Turkey has been threatened with sanctions by
the EU if it continues “illegal drilling” in waters near Cyprus in
the eastern Mediterranean.
The warning came at an EU summit in Brussels.
EU Commission President Jean-Claude Juncker called Turkey’s actions
On June 20, Turkey launched the Yavuz, a second drilling ship for natural
gas and oil prospecting off Cyprus.
The Republic of Cyprus is an EU member, but the breakaway north is
The European Council called on Turkey to “show restraint, respect the
sovereign rights of Cyprus and refrain from any such actions”.
The statement said: “The European
Council endorses the invitation to the [EU] Commission and the EEAS [EU foreign
affairs service] to submit options for appropriate measures without delay,
including targeted measures.”
The self-declared Turkish Republic of Northern Cyprus is recognized only by
Turkey, and is internationally isolated.
Turkey said it was drilling inside
its continental shelf, complying with international law.
A Turkish drilling ship, the Fatih,
had been anchored west of Cyprus since early May and had begun drilling, the
Turkey is a candidate for EU
membership but its negotiations are currently frozen. The EU Commission has
said President Recep Tayyip Erdogan’s government has backtracked on pledges to
improve justice and the rule of law. The Turkish government has purged state
institutions since an abortive coup attempt against Recep Tayyip Erdogan in
Greek PM Alexis Tsipras said the
threatened EU measures “are against companies and individuals, a possible
EU accession process freeze and measures with significant economic
He said at Brussels summit: “These will take place unless Turkey
stops its illegal operations inside the Exclusive Economic Zone of Cyprus.”
Turkey – a key NATO partner for the
West – has extensive trade ties with the EU and has not yet been hit with EU
sanctions, unlike Russia.
The US has also threatened Turkey with sanctions if President Erdogan goes ahead with a deal to buy S-400 air defense missiles from Russia.
The EU will to impose further sanctions on Russia on September 12 over its role in the Ukraine crisis, diplomats say.
The move is aimed at maintaining pressure on Russia, the sources said.
Russia says it is preparing a response “commensurate with the economic losses” caused by the EU sanctions.
NATO says Russia still has about 1,000 heavily armed troops in eastern Ukraine – where pro-Russian rebels are fighting – and about 20,000 near the border.
The new sanctions are expected to tighten access to Western loans, especially for big Russian state oil companies, and expand a blacklist of Russian officials subject to visa bans and asset freezes. More rebel leaders will also go on that list.
Russian Foreign Ministry spokesman Alexander Lukashevich called the new sanctions “an absolutely unfriendly step”.
The EU decision followed a conference call involving a number of European leaders.
The member states struggled to agree on how to factor in the fragile truce between Ukrainian troops and pro-Russian rebels. It took effect on September 5 and appears to be holding despite some sporadic shooting.
The EU will to impose further sanctions on Russia over its role in the Ukraine crisis
The rouble fell to a new low of 37.57 to the dollar on September 11, after news about the EU sanctions broke. It also fell against the euro.
Western leaders and Kiev accuse Russia of helping the separatists in eastern Ukraine with regular troops and sophisticated weapons including tanks. Moscow denies the allegations.
The separatists have recently made big gains in the eastern Donetsk and Luhansk regions. The fighting has killed at least 3,000 people since April.
At urgent talks among 28 member states in Brussels on Wednesday, Germany pressed for the sanctions to be put into effect.
Other countries said they wanted to wait while the cease-fire continued to hold.
The EU leaders agreed on Thursday that the sanctions should take effect “by the end of the week”, according to Reuters.
They will be published in the official journal of the EU, which puts them into effect.
The package was finalized on September 5, but its implementation was delayed because of the cease-fire agreed on the same day.
The new sanctions will target Russian oil companies Rosneft and Transneft and the petroleum unit of state gas monopoly Gazprom.
Their access to financial markets will be restricted – a serious matter for Rosneft, which last month asked the Russian government for a $42 billion loan.
The measures also cover dual-use goods which can be used for military purposes, defense equipment and some other sensitive technologies.
Russian PM Dmitry Medvedev has warned that Russia might shut its airspace to European passenger planes, a move that “could drive many struggling airlines into bankruptcy”.
Russia has been given by the European Union one week to reverse course in Ukraine or face new sanctions.
European Council President Herman Van Rompuy said the EU was working urgently on further restrictive measures.
Earlier, Ukrainian President Petro Poroshenko said his country was “close to a point of no return – full scale-war” with Russia.
