The 28-nation European Union agreed Tuesday on stronger economic sanctions against Russia amid ongoing anger concerning the conflict in eastern Ukraine and the shooting down of Malaysia Airlines Flight 17, the great majority of whose passengers were Europeans.

As expected, the sanctions -- to be outlined in detail Wednesday -- will target selected sectors of the Russian economy, including energy, finance and defense. New arms deals, exports of energy and oil-drilling technologies, and sales of items with both civilian and military applications will be forbidden.

Access by Russian state-owned banks to Europe’s capital markets will also be restricted, which could have a ripple effect throughout the Russian economy. Also, eight more individuals and three more entities will be slapped with travel bans and asset freezes, for a total to date of 95 people and 23 entities.


FOR THE RECORD:
Ukraine: In the July 30 Section A, a photo caption accompanying an article about fighting in Ukraine and new European Union and U.S. sanctions against Russia referred to a Ukrainian city as both Lugansk (using the transliteration from Russian) and Luhansk (from Ukrainian). The Times generally uses Luhansk. —

The new measures represent a significant step up from the EU’s previous sanctions against Russia, which had hit only specific individuals and a handful of institutions with travel and asset freezes. Broadening the penalties to target whole sectors of the economy was kept in reserve as a last resort.

Despite U.S. impatience, European leaders had hesitated to slap tougher sanctions on Moscow for fear of harming their own struggling economies. However, their belief that Russian President Vladimir Putin has not only declined to rein in pro-Russian separatists in Ukraine but egged them on -- even after the crash of Flight 17 -- stiffened EU resolve to increase the pressure.

“The situation did not leave EU countries with any other option,” Finnish Prime Minister Alexander Stubbs said after EU ambassadors, including Finland’s, signed off on the new sanctions Tuesday afternoon at a meeting in Brussels.

Though the EU still hoped for a diplomatic solution to the crisis in eastern Ukraine, sending a strong signal of disapproval to the Kremlin was “now necessary,” Stubbs said, adding that EU officials tried to come up with a sanctions plan that evenly distributed the pain to be borne by EU member states.

France, for example, did not want to jeopardize a $1.6-billion deal to supply Moscow with two advanced warships; as a preexisting contract, it will not be affected by the new sanctions. Britain was leery of the effect of capital restrictions on London’s freewheeling financial sector. Germany and Italy enjoy strong trading relationships with Russia.

But leaders of all four countries held an unusual video conference call with President Obama and agreed to tighten the screws. Particularly crucial was the support of German Chancellor Angela Merkel, the EU’s most powerful leader, who has grown increasingly annoyed with what she sees as Putin’s broken promises and who now has the backing of key German business groups in imposing more aggressive sanctions.

In Britain, energy giant BP warned Tuesday that a toughened sanctions regime could have a negative effect on its earnings. BP owns about 20% of the Russian oil company Rosneft.

“If further international sanctions are imposed on Rosneft or new sanctions are imposed on Russia or other Russian individuals or entities, this could have an adverse impact on our relationship with and investment in Rosneft,” BP said in its semi-annual assessment of risks to its business.

EU President Herman Van Rompuy of Belgium issued a statement saying the sanctions decision "is meant as a strong warning: Illegal annexation of territory and deliberate destabilization of a neighboring sovereign country cannot be accepted in 21st century Europe."

"Furthermore," he added, "when the violence created spirals out of control and leads to the killing of almost 300 innocent civilians in their flight from the Netherlands to Malaysia, the situation requires urgent and determined response."

Van Rumpuy said Russian action to destabilize Ukraine "will bring heavy costs to its economy. Russia will find itself increasingly isolated by its own actions."

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