David Cameron compared Russia’s hostility towards Ukraine with the build-up to the two world wars last night, as he warned economic sanctions could get tougher.
The Prime Minister likened the situation to Belgium and Poland ‘being trampled on’ before wars broke out in Europe last century.
Speaking to voters in Warrington, he said: ‘This year we are commemorating the 100th anniversary of the First World War, and that war in part was about the right of a small country, Belgium, not to be trampled on by its neighbours.
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'Unacceptable': Russian president Vladimir Putin’s actions to ‘undermine Ukraine’s sovereignty’ were last night denounced by the G7 nations – the UK, Canada, France, Germany, Italy, Japan and the United States
The Prime Minister likened the situation to Belgium and Poland ‘being trampled on’ before wars broke out in Europe last century.
Speaking to voters in Warrington, he said: ‘This year we are commemorating the 100th anniversary of the First World War, and that war in part was about the right of a small country, Belgium, not to be trampled on by its neighbours.
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'Unacceptable': Russian president Vladimir Putin’s actions to ‘undermine Ukraine’s sovereignty’ were last night denounced by the G7 nations – the UK, Canada, France, Germany, Italy, Japan and the United States
‘We had to learn that lesson all over again in the Second World War, when the same thing happened to Poland and Czechoslovakia and other countries.
‘In a way, this is what we see today in Europe. Ukraine is a country recognised by the United Nations, a country which has and should have every right to determine its own future ... it has the right not to have its territorial integrity impugned by Russia.’
‘In a way, this is what we see today in Europe. Ukraine is a country recognised by the United Nations, a country which has and should have every right to determine its own future ... it has the right not to have its territorial integrity impugned by Russia.’
Last night the G7 nations – the UK, Canada, France, Germany, Italy, Japan and the United States – denounced Russian president Vladimir Putin’s actions to ‘undermine Ukraine’s sovereignty’.
‘We once again condemn Russia’s illegal annexation of Crimea, and actions to de-stabilise eastern Ukraine. Those actions are unacceptable and violate international law,’ a statement said.
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The Prime Minister talks to workers in Warrington: He promised he was not about to start a war in Europe
Threatening further measures to cripple the Russian economy, Mr Cameron said: ‘It will be a tightening of the ratchet unless Mr Putin changes his approach.’
He added: ‘We are not about to launch a European war, we are not about to send a fleet to the Black Sea, we are not looking for a military confrontation.
'What we should do is use the economic powers we have, the European Union and the United States of America, to demonstrate to Russia that what it is doing is unacceptable.’
This week, Europe and the US agreed tough sanctions against Russian banks, defence and energy firms. Pictures emerged last night suggesting Russia has responded by moving more military enforcements to the Ukraine border.
‘We once again condemn Russia’s illegal annexation of Crimea, and actions to de-stabilise eastern Ukraine. Those actions are unacceptable and violate international law,’ a statement said.
+2
The Prime Minister talks to workers in Warrington: He promised he was not about to start a war in Europe
Threatening further measures to cripple the Russian economy, Mr Cameron said: ‘It will be a tightening of the ratchet unless Mr Putin changes his approach.’
He added: ‘We are not about to launch a European war, we are not about to send a fleet to the Black Sea, we are not looking for a military confrontation.
'What we should do is use the economic powers we have, the European Union and the United States of America, to demonstrate to Russia that what it is doing is unacceptable.’
This week, Europe and the US agreed tough sanctions against Russian banks, defence and energy firms. Pictures emerged last night suggesting Russia has responded by moving more military enforcements to the Ukraine border.
Nato 'unprepared' for Russia threat, say MPs
Pro-Russian militants in Ukraine. The MPs warned about the use of irregular militias.
Nato is poorly prepared for an attack on a member state from Russia, an influential group of MPs has warned.
The Commons Defence Committee said the recent Ukraine conflict showed "serious deficiencies" in Nato's preparedness to counter threats - and "radical reform" was needed.
