EU mulls sanctions on Putin's 'inner circle'

EU mulls sanctions on Putin's 'inner circle'

BRUSSELS - The European Union is considering beefing up sanctions against Russia by targeting President Vladimir Putin's inner circle but some member states are "very reluctant", EU diplomats said Wednesday.

A proposal seen by AFP that was circulated to member states by Britain this week calls on the bloc to increase pressure on Putin by sanctioning his "inner circle" or "money men" in response to the deepening crisis in Ukraine.

The EU this week added 15 Russians and Ukrainians to its Ukraine crisis sanctions list but "some governments want stronger measures immediately in order to increase the pressure on Moscow," said an EU diplomat speaking on condition of anonymity.

While London's proposal will be discussed at a closed-door meeting of ambassadors to the EU later Wednesday, "some member states are very reluctant to strengthen the measures and discussions are very difficult", said another diplomat.

If agreed, the move would represent a significant ratcheting up of action against Russia by Europe, where many countries hugely dependent on Moscow for energy and trade fear economic retaliation.

"Targeting Putin's inner circle will raise the personal risk to the leadership of pursuing aggression and provocation, thereby deterring Russian adventurism and encouraging a diplomatic solution," the British proposal says.

But hitting the Russian leader's close allies would be well short of full-scale economic sanctions against Russia's energy, mining and financial sector that could have far-reaching implications.

Among countries likely to favour targeting Putin cronies are Russia hardliners such as Sweden, Poland, the Czech Republic and the three Baltic states.

Others, notably from southern Europe, lean towards dialogue rather than action, with EU heavyweights France and Germany taking the middle ground.

The EU so far has imposed asset freezes and visa bans against 48 Russian officials, parliamentarians and military figures, and Ukrainian separatists, all targeted on the grounds of undermining or threatening Ukraine's territorial integrity.

Aiming at Putin's main allies therefore would mean changing or broadening the criteria set for imposing sanctions, which proponents say would give the bloc greater flexibility for further action in the future.

"Given the evident further escalation of Russian pressure on Ukraine there is a strong case for introducing more rigorous sanctions," the British proposal says.

These would continue to be so-called "Tier 2" or "Stage 2" sanctions - asset freezes or visa bans targeted at individuals or entities, the proposal adds.

EU leaders have threatened a third phase of economic sanctions if Moscow does not reverse course but are in fact deeply divided over any such move.

According to industry group, the Committee on Eastern European Economic Relations, German companies have 20 billion euros invested in Russia, from cars to supermarkets, and about 300,000 jobs in Germany are directly dependent on business with Russia.

EU nations rely on Russia for more than a quarter of their gas imports while German exports to Russia amount to around 25 per cent of total EU exports to Russia.

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