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EU at crossroads on Russia sanctions

Monday, 21 Jul, 2014 - 02:22

Pressure mounts on Europe to ratchet up sanctions on Russia over the downing of Malaysian passenger jet MH17. Ciara Sutton asks what form new sanctions would take - and whether they might impact Europe's economies.

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The piles of flowers grow outside Amsterdam's Schiphol airport - the departure location of the doomed Malaysian jet carrying 298 passengers, 193 of them Dutch. The plane reportedly downed by a missile fired by pro-Russian rebels in eastern Ukraine now lies at the heart of the crisis. As the fighting rages on, so does international pressure for the crisis to be resolved ... and for Russia to be held accountable. Britain, Germany and France say they should be ready to ratchet up sanctions on Russia. Foreign ministers meeting on Tuesday are expected to announce the measures. NAB's Tom Vosa says this time they will have a far bigger impact. (SOUNDBITE) (English) HEAD OF MARKET ECONOMICS, EUROPE AT NAB GROUP, TOM VOSA, SAYING: "Level three sanctions start to contact entire industries. So the entire energy and indeed the banking sector could get affected. We know certainly from moves that the U.S. have made in New York, that the U.S. would see any sanctions being extra-territorial and therefore anybody dealing with Russia is likely to get fined significantly." Russian President Vladimir Putin says Russia is committed to ending the crisis. But the leader is being criticised over the lack of access to the crash site for international investigators. Before the jet crashed last week, EU leaders had already agreed to sanction some Russian companies and block new loans to Russia. CEO of Dutch firm Philips, Frans van Houten, says a hit is inevitable. (SOUNDBITE) (English) FRANS VAN HOUTEN, CHIEF EXECUTIVE, PHILIPS CHIEF EXECUTIVE, SAYING: "It is already affecting the Russian economy obviously. And our own business results are down in that region. I think that's the reality we have to deal with and I would like to leave it at that.'' So far EU governments have been wary of potential retaliation from Russia, the bloc's biggest energy supplier. Baader Bank's Robert Halver. (SOUNDBITE) (German) HEAD OF CAPITAL MARKET ANALYSIS AT BAADER BANK, ROBERT HALVER, SAYING: "At a certain point Russia will consider counter sanctions. So there is a small danger of a commercial war. I hope we can prevent this as both sides would lose. We need to send chief diplomats to the front to solve the problem. That will take time, of course as keeping face is crucial for politicians." Despite the potential financial impacts for Europe, keeping face is exactly what they want to do. Britain says it's prepared to take an economic hit from the further sanctions against Russia because the costs of not acting would be greater.

EU at crossroads on Russia sanctions

Monday, 21 Jul, 2014 - 02:22

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