The MPs said the risk of a conventional assault remained low, - but warned over methods such as cyber-attacks and the use of irregular militias.
Nato said it would study the findings.
The committee called for changes including:
And they said public opinion may not support the use of military force to honour Article 5 commitments in a confrontation with Russia.
"Nato is currently not well-prepared for a Russian threat against a Nato member state," the report said.
"A Russian unconventional attack, using asymmetric tactics - the latest term for this is 'ambiguous warfare' - designed to slip below Nato's response threshold, would be particularly difficult to counter."
'Too complacent'Tory MP Rory Stewart, who was elected chairman of the committee in May, said: "The risk of attack by Russia on a Nato member state, whilst still small, is significant. We are not convinced that Nato is ready for this threat.
"Nato has been too complacent about the threat from Russia, and it is not well-prepared.
"Even worse, the nature of Russian tactics is changing fast - including cyber-attacks, information warfare, and the backing of irregular 'separatist groups', combining armed civilians with Russian Special Forces operating without insignia,"
said Mr Stewart, a former soldier and diplomat who has worked in the Balkans, Afghanistan and Iraq.
"We have already seen how these tactics have been deployed by Russia and its proxies in Ukraine to destabilise a Nato partner state, annex part of its territory and paralyse its ability to respond."
Typhoon jets have already taken part in exercises in eastern Europe
The report said that while Nato had not seen Russia as a territorial threat for 20 years, recent events meant it was "forced to do so".
"Events in Ukraine this year, following on from the cyber attack on Estonia in 2007 and the invasion of Georgia by Russia in 2008, are a 'wake-up call' for Nato", it read.
"They have revealed alarming deficiencies in the state of Nato preparedness, which will be tough to fix."
The committee also called on the government to show leadership when it hosts a Nato summit in Wales in September.
The report added: "The UK government should take the lead in ensuring that the Nato summit addresses these threats in the most concrete and systematic fashion."
'Adapt to change'Nato spokeswoman Oana Lungescu said: "We have not seen the report by the UK Defence Select Committee but we'll study it carefully once it's published.
"As early as March, the Nato Secretary General Anders Fogh Rasmussen called Russia's military actions in and around Ukraine a wake-up call for the alliance and for the wider international community.
"He has also made clear that Nato must adapt to a changed security environment and that the Wales Summit in September will be an important milestone in that process.
"Nato has already taken measures to reinforce collective defence, especially for our eastern allies, with more planes in the air, more ships at sea, and more exercises on the ground.
"All 28 allies are contributing, and the United Kingdom is playing an important role in policing Baltic airspace and planned exercises in Poland."
The North Atlantic Treaty Organisation, which was formed in 1949, is predicated upon a series of collective security guarantees between its members.
The alliance has expanded widely in the past 15 years, admitting states that border Russia and three - Latvia, Lithuania and Estonia - which were once part of the Soviet Union.
'Future threats'Earlier this week, it emerged that the UK is to send a "full battle group" of 1,350 military personnel to take part in Nato manoeuvres in Poland to support allies in eastern Europe.
It is the UK's largest such commitment to the region since 2008.
Labour said the report underlined Nato's position as the "cornerstone" of UK defence policy and the "sole organisation for collective defence".
"The government must demonstrate UK leadership on the international stage at the upcoming Wales summit," said shadow defence secretary Vernon Coaker.
"Recalibrating Nato as a military and political alliance to deter future threats must be a priority for this government which has failed under David Cameron to think strategically about future UK defence capabilities."
Nato is poorly prepared for an attack on a member state from Russia, an influential group of MPs has warned.
The Commons Defence Committee said the recent Ukraine conflict showed "serious deficiencies" in Nato's preparedness to counter threats - and "radical reform" was needed.
The MPs said the risk of a conventional assault remained low, - but warned over methods such as cyber-attacks and the use of irregular militias.
Nato said it would study the findings.
