The U.S. joined the European Union in stiffening sanctions on Russia over Ukraine, as the 28-member bloc offered to ease the restrictions once the Kremlin makes a good-faith effort to end the conflict.

The U.S. will “deepen and broaden” measures against Russia’s financial, energy, and defense industries, President Barack Obama said in a statement today, adding that the sanctions will take effect tomorrow and details will be released then. The EU said it would also enact its latest round of economic restrictions tomorrow. Europeis acting against a peaceful solution in Ukraine, the Russian Foreign Ministry said.

The moves raise the level of confrontation and follow reprisals last month by Russian President Vladimir Putin with a ban on a range of food imports after an earlier round of U.S. and European penalties. Facing the most significant action against his country since the fall of the Berlin Wall, Putin denies any involvement in the fighting that broke out after he annexed Crimea in March and says Russia’s Cold War adversaries are to blame for the standoff.

“We have always stressed the reversibility and scalability of our restrictive measures,” EU President Herman Van Rompuy said in a statement from Brussels. A review of the cease-fire in eastern Ukraine by the end of September may lead to EU “proposals to amend, suspend or repeal the set of sanctions in force, in all or in part.”

Ending days of wrangling, representatives of the EU governments agreed to impose curbs on European assistance for Russian oil exploration and production and on the financing of Russian defense and energy companies. The EU also slapped travel bans and asset freezes on 24 more people accused of destabilizing Ukraine, bringing the total to 119.

David Fuller's view

Sanctions and the inevitable counter moves that we have seen from Russia are understandably inconvenient and painful for all parties, but preferable to military war.  They are also a medium to longer-term strategy so it is premature to say that they are not working. 

However, reading the article above, EU President Herman Van Rompuy’s comments sound like the novice, underfunded gambler making his last ante while simultaneously announcing that he will fold in the next round.  Instead, he should indicate that sanctions will continue to be tightened until Russia backs down. Unfortunately, his comments are more likely to encourage Putin. 

Putin’s policies ensure that Russia’s economic position is vulnerable, but so is Europe’s.  However, Russia is in a position of isolation relative to the European Union.