WASHINGTON (AP) — Struggling to defuse the persistent crisis in Ukraine, both the U.S. and European Union imposed new economic sanctions on Russia Wednesday, with President Barack Obama declaring that Russian leaders must see that their actions supporting rebels "have consequences."
Though the American and European sanctions were coordinated, they nonetheless exposed fissures in what the West has tried to project as a united front in its monthslong effort to isolate Russian President Vladimir Putin.
Putin, sounding unperturbed, said the U.S. was only hurting itself.
The penalties announced by the White House were broad in scope, targeting two major Russian energy firms, a pair of powerful financial institutions, eight arms firms and four individuals. Leaders in Europe, which has a far deeper economic relationship with Russia than the U.S., were more restrained, ordering investment and development banks on the continent to suspend financing agreements with Moscow.
In a decision that could affect Russian oligarchs or members of the Kremlin inner circle, the EU leaders also asked the ministers to consider targeting people or companies involved in the unrest in Ukraine.
Even the U.S. penalties stopped short of the most stringent actions the West has threatened, which would entail fully cutting off key sectors of Russia's economy. But officials said those steps were still on the table if Russia fails to abide by the West's demands to stop support for pro-Russian insurgents who have destabilized swaths of eastern Ukraine.
"What we are expecting is that the Russian leadership will see once again that its actions in Ukraine have consequences, including a weakening Russian economy and increasing diplomatic isolation," Obama said as he announced the U.S. penalties from the White House.
Publicly undismayed, Putin said the new sanctions run counter to U.S. national interests because they put American companies that want to operate in Russia at a competitive disadvantage.
At a news conference in Brazil, Putin said through a translator: "They are undermining the positions of their energy companies." He said, "They made one mistake, and now they insist on making another one."
Until now, the U.S. and Europe have limited their sanctions on Europe to travel bans and asset freezes aimed at individuals and entities, including some with close ties to Putin. But those measures have done little to change Putin's calculus, with the Pentagon announcing Wednesday that Russian troops were again building up along the border with Ukraine. In Ukraine itself, pro-Russian rebels in the east have lost much ground but now seem to be hunkering down for what could be extended urban warfare.
Ukraine and the West have accused Russia of fomenting the insurgency by sending troops and weapons across its border with the former Soviet republic, something Moscow denies. The insurgency was sparked by Russia's annexation of the Crimean Peninsula from Ukraine earlier this year.
While Obama has put a premium on responding to the provocations in coordination with Europe, the White House has grown increasingly frustrated with the continent's reluctance to impose sanctions on Russian economic sectors. EU leaders fear such penalties could have negative impacts on their own economies given their close financial relationships with Russia.
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