The committee called for changes including:
- Establishing a continuous presence of Nato troops and military equipment in "vulnerable" Baltic states, including Estonia, Latvia and Lithuania
- Adding unconventional threats such as irregular militia and cyber-attacks to Nato's Article 5 commitment for all members to come to the aid of a member which is attacked
- "Dramatic" improvements to existing rapid reaction forces.
- Large-scale exercises involving military and political leaders from all Nato states
And they said public opinion may not support the use of military force to honour Article 5 commitments in a confrontation with Russia.
"Nato is currently not well-prepared for a Russian threat against a Nato member state," the report said.
"A Russian unconventional attack, using asymmetric tactics - the latest term for this is 'ambiguous warfare' - designed to slip below Nato's response threshold, would be particularly difficult to counter."
'Too complacent'Tory MP Rory Stewart, who was elected chairman of the committee in May, said: "The risk of attack by Russia on a Nato member state, whilst still small, is significant. We are not convinced that Nato is ready for this threat.
"Nato has been too complacent about the threat from Russia, and it is not well-prepared.
"Even worse, the nature of Russian tactics is changing fast - including cyber-attacks, information warfare, and the backing of irregular 'separatist groups', combining armed civilians with Russian Special Forces operating without insignia,"
said Mr Stewart, a former soldier and diplomat who has worked in the Balkans, Afghanistan and Iraq.
"We have already seen how these tactics have been deployed by Russia and its proxies in Ukraine to destabilise a Nato partner state, annex part of its territory and paralyse its ability to respond."
The report said that while Nato had not seen Russia as a territorial threat for 20 years, recent events meant it was "forced to do so".
"Events in Ukraine this year, following on from the cyber attack on Estonia in 2007 and the invasion of Georgia by Russia in 2008, are a 'wake-up call' for Nato", it read.
"They have revealed alarming deficiencies in the state of Nato preparedness, which will be tough to fix."
The committee also called on the government to show leadership when it hosts a Nato summit in Wales in September.
The report added: "The UK government should take the lead in ensuring that the Nato summit addresses these threats in the most concrete and systematic fashion."
'Adapt to change'Nato spokeswoman Oana Lungescu said: "We have not seen the report by the UK Defence Select Committee but we'll study it carefully once it's published.
"As early as March, the Nato Secretary General Anders Fogh Rasmussen called Russia's military actions in and around Ukraine a wake-up call for the alliance and for the wider international community.
"He has also made clear that Nato must adapt to a changed security environment and that the Wales Summit in September will be an important milestone in that process.
"Nato has already taken measures to reinforce collective defence, especially for our eastern allies, with more planes in the air, more ships at sea, and more exercises on the ground.
"All 28 allies are contributing, and the United Kingdom is playing an important role in policing Baltic airspace and planned exercises in Poland."
The North Atlantic Treaty Organisation, which was formed in 1949, is predicated upon a series of collective security guarantees between its members.
The alliance has expanded widely in the past 15 years, admitting states that border Russia and three - Latvia, Lithuania and Estonia - which were once part of the Soviet Union.
'Future threats'Earlier this week, it emerged that the UK is to send a "full battle group" of 1,350 military personnel to take part in Nato manoeuvres in Poland to support allies in eastern Europe.
It is the UK's largest such commitment to the region since 2008.
Labour said the report underlined Nato's position as the "cornerstone" of UK defence policy and the "sole organisation for collective defence".
"The government must demonstrate UK leadership on the international stage at the upcoming Wales summit," said shadow defence secretary Vernon Coaker.
"Recalibrating Nato as a military and political alliance to deter future threats must be a priority for this government which has failed under David Cameron to think strategically about future UK defence capabilities."
In 1936 Hitler ordered German troops to enter the Rhineland. At this point the German army was not very strong and could have been easily defeated. Yet neither France nor Britain was prepared to start another war.Hitler also made two important alliances during 1936. The first was called the Rome-Berlin Axis Pact and allied Hitler's Germany with Mussolini's Italy. The second was called the Anti-Comitern Pact and allied Germany with Japan.
