The European Union, as we exclusively reported yesterday, has agreed on a framework for sanctions against Russia, including travel restrictions and asset freezes, which goes further than many expected. The list of targeted individuals is still being worked on but will be ready for the bloc’s foreign ministers to look at on Monday.
Angela Merkel will speak to the German Bundestag about the standoff with Russia. Merkel has been cautious about imposing anything too tough as she tries to convince Vladimir Putin to agree to a “contact group” that would reopen communications between Moscow and Kiev. But yesterday she said measures would be imposed next week – after a Crimean referendum on joining Russia which the West says is illegal – unless diplomatic progress is made.
There is no sign of Vladimir Putin coming to the negotiating table and no question of western force being deployed. In Washington, Ukrainian Prime Minister Arseny Yatseniuk said his government was ready to negotiate over Moscow’s concerns for the rights of ethnic Russians in Crimea – a possible diplomatic avenue? The U.N. Security Council will discuss the crisis in an open meeting later.
Russia’s intervention in Crimea has focused minds in the EU on ending decades of dependence on Russian gas by developing its own energy supplies and pushing for greater access to U.S. resources. That will come up at next week’s summit of the bloc’s leaders. It’s clearly a long-term project but could be a hammer blow to the Russian economy if it succeeds.
Italy will dive into the bond market after Prime Minister Matteo Renzi presented a sweeping package of tax cuts, saying they would foster economic recovery without breaking EU budget deficit limits. Income tax will be reduced by a total of 10 billion euros annually for 10 million low and middle income workers which should give domestic demand a fillip.