Russia denies Western accusations that its forces have illegally crossed into Ukraine to support separatists there.
Pro-Russian rebels have made gains against Ukrainian troops in recent days in the eastern Donetsk and Luhansk regions.
Some 2,600 people have died in fighting.
The conflict in the east erupted in April following Russia’s annexation of Ukraine’s southern Crimea peninsula a month before.
Western leaders say there is clear evidence of regular Russian military units operating inside Ukraine with heavy weapons.
Speaking after a summit in Brussels, Herman Van Rompuy said the EU “stands ready to take further significant steps in light of the evolution of the situation on the ground.
“Everybody is fully aware that we have to act quickly.”
Herman Van Rompuy did not specify the nature of further sanctions, but said the proposals would be ready within a week.
The US applauded the EU’s move.
Speaking in Brussels, President Petro Poroshenko said Ukraine was a victim of military aggression and terror (photo AFP)
“We welcome the European Council’s consensus today to show strong support for Ukraine’s sovereignty and territorial integrity and to prepare further sanctions for consideration in coming days,” White House National Security spokeswoman Caitlin Hayden said.
The EU and US have already imposed asset freezes and travel bans on many senior Russian officials and separatist leaders in eastern Ukraine.
Western sanctions also restrict loans for Russian state banks, block defense-related technology exports and certain oil industry exports to Russia.
Russia denies that its forces are backing the rebels, instead accusing Ukrainian forces of aggression and deliberately firing at civilians.
Speaking in Brussels, President Petro Poroshenko said Ukraine was a victim of “military aggression and terror”.
“Any offensive action which would be undertaken [by Russia]… would be a point of no return. And that’s why we undertake enormous efforts to stop that.”
Petro Poroshenko also said that he would discuss the possibility of a ceasefire at a meeting in Belarus on Monday of the Contact Group, which includes Ukraine, Russia, Belarus and the Organization for Security and Cooperation in Europe (OSCE).
Federica Mogherini, named on August 31 as Catherine Ashton’s successor, said there could be no military solution to the crisis and that while sanctions were being worked on, the diplomatic process would need to continue.
Ukraine’s government forces have lost ground in recent fighting.
A Ukrainian military spokesman said on August 30 that Russian tanks had attacked the town of Novosvitlivka near Luhansk and “destroyed virtually every house”.
Spokesman Andriy Lysenko said troops had been ordered to retreat from Novosvitlivk.
Ukrainian soldiers have also been trying to evacuate Ilovaisk in the Donetsk region, which has been surrounded by the rebels. Reports say a number of soldiers have been killed in shelling by the separatists.
Rebel leader Alexander Zakharchenko told the Russian News Service radio station a new offensive was being planned to create a corridor between Donetsk and Luhansk.
In south-eastern Ukraine, people have been leaving the port city of Mariupol, after advancing rebels captured Novoazovsk to the east.
Western and Ukrainian officials say this offensive has been substantially helped by Russian regular troops, opening a new front. Russia denies the accusation.
Russia has imposed a “full embargo” on food imports from the EU, US and some other Western countries, in response to sanctions over Ukraine.
PM Dmitry Medvedev said it would include fruit, vegetables, meat, fish, milk and dairy imports.
Australia, Canada and Norway are also affected.
Russia is also banning Ukrainian airlines from transit across its territory, he said in televised comments to the government.
Furthermore, the Russian government is considering banning transit flights for EU and US airlines in retaliation for sanctions over Ukraine, he said.
Barring airlines from Siberian airspace would significantly increase costs and flying time for many jets bound for Asian destinations.
EU food exports to Russia last year were worth 11.8 billion euros ($15.8 billion) while US food exports to Russia were worth 972 million euros ($1.3 billion).
Russia has imposed a full embargo on food imports from the EU, US and some other Western countries
Russia was the EU’s second-biggest market for food exports (10% of total), after the US (13%).
The European Commission said the Russian embargo was “clearly politically motivated”. It is considering how to respond.
Western governments accuse the Kremlin of fomenting the unrest in eastern Ukraine by supplying weapons and expertise to the pro-Russian separatists.
Last month the EU and the US tightened sanctions on Russia, with Brussels applying restrictions to key sectors of the economy as well as individuals. The first round of sanctions came after Russia annexed Ukraine’s Crimea region in March.
The crash of Malaysia Airlines Flight MH17 last month, killing 298 people, exacerbated tensions between the West and Russia, as the separatists in eastern Ukraine were widely blamed. It is strongly suspected that a Russian missile system was used to down the jet.