Hitler's next step was to begin taking back the land that had been taken away from Germany. In March 1938, German troops marched into Austria. The Austrian leader was forced to hold a vote asking the people whether they wanted to be part of Germany.The results of the vote were fixed and showed that 99% of Austrian people wanted Anschluss (union with Germany). The Austrian leader asked Britain, France and Italy for aid. Hitler promised that Anschluss was the end of his expansionist aims and not wanting to risk war, the other countries did nothing.[h=3][/h]
Hitler did not keep his word and six months later demanded that the Sudetenland region of Czechoslovakia be handed over to Germany.Neville Chamberlain, Prime Minister of Britain, met with Hitler three times during September 1938 to try to reach an agreement that would prevent war. The Munich Agreement stated that Hitler could have the Sudetenland region of Czechoslovakia provided that he promised not to invade the rest of Czechoslovakia.
Hitler was not a man of his word and in March 1939 invaded the rest of Czechoslovakia. Despite calls for help from the Czechoslovak government, neither Britain nor France was prepared to take military action against Hitler. However, some action was now necessary and believing that Poland would be Hitler's next target, both Britain and France promised that they would take military action against Hitler if he invaded Poland. Chamberlain believed that, faced with the prospect of war against Britain and France, Hitler would stop his aggression. Chamberlain was wrong. German troops invaded Poland on 1st September 1939.
Hitler's next step was to begin taking back the land that had been taken away from Germany. In March 1938, German troops marched into Austria. The Austrian leader was forced to hold a vote asking the people whether they wanted to be part of Germany.The results of the vote were fixed and showed that 99% of Austrian people wanted Anschluss (union with Germany). The Austrian leader asked Britain, France and Italy for aid. Hitler promised that Anschluss was the end of his expansionist aims and not wanting to risk war, the other countries did nothing.[h=3][/h]
Hitler did not keep his word and six months later demanded that the Sudetenland region of Czechoslovakia be handed over to Germany.Neville Chamberlain, Prime Minister of Britain, met with Hitler three times during September 1938 to try to reach an agreement that would prevent war. The Munich Agreement stated that Hitler could have the Sudetenland region of Czechoslovakia provided that he promised not to invade the rest of Czechoslovakia.
Hitler was not a man of his word and in March 1939 invaded the rest of Czechoslovakia. Despite calls for help from the Czechoslovak government, neither Britain nor France was prepared to take military action against Hitler. However, some action was now necessary and believing that Poland would be Hitler's next target, both Britain and France promised that they would take military action against Hitler if he invaded Poland. Chamberlain believed that, faced with the prospect of war against Britain and France, Hitler would stop his aggression. Chamberlain was wrong. German troops invaded Poland on 1st September 1939.
[h=3]Failure of Appeasement[/h]Appeasement means giving in to someone provided their demands are seen as reasonable. During the 1930s, many politicians in both Britain and France came to see that the terms of the Treaty of Versailles had placed restrictions on Germany that were unfair. Hitler's actions were seen as understandable and justifiable.
When Germany began re-arming in 1934, many politicians felt that Germany had a right to re-arm in order to protect herself. It was also argued that a stronger Germany would prevent the spread of Communism to the west.
In 1936, Hitler argued that because France had signed a new treaty with Russia, Germany was under threat from both countries and it was essential to German security that troops were stationed in the Rhineland. France was not strong enough to fight Germany without British help and Britain was not prepared to go to war at this point. Furthermore, many believed that since the Rhineland was a part of Germany it was reasonable that German troops should be stationed there.
[h=3][/h]In May 1937, Neville Chamberlain became Prime Minister of Britain. He believed that the Treaty of Versailles had treated Germany badly and that there were a number of issues associated with the Treaty that needed to be put right. He felt that giving in to Hitler's demands would prevent another war.
This policy, adopted by Chamberlain's government became known as the policy of Appeasement. The most notable example of appeasement was the Munich Agreement of September 1938.
The Munich Agreement, signed by the leaders of Germany, Britain, France and Italy, agreed that the Sudetenland would be returned to Germany and that no further territorial claims would be made by Germany.
