It’s a difficult balancing act for Europe, which wants to make Russia pay for its aggression but fears the economic fallout from new, harsher trade sanctions by the West.
Europe is Russia’s largest trading partner and therefore has huge sway over Russia’s shaky economy.
Economists say the U.S. risks appearing weak without support from Europe. But Europe is far from ready to levy penalties against Moscow that would undercut its own financial stability and possibly endanger its main source of energy.
President Barack Obama has signed orders that would allow the U.S. to penalize key Russian industries. European Union foreign ministers are set to meet Monday to decide what additional penalties to impose if Russia continues to ignore the West’s warnings.
Assistant Secretary of State Victoria Nuland said last week that U.S. and EU sanctions now in place are “biting” and “pinching” the Russian economy, “and we’re now considering further measures.”
Nuland said Moscow has spent an estimated $25 billion to bolster the ruble over the last few weeks since sanctions were introduced. Russia suffered more capital outflow in the first three months of 2014 than the $62.7 billion it lost for all of last year, she said.
The next round probably will expand the list of high-ranking Russians whose Western assets have been frozen.