Dmitry Medvedev ordered the agriculture ministry and producer organizations to find ways to boost Russian farm output in order to prevent price rises for consumers.
Western exports of baby food to Russia are not on the sanctions list. Western pet food is not banned either, and Russians are not barred from buying Western food abroad, within customs limits.
The Russian authorities say they are confident the supermarket shelves will not be left empty – they are searching for alternative suppliers in South America, Turkey and China.
It is estimated that in big cities, like Moscow, more than 60% of food in the shops is imported.
Researchers at Capital Economics say “far and away the most vulnerable to the Russian sanctions is Lithuania, where exports of the banned products to Russia are equivalent to 2.5% of GDP”.
The major food exporters to Russia last year were, in order of importance: Belarus ($2.7 billion), Brazil ($2.4 billion), Ukraine ($1.9 billion), Germany ($1.8 billion) and Turkey ($1.68 billion), Reuters news agency reports.
In 2013 the biggest food sector in EU exports to Russia was cheese and curd, followed by pork, then alcoholic drinks, then apples, pears and quinces.
At the end of July Russia banned all fruit and vegetable imports from Poland, which has been among the most vocal critics of Russia’s involvement in Ukraine.
In January Russia also imposed a ban on imports of pigs and pork from the EU. The European Commission says that move was “disproportionate”, closing a market worth 25% of total EU pig and pork exports.
Russian President Vladimir Putin has issued a new decree banning or curbing agricultural imports from countries imposing sanctions on Russia over the crisis in Ukraine.
In the decree, Vladimir Putin ordered the measures, which also apply to food imports, to be introduced for one year.
Government departments were instructed to come up with a list of products subject to the order.
Russia has imposed import bans on other states in the past, but normally on grounds of public health.
Vladimir Putin has issued a new decree banning or curbing agricultural imports from countries imposing sanctions on Russia over the crisis in Ukraine
Wednesday’s decree did not specify which countries would be affected by the new measures but the EU and US recently tightened sanctions on Russia, with Brussels extending them from individuals to sectors of the economy.
Russia buys fruit and vegetables from the EU worth an annual 2 billion euros ($2.7 billion), and food and agricultural products from the US worth about 1 billion euros.
Last week Russia banned most agricultural imports from Poland on grounds of public health in what was seen as a thinly veiled retaliation for Poland’s advocacy of tough action over Ukraine.
Excerpt from Vladimir Putin’s decree:
“With the aim of protecting the national interests of the Russian Federation and in accordance with the Federal Laws of December 30, 2006, No 281-FZ <<On special economic measures>> and of December 28, 2010, No 390-FZ <<On security>>, I decree that: <<State power bodies of the Russian Federation, federal state bodies, local government bodies, legal entities set up in accordance with the legislation of the Russian Federation, and organizations and individuals that come under the jurisdiction of the Russian Federation shall proceed in their actions from the fact that, for one year from the date when this decree comes into force, foreign economic transactions involving the importation into the territory of the Russian Federation of certain types of agricultural produce, raw materials and food of which the country of origin is a state which has taken a decision to impose economic sanctions against Russian legal entities and/or individuals, or joined such a decision, are banned or restricted…>>”
At least 27,000 Russian tourists are stranded abroad after tour operator Labirint suspended its activity.
A company statement blamed the move on the deterioration in the rouble exchange rate and the “negative political and economic situation”.
There are signs that EU-US sanctions on Russia over the Ukraine crisis are hurting the wider economy, including Western investment in Russia.
A Russian tycoon says his executive jet is grounded because of US sanctions.
At least 27,000 Russian tourists are stranded abroad after tour operator Labirint suspended its activity (photo AFP)
Billionaire businessman Gennady Timchenko – close to President Vladimir Putin – told Russia’s ITAR-TASS news agency that Gulfstream was no longer servicing his jet and the pilots were not allowed to use its navigation equipment.
He is reckoned to have a fortune of $14.4 billion, owning big stakes in gas and infrastructure firms. He is among dozens of Russians hit by sanctions over the Ukraine conflict.
An agency assisting Russian tourists, Turpomoshch (Tour Help), said in a statement it is now trying to book Russians onto return flights in various countries, including Bulgaria, Egypt and Tunisia.
Labirint’s sudden failure on Saturday left some 27,000 Russian tourists without return tickets, Turpomoshch said.
Anxious Labirint customers are bombarding Turpomoshch with calls at a rate of five per minute, the agency says, adding that “our managers are working flat-out” to help them.
Another reason Labirint gave for its move was the Russian state’s advice that military or security service officials should not go abroad.
Last month another Russian tour operator, Neva, also went bust.
Russia has banned the imports of fruit and vegetables from Poland, depriving it of a major export market.
Russia’s food hygiene authorities said the imports had unacceptable levels of pesticide residues and nitrates.
They earn Poland more than 1 billion euros ($1.35 billion) annually.
Russia is Poland’s biggest market for apples.
The move follows EU sanctions against Russia over Ukraine – and Poland has condemned Russian actions there.
Russia has banned the imports of fruit and vegetables from Poland, depriving it of a major export market
Poland and some other former communist bloc countries are among the most vocal critics of Russia in the current crisis, accusing Moscow of supplying the separatist rebels in eastern Ukraine with arms and volunteers.
The cost to Poland of the import ban is likely to be 0.6% of GDP (national output) by the end of the year, Polish Deputy PM Janusz Piechocinski was quoted as saying.
Agriculture accounts for about 3.8% of Poland’s total GDP. Polish growers plan to seek compensation from the EU for the loss of earnings.
Poles have been posting images of apples on social media as a way of protesting against Russia.
On Thursday Russia announced a ban on more imported Ukrainian food: soy products, cornmeal, sunflowers and fruit juice.
Earlier Russia banned Ukrainian dairy produce and canned fish and vegetables. Last year it banned Ukrainian Roshen chocolate, produced by billionaire businessman Petro Poroshenko, who is now Ukraine’s president.
Previously Russia also imposed such boycotts on Georgia and Moldova – former Soviet republics, like Ukraine, whose pro-Western policies have angered the Kremlin.
Russia is an important export market for Georgian and Moldovan wine. Currently Russia is blocking imports of Moldovan fruit. In each case the Russian authorities say they have public health reasons for imposing a ban.
In January – before its March annexation of Crimea – Russia also imposed a ban on imports of pigs and pork from the EU.
The European Commission says that move was “disproportionate”, closing a market worth 25% of total EU pig and pork exports. In 2013 those exports to Russia totaled 1.4 billion euros.
Russia has warned that new EU sanctions against it over the Ukraine crisis will jeopardize security co-operation against terror.
The Russian foreign ministry said the EU would bear the blame for the move which sees 15 officials and 18 entities subject to asset freezes and visa bans.
The EU and the US accuse Russia of backing Ukraine’s rebels. Moscow denies this.
Meanwhile, the last remains of the victims of the crashed Malaysia Airlines jet flew out of eastern Ukraine for the Netherlands.
The departure of the aircraft from the city of Kharkiv with 38 coffins brings the total number of bodies sent for identification to 227.
Russia has warned that new EU sanctions against it over the Ukraine crisis will jeopardize security co-operation against terror
The Malaysia Airlines Flight MH17 from Amsterdam to Kuala Lumpur crashed on July 17, killing all 298 people – including 193 Dutch nationals – on board.
Pro-Russian separatist rebels in eastern Ukraine have been accused of downing the plane by a missile.
Russia has frequently denied sending heavy weapons into Ukraine. Moscow has suggested the plane could have been shot down by the Ukrainian military. Ukraine has denied the charge.
The fighting in eastern Ukraine erupted in April and is believed to have claimed more than 1,000 lives.
In a statement, the Russian foreign ministry said the new EU sanctions showed that the 28-member bloc was taking “a complete turn away from joint work with Russia on international and regional security, including the fight against the spread of weapons of mass destruction, terrorism, organized crime and other challenges”.
“We believe these decisions will be greeted enthusiastically by international terrorists.”
In a separate statement, the Russian ministry also accused the US of “an unrelenting campaign of slander against Russia”.
The EU sanctions were agreed after lengthy negotiations in Brussels on Friday.
The senior Russian officials targeted include Federal Security Service head Alexander Bortnikov, foreign intelligence head Mikhail Fradkov and Nikolai Patrushev, the secretary of the Russian security council.
The leader of Russia’s southern Chechnya republic, Ramzan Kadyrov, is also on the list.
Russian stock market fell sharply on Friday as investors weighed the impact of western sanctions over Ukraine.
The MICEX index, which is priced in roubles fell as much as 3% and the RTS, which is priced in dollars fell 3.6%
Shares slumped after President Barack Obama said sanctions might be extended to key parts of the Russian economy if Russia took further action in Ukraine.
