Moscow Working on Response to Western Sanctions

Send in e-mailSend in e-mail
Send in e-mailSend in e-mail
Valentina Matviyenko, sitting by Putin's side, Russia, April 28, 2014.Credit: AP

Russia is working on a response to new sanctions imposed on Moscow by the United States and the European Union over the crisis in Ukraine, Interfax news agency quoted the speaker of the upper house of parliament as saying.

"After the second wave of sanctions, the government is developing measures in response, first evaluating the potential damage to our economy," Interfax quoted Federation Council speaker Valentina Matviyenko as saying. "Such unfriendly attacks ... cannot be left without a response and I believe there must certainly be a response."

The new sanctions enforced by the West since Monday are meant to penalize Russia for inciting violence and unrest in Ukraine. The White House said on Monday that Moscow's part in purposefully destabilizing the region is indisputable and that more severe sanctions will be levied if Russian provocation continues.

Western countries say sanctions are already having an effect on Russia by scaring investors into pulling out capital. The central bank has raised interest rates to support the rouble, and Russian firms are finding it harder to raise funds.

Gazprom, headed by Alexei Miller, an ally of Putin, and its managers have not been hit by U.S. or EU sanctions.

But the company, which meets a sizeable amount of Europe's demand for gas, said a pricing row with the new government in Kiev could potentially lead to a disruption of its gas exports to the rest of Europe through pipelines crossing Ukraine.

"An expansion of the U.S., EU and other sanctions programs could adversely impact operations and the financial condition of the Gazprom Group," it said in a report following publication of its 2013 financial results.

Long seen as a tool of Russian foreign policy, Gazprom has threatened to cut supplies to Ukraine over an unpaid gas bill it puts at more than $2 billion and warned this could lead to reduced deliveries to clients in Europe.

Click the alert icon to follow topics: