s statement was the first since the Group of Seven -- the U.S., U.K., Germany, France, Italy, Japan and Canada -- froze Russia out of what had been known as the Group of Eight since 1998. The seven said the G-8 won’t be reincarnated until it “is able to have a meaningful discussion.”

“We need to be tough with Russia but not go looking for a fight,” Tusk said. “Someone cruising for a bruising will probably get one.”

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