The Czech government was not invited to the conference and protested about the loss of the Sudetenland. They felt that they had been betrayed by both Britain and France with whom alliances had been made.
However, the Munich Agreement was generally viewed as a triumph and an excellent example of securing peace through negotiation rather than war.This famous picture shows Chamberlain returning from Munich with the paper signed by Hitler declaring 'Peace in our time.'
When Hitler invaded the rest of Czechoslovakia in March 1939, he broke the terms of the Munich Agreement. Although it was realised that the policy of appeasement had failed, Chamberlain was still not prepared to take the country to war over "..a quarrel in a far-away country between people of whom we know nothing." Instead, he made a guarantee to come to Poland's aid if Hitler invaded
When Germany began re-arming in 1934, many politicians felt that Germany had a right to re-arm in order to protect herself. It was also argued that a stronger Germany would prevent the spread of Communism to the west.
In 1936, Hitler argued that because France had signed a new treaty with Russia, Germany was under threat from both countries and it was essential to German security that troops were stationed in the Rhineland. France was not strong enough to fight Germany without British help and Britain was not prepared to go to war at this point. Furthermore, many believed that since the Rhineland was a part of Germany it was reasonable that German troops should be stationed there.
This policy, adopted by Chamberlain's government became known as the policy of Appeasement. The most notable example of appeasement was the Munich Agreement of September 1938.
The Czech government was not invited to the conference and protested about the loss of the Sudetenland. They felt that they had been betrayed by both Britain and France with whom alliances had been made.
However, the Munich Agreement was generally viewed as a triumph and an excellent example of securing peace through negotiation rather than war.This famous picture shows Chamberlain returning from Munich with the paper signed by Hitler declaring 'Peace in our time.'
When Hitler invaded the rest of Czechoslovakia in March 1939, he broke the terms of the Munich Agreement. Although it was realised that the policy of appeasement had failed, Chamberlain was still not prepared to take the country to war over "..a quarrel in a far-away country between people of whom we know nothing." Instead, he made a guarantee to come to Poland's aid if Hitler invaded
[h=1]Europe, U.S. Significantly Expand Sanctions Against Russian Economy[/h][h=2]Many Western Officials Don't Expect Putin to Withdraw Support of Pro-Russia Rebels in Ukraine[/h]
President Barack Obama said the U.S. is intensifying its economic sanctions against Russia, hitting Moscow's energy, arms and banking industries in response to what he said was President Vladimir Putin's continued fueling of violence in eastern Ukraine.
The U.S. and the European Union adopted sweeping economic sanctions against Russia on Tuesday to punish Moscow's unbending stance in the Ukraine conflict.
The question for the West now is whether the move will make Russian PresidentVladimir Putin more cooperative or prompt him to dig in.
The trade and investment restrictions that EU governments, after much agonizing, agreed upon mark a major escalation of sanctions against Russia, which so far have been mostly token measures targeting individuals. New measures hitting Russia's banks, oil industry and military could increase financial strains in its already sluggish economy while withholding technology that the nation's modernization relies on.
The U.S. followed the EU's move by announcing similar sanctions against Russian banks as well as the energy, arms and shipping sectors. President Barack Obamahailed Europe's adoption of its most significant sanctions yet against Moscow, saying the U.S. and EU steps would have "bigger bite."
The rift with Russia is "not a new Cold War," Mr. Obama said Tuesday. "What it is is a very specific issue related to Russia's unwillingness to recognize that Ukraine can chart its own path," he said.
