Ukraine edges towards EU as West-Russia struggle deepens

Ukraine edges towards EU as West-Russia struggle deepens
Russia's President Vladimir Putin (R) speaks with Russian Union of Industrialists and Entrepreneurs (RSPP) president Alexander Shokhin (L) at an annual congress of the union in Moscow on March 20, 2014.

BRUSSELS - Ukraine was to take a step closer towards the EU on Friday after the European bloc and the US put in place sanctions on Russian figures close to President Vladimir Putin as punishment for Crimea's annexation.

Moscow has said it will retaliate by issuing its own list of sanctions against senior US officials but there were already signs of the harsher toll Russia was having to bear as the crisis rumbled into a new phase.

Fitch on Friday followed fellow ratings agency Standard & Poor's in downgrading Russia's credit rating outlook to negative from stable because of the growing risk due to the West's sanctions.

"Since US and EU banks and investors may well be reluctant to lend to Russia under the current circumstances, the economy may slow further and the private sector may require official support," Fitch said in a statement.

Europe and the United States on Thursday imposed sanctions on several high-ranking figures in Russia.

They were punishment for a Russian-engineered referendum in Crimea last Sunday that saw most voters opting to have the peninsula separated from Ukraine and absorbed into the Russian Federation. Russia's upper house of parliament was to ratify that on Friday.

US President Barack Obama announced the new round of punitive measures against 20 Russian lawmakers and senior government officials, in addition to 11 individuals already targeted. Obama said Russia risked further isolation if it did not reverse course.

Among those named were top businessmen close to President Vladimir Putin such as billionaires Gennady Timchenko, Arkady Rotenberg and Boris Rotenberg plus a bank used by close associates.

In Brussels, European Union leaders slapped an asset freeze and travel ban on 12 more Russians and Ukrainians, bringing to 33 the number of figures targeted by the European bloc. The dozen new figures were to be identified on Friday. European Council president Herman Van Rompuy said "some are really highly-placed".

The 28-nation bloc also cancelled an EU-Russia summit planned for June and called for the dispatch of international or EU monitors to Ukraine.

Moscow responded to the US move by launching sanctions against nine US officials, including ranking political figures and presidential aides.

"There should be no doubt: each hostile attack will be met in an adequate manner," the Russian foreign ministry said.

There was no immediate Russian response to the EU sanctions.

Europe's leaders stopped short of wider economic sanctions but insisted they were ready to ratchet up the pressure in case of further signs of Russian aggression.

"If there's any further destabilisation in Ukraine, then there should be further wide ranging measures taken," said British Prime Minister David Cameron.

But with some EU nations are heavily dependent on Russian oil and gas. Consequently, the bloc is divided on how far it should go, and many members are reluctant to raise the economic stakes.

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