Russia’s mining, defense and natural resources sectors could all be targets.
Stocks recovered some ground during the day after President Vladimir Putin moved to restore calm following the introduction of asset freezes and visa bans by the US against high ranking Russian officials.
The MICEX closed down 1% and the RTS index was down 1.45% at the end of the day.
Russia’s financial services industry found itself under the most pressure.
Visa and Mastercard said earlier on Friday they had stopped providing services to two Russian banks, Rossiya and SMP Bank.
Rossiya, described by the US as Russia’s 15th largest bank, has assets of $12 billion. It said card payment services for its clients had been stopped without notification.
US officials said Bank Rossiya, which is linked to a number of Russian businessmen, had been sanctioned, and would be “frozen out” from the dollar.
Russian stock market fell sharply as investors weighed the impact of western sanctions over Ukraine
They described Rossiya as a “personal bank for senior officials of the Russian Federation”.
Visa and Mastercard confirmed they had stopped providing services to SMP Bank without providing notification.
In a statement SMP, which is Russia’s 39th biggest bank with $5 billion in assets, called Visa and Mastercard’s actions “illegitimate” because its owners, rather than the bank itself, were the subject of sanctions.
The bank’s co-owners, billionaire brothers Arkady and Boris Rotenberg, are childhood friends of Vladimir Putin and were hit with sanctions on Thursday.
Vladimir Putin said Bank Rossiya was “just an average bank” which had “nothing to do” with events in Crimea.
He added he did not hold an account with the bank, but promised to open one “first thing on Monday” and asked for his salary to be transferred there.
Vladimir Putin also ordered Russia’s central bank to “take the bank’s clients under protection and provide all possible assistance to them.”
Russia’s central bank said the blacklisting of Rossiya and its transactions by the US did “not have a serious bearing on the lender’s financial stability”.
Although only banks with connections to high ranking Russian officials have been targeted Russian bank shares were broadly lower.
Shares in Sberbank, Russia’s largest bank, closed 1.17% lower – having fallen 2.9% earlier on Friday, while shares in VTB Bank were 2.61% lower after falling 4.3% earlier in the day.
Other sectors were also hit. Gas giant Gazprom was down 0.9%, oil firm Lukoil ended the day 1.36% higher. Russian steel company NLMK closed 1.94% lower.
Shares in gas producer Novatek closed down 9.63%. The company is part owned by Gennady Timchenko, a shareholder in Bank Rossiya and one of the wealthy Russian businessmen targeted by Western sanctions.
Ratings agencies S&P and Fitch warned they were changing their outlook for the Russian economy to “negative” from “stable” – the first stage before a possible downgrade in the country’s credit rating – because of the potential impact of sanctions.
President Vladimir Putin’s spokesman Dmitry Peskov criticised the move, suggesting it was not an objective decision and that somebody “ordered” it.
Russia’s credit rating is currently BBB.
Meanwhile the rouble was stable on Friday having previously fallen sharply on Thursday evening in response to the announcement of further US sanctions.
EU foreign ministers meeting in Brussels are discussing the bloc’s response, including imposing a visa ban and an asset freeze against a number of Russian officials following Crimea’s controversial referendum on Sunday.
According to Crimean officials, Sunday’s referendum overwhelmingly backed leaving Ukraine.
Ukraine’s chief electoral official, Mikhail Malyshev, said the vote was nearly 97% in favor of joining the Russian Federation, with a turnout of 83%.
The EU has already suspended talks on an economic pact with Russia and an easing of visa restrictions.
The EU will impose a visa ban and an asset freeze against a number of Russian officials following Crimea’s controversial referendum
Speaking in Brussels, EU foreign policy chief Catherine Ashton said the “so-called referendum” was “illegal under the constitution of Ukraine and under international law”.
“I call upon Russia yet again to meet with Ukrainian leaders and to start a dialogue with them, and to try to move to de-escalation, please, as quickly as possible. We’ve seen no evidence of that,” Catherine Ashton told reporters.
The baroness said the EU “can’t simply sit back and say this situation can be allowed to happen”, but that ministers needed to think carefully about what their response should be.
The White House has also described Russia’s actions in Crimea as “dangerous and destabilizing”, and said the international community would not recognize the results of a poll “administered under threats of violence”.
President Barack Obama has warned Moscow that Washington is also ready to impose “costs” over its actions in Ukraine.
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