[h=4]Market Talk[/h]Fresh Sanctions Keep Currencies Under Pressure New Russian sanctions are likely to keep European currencies under pressure, says Valentin Marinov at Citigroup. "The market is anxious about the growth impact of the measures not only in the case of Russia but EU as a whole," he says. The euro moves lower on the day while the ruble is trading around its weakest levels in 10 weeks. New sanctions are likely to include a ban on exports of so-called "dual use" goods; measures to prevent mainly state-owned Russian banks from accessing European capital markets and oil sector sanctions which could involve sale of drilling equipment. (chiara.albanese@wsj.com @chiaraalbanese)
Sanctions Likely Interrupt Russia GDP RecoveryThe EU's sanctions on Russia imposed Tuesday are more powerful than the combined sum of all the other sanctions imposed this year on Russia says Charlie Robertson, global chief economist at Renaissance Capital. "They [the sanctions] are likely to interrupt the positive upward momentum of the Russian GDP recovery. Russia benefits from the inflow of international capital and that has now been partly cut off to the state sector," Mr. Robertson says. He also expects Russian retaliation to Tuesday's measures, via a cut in government contracts for foreign firms or in the geopolitical sphere
As Moscow returned to the forefront of concern in Washington, U.S. lawmakers moved toward approval of a new American ambassador to Russia. The Senate Foreign Relations Committee voted Tuesday to approve Mr. Obama's nomination of John Tefft, who was previously ambassador to Ukraine, Georgia and Lithuania. The full Senate is expected to act soon.
Mr. Obama accused Russia of transferring military equipment to the rebels, massing troops at the border with Ukraine and firing artillery into Ukraine. He said Russia would achieve more influence in Ukraine by being a "good neighbor."
Asked whether the U.S. is considering military assistance to Ukraine, Mr. Obama said Ukraine's forces are better armed than the separatists. "The issue is how do we prevent bloodshed in eastern Ukraine…and the main tool that we have to influence Russian behavior at this point is the impact it's having on its economy," he said.
Economic growth in Russia is already stalled, and Russian and foreign investors have been pulling money out of the country. If markets see the new round of sanctions as a signal that Russia's economy is increasingly off limits, and that further measures may follow, it could have a chilling effect on financial and other business dealings with the country, analysts said.
"Unless you've got a very high tolerance for risk, no one is going into Russia," said Neil Dooley, an attorney at Steptoe & Johnson in London who advises companies on Russian sanctions issues.
The International Monetary Fund last week cut its growth forecast for Russia's economy this year to 0.2%. A year ago, the IMF expected Russia to grow by 3.8% in 2014. The gathering chill in Russia's international ties means "Russia's already weak growth could become clearly negative," said Adam Slater, senior economist at U.K.-based consultancy Oxford Economics.
Despite the growing economic squeeze on Russia—with its unpredictable fallout for the EU's own markets, trade and growth—many EU officials believe they have only limited influence over the Kremlin.
Some EU officials voiced fears on Tuesday that Mr. Putin appears to be preparing Russians for international isolation. In Russia too, analysts said Mr. Putin was more likely to increase aid to the rebels in Ukraine in response to Kiev's military offensive than he was to back down.
"There are no signs that we will soon get another chance to find a political solution" to the Ukraine conflict, said Gernot Erler, the German government's coordinator for Eastern European issues. The governments in Moscow and Kiev are both "digging in," he said.
"We've no longer heard any reasonable signals from Moscow" since the downing of Malaysia Airlines Flight 17, Mr. Erler said.
President Barack Obama said the U.S. is intensifying its economic sanctions against Russia, hitting Moscow's energy, arms and banking industries in response to what he said was President Vladimir Putin's continued fueling of violence in eastern Ukraine.
The U.S. and the European Union adopted sweeping economic sanctions against Russia on Tuesday to punish Moscow's unbending stance in the Ukraine conflict.
The question for the West now is whether the move will make Russian PresidentVladimir Putin more cooperative or prompt him to dig in.
The trade and investment restrictions that EU governments, after much agonizing, agreed upon mark a major escalation of sanctions against Russia, which so far have been mostly token measures targeting individuals. New measures hitting Russia's banks, oil industry and military could increase financial strains in its already sluggish economy while withholding technology that the nation's modernization relies on.
The U.S. followed the EU's move by announcing similar sanctions against Russian banks as well as the energy, arms and shipping sectors. President Barack Obamahailed Europe's adoption of its most significant sanctions yet against Moscow, saying the U.S. and EU steps would have "bigger bite."
