Financial News

  • 22 July 2014, 19:58

Russia Faces 'Hard-Hitting' Sanctions Over MH17

European Union foreign ministers are gathering in Brussels to discuss imposing further sanctions on Russia in the wake of the downing of flight MH17.

Pro-Russian separatists have been blamed by the West for shooting down the Malaysia Airlines plane, which was carrying 298 people when it came down in eastern Ukraine.

Britain hopes the meeting will lead to the implementation of extended sanctions on specific Russian businesses, organisations and individuals.

Broader sanctions, which could target wider sectors of the Russian economy, such as financial services, energy exports, trade and defence co-operation could also be discussed.

However, diplomats told the Reuters news agency that foreign ministers were unlikely to punish Russia beyond speeding up the imposition of individual sanctions that have already been agreed.

British Prime Minister David Cameron has called on Russian President Vladimir Putin to end his support for the fighters and warned Moscow it faced international isolation, including a "new range of hard-hitting economic sanctions".

Mr Cameron said in the House of Commons on Monday that Russia is facing a "defining moment".

He warned Europe would fundamentally change relations with Russia if Mr Putin continued to foment violence and instability in its neighbour.

Mr Putin has warned Western powers not to use the incident to advance "vested interests" at the expense of Moscow.

US officials say Russia risks being pushed into recession by the sanctions, citing data from the International Monetary Fund.

A European official told the Associated Press that the shooting down of the Boeing 777-200 has changed the thinking of some European nations that have been reluctant to impose tougher sanctions, including Germany and the Netherlands.

The official added that division remains in Europe, with some countries concerned further penalties could harm efforts to gain access to the crash site.

In a sign the West could struggle to come up with a united response, France came under pressure from the US and Britain over plans to deliver a second helicopter carrier to Russia.

Mr Cameron has urged EU countries to stop selling defence equipment to Russia, and said going ahead with the warship contract would be unthinkable in Britain.

US officials say they continue to raise the matter in conversations with the French.

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