Russia has remained defiant following the announcement of tough new sanctions from Brussels and Washington.
In return, Moscow announced a ban on fruit and vegetable imports from Poland, threatening to extend it to the rest of the European Union. Though the reason given for the ban was stated as ‘hygiene’, Polish fruit farmers see it as a highly political move at their expense.
The Czech government said that a protracted trade war between the EU and Russia could lead to a new ‘Iron Curtain’.
The EU-US sanctions mainly targeted Russia’s three largest banks. Though they claimed their business will not suffer, analysts beg to differ.
“The economic cold war with Russia is slowly getting hotter,” explained Robert Halver, head of capital market analysis at Baader Bank in Frankfurt.
“It hurts, especially since Russia will go into recession if things continue this way. Russia has the problem of three negatives: [because of the sanctions] it can’t get capital, or high-tech or weapons systems or anything that can be used as a weapons system. The country will go into recession. And we will suffer as well, especially the German businesses which are more invested in the Russian economy,” Halver added.
Russia’s envoy to the EU Vladimir Chizkov said the new sanctions would lead nowhere and fail to help solve the crisis.
The sanctions announced on Tuesday are the strongest international action yet to Russia’s support for rebels in eastern Ukraine.