G7 leaders didn’t move the dial far last night, telling Russia it faced more damaging sanctions if it took any further action to destabilize Ukraine.
They will also shun Russia’s G8 summit in June and meet ”à sept” in Brussels, marking the first time since Moscow joined the group in 1998 that it will have been shut out of the annual summit.

There were some other interesting pointers. For one, the G7 agreed their energy ministers would work together to reduce dependence on Russian oil and gas. Could this lead to the United States exporting shale gas to Europe? A committee of U.S. lawmakers will hear testimony on Tuesday from those who favour loosening restrictions on gas exports.

Sanctions imposed so far may be limited but they are hitting investment and Russia’s currency and stock market. The economy is barely growing and the government said yesterday it now expected net capital outflows of up to $70 billion in the first quarter of the year.

The G7 leaders remain in The Hague for day two of a nuclear security summit and the EU leaders plus Barack Obama will reconvene in Brussels on Wednesday for the annual EU/U.S. summit. But the big moment of the day could come from the IMF which is due to wind up its work in Kiev and is expected to offer an economic reform and aid programme soon.

Aid for Kiev will also hurt Putin.

The U.S. and EU would row in behind any IMF package, helping Ukraine meet its debt obligations and begin the process of rebuilding. The EU has signed the political elements of an “association agreement” with Kiev, promising closer ties that will help draw it more closely into the heart of Europe.
That is precisely what Putin was trying to avoid.