EU eyes ban on buying Russian bonds

September 02, 2014 - 12:00:00 am

BRUSSELS: Europeans could be barred from buying new Russian government bonds under a package of extra sanctions over Moscow’s military role in Ukraine that European Union ambassadors were to start discussing yesterday, three EU sources said.

EU leaders decided at a summit on Saturday that the direct engagement of Russian troops in the war in eastern and southern Ukraine — still denied by Moscow — called for a stepping up of sanctions imposed so far unless Russia pulled its soldiers back.

German Chancellor Angela Merkel, who led the drive for a tougher EU response, said on Monday that Moscow’s behaviour in Ukraine must not go unanswered, even if sanctions hurt the German economy, heavily dependent on imported Russian gas.

“I have said that (sanctions) can have an impact, also for German companies,” Merkel told a news conference in Berlin.

“But I have to say there is also an impact when you are allowed to move borders in Europe and attack other countries with your troops,” she said. “Accepting Russia’s behaviour is not an option. And therefore it was necessary to prepare further sanctions.”

The leaders asked the executive European Commission to prepare further measures within a week, building on steps taken at the end of July, which targeted the energy, banking and defence sectors.

“I’m hearing that a ban on buying Russian government bonds could be in the next package,” an EU official familiar with the preparations said.

Tighter restrictions on dual use technologies with military as well as civilian applications could also figure, along with some more curbs on advance energy exploration equipment, the official said.

An EU diplomat said ambassadors of the 28 member states would hold an emergency meeting on Monday at 1300 GMT to start work on a “significant” package of further measures although no immediate decisions were expected. A further meeting is set for tomorrow.

The leaders said the Commission should include in the sanctions “every person and institution dealing with the separatist groups in the Donbass”, potentially leaving a very broad area that could be targeted.

Reuters

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