U.S., EU Warn on Sanctions as Russia Says Economy Hurting

The U.S. and the U.K. joined the European Union in threatening to tighten sanctions against Russia, which said yesterday that the measures imposed so far will help prevent its economy from growing next year.

Speaking minutes apart, U.K. Prime Minister David Cameron and U.S. State Department spokeswoman Jen Psaki blamed Russia yesterday for continuing to arm separatist rebels in eastern Ukraine, where a cease-fire has crumbled over the past week. Russian President Vladimir Putin, who briefly met his U.S. counterpart Barack Obama at a summit in Beijing yesterday, has denied military involvement in the conflict.

The U.S. and its allies are stepping up criticism of Russia after a Nov. 2 election by the self-proclaimed separatist republics of eastern Ukraine’s Donetsk and Luhansk regions raised tensions and threatened to plunge the region into open warfare. Russia’s actions pose a “grave danger to the rest of Europe,” Cameron said.

“Russia’s illegal actions are destabilizing a sovereign state and violating its territorial integrity,” Cameron said in a speech in London’s financial district. “We shouldn’t need to be reminded of the consequences of turning a blind eye when big countries in Europe bully smaller countries.”

Supporting Separatists

Cameron said that while he doesn’t believe there’s a military solution to the conflict, economic sanctions imposed on Russian individuals, companies and industries after Putin’s March annexation of Crimea are having an effect. The U.K. will “keep upping the pressure,” he said.

In Washington, Psaki said the “costs to Russia will rise” if Putin ignores commitments signed under the Minsk cease-fire and

“If Russia is truly committed to Minsk and peace in Ukraine, it will stop fueling the fire with new weapons and support for separatists, and withdraw all Russian military personnel and equipment from Ukraine,” Psaki said.

Their comments echoed those from EU foreign policy chief Federica Mogherini, who told German lawmakers earlier yesterday that sanctions against the government could increase if the situation escalated militarily, according to Norbert Roettgen, a member of parliament from German Chancellor Angela Merkel’s party, who was present at the closed-door meeting.

Rebel Visit

Andrei Purgin, deputy premier of the self-proclaimed Donetsk People’s Republic visited the Federation Council in Russia’s upper house of parliament yesterday. He told the Russian senators that high turnout at the Nov. 2 votes “is a sign people trust the current authorities.”

“Purgin isn’t the first separatist representative to travel to Moscow, but his visit comes in the context of escalating violence,” Otilia Dhand, an analyst at Teneo Intelligence in London, said yesterday by e-mail. “Purgin’s visit points to what will probably follow afterward: the consolidation of separatist territorial control with Moscow’s support.”

Purgin was joined in Moscow by Alexei Karyakin, chairman of the self-proclaimed Luhansk People’s Republic’s Supreme Council. The rebels there will create a fully functioning state before deciding whether to try to join Russia, Karyakin said.

The sanctions have combined with low oil prices to push Russia to the verge of its second recession in five years. The central bank in Moscow said yesterday that the economy will probably stagnate in 2015.

Sliding Ruble

In a bid to prop-up the sliding ruble, which is the world’s worst-performing currency against the dollar over the past three months with a 21 percent plunge, the bank eliminated the ruble’s trading band and said it would limit local-currency funding to ward off speculators. The currency strengthened 2.3 percent against the dollar at 7:16 p.m. in Moscow.

At least 4,035 people have been killed and 9,336 wounded in the Ukraine conflict, according to United Nations estimates. Fighting is threatening to return to the same open warfare that broke out after the February ouster of Russian-backed President Viktor Yanukovych and the takeover of Crimea.

The rebels are attacking Ukrainian positions using tanks, artillery and mortars, military spokesman Andriy Lysenko said yesterday in Kiev. Russia is continuing to send personnel and arms to the militants, according to Lysenko.

After Ukraine said Russia was moving troops across its border into rebel-held territory, the Organization for Security and Co-operation in Europe said in a Nov. 8 statement that convoys of unmarked trucks and tanks were seen in the city of Donetsk and nearby Makeevka.

Those vehicles belong to the Donetsk People’s Republic, Russian state news service RIA Novosti reported, citing Eduard Basurin, a deputy commander for the insurgents. The column was moving for “tactical reasons,” he was quoted as saying.

German Foreign Ministry spokeswoman Sawsan Chebli said the information about the convoy is difficult to verify.

“There are reports that separatists again secretly brought material into the combat zone,” she told reporters yesterday at a government news briefing in Berlin. “We have no hard independent evidence of that.”

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