The rift with Russia is "not a new Cold War," Mr. Obama said Tuesday. "What it is is a very specific issue related to Russia's unwillingness to recognize that Ukraine can chart its own path," he said.
[h=4]Market Talk[/h]Fresh Sanctions Keep Currencies Under Pressure New Russian sanctions are likely to keep European currencies under pressure, says Valentin Marinov at Citigroup. "The market is anxious about the growth impact of the measures not only in the case of Russia but EU as a whole," he says. The euro moves lower on the day while the ruble is trading around its weakest levels in 10 weeks. New sanctions are likely to include a ban on exports of so-called "dual use" goods; measures to prevent mainly state-owned Russian banks from accessing European capital markets and oil sector sanctions which could involve sale of drilling equipment. (chiara.albanese@wsj.com @chiaraalbanese)
Sanctions Likely Interrupt Russia GDP RecoveryThe EU's sanctions on Russia imposed Tuesday are more powerful than the combined sum of all the other sanctions imposed this year on Russia says Charlie Robertson, global chief economist at Renaissance Capital. "They [the sanctions] are likely to interrupt the positive upward momentum of the Russian GDP recovery. Russia benefits from the inflow of international capital and that has now been partly cut off to the state sector," Mr. Robertson says. He also expects Russian retaliation to Tuesday's measures, via a cut in government contracts for foreign firms or in the geopolitical sphere
As Moscow returned to the forefront of concern in Washington, U.S. lawmakers moved toward approval of a new American ambassador to Russia. The Senate Foreign Relations Committee voted Tuesday to approve Mr. Obama's nomination of John Tefft, who was previously ambassador to Ukraine, Georgia and Lithuania. The full Senate is expected to act soon.
Mr. Obama accused Russia of transferring military equipment to the rebels, massing troops at the border with Ukraine and firing artillery into Ukraine. He said Russia would achieve more influence in Ukraine by being a "good neighbor."
Asked whether the U.S. is considering military assistance to Ukraine, Mr. Obama said Ukraine's forces are better armed than the separatists. "The issue is how do we prevent bloodshed in eastern Ukraine…and the main tool that we have to influence Russian behavior at this point is the impact it's having on its economy," he said.
Economic growth in Russia is already stalled, and Russian and foreign investors have been pulling money out of the country. If markets see the new round of sanctions as a signal that Russia's economy is increasingly off limits, and that further measures may follow, it could have a chilling effect on financial and other business dealings with the country, analysts said.
"Unless you've got a very high tolerance for risk, no one is going into Russia," said Neil Dooley, an attorney at Steptoe & Johnson in London who advises companies on Russian sanctions issues.
The International Monetary Fund last week cut its growth forecast for Russia's economy this year to 0.2%. A year ago, the IMF expected Russia to grow by 3.8% in 2014. The gathering chill in Russia's international ties means "Russia's already weak growth could become clearly negative," said Adam Slater, senior economist at U.K.-based consultancy Oxford Economics.
Despite the growing economic squeeze on Russia—with its unpredictable fallout for the EU's own markets, trade and growth—many EU officials believe they have only limited influence over the Kremlin.
Some EU officials voiced fears on Tuesday that Mr. Putin appears to be preparing Russians for international isolation. In Russia too, analysts said Mr. Putin was more likely to increase aid to the rebels in Ukraine in response to Kiev's military offensive than he was to back down.
"There are no signs that we will soon get another chance to find a political solution" to the Ukraine conflict, said Gernot Erler, the German government's coordinator for Eastern European issues. The governments in Moscow and Kiev are both "digging in," he said.
"We've no longer heard any reasonable signals from Moscow" since the downing of Malaysia Airlines Flight 17, Mr. Erler said.
interesting analogy, although I don't see two sovereign nations like Russia and the USA (or the west) going to war in the modern era. The consequences would be far to catastrophic. I can see Russia expanding it's imperialistic actions in the face of weak international leadership.
