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EU takes aim at Russia economy as Kiev plans Crimea pullout

Russian soldiers stand guard after seizing contol of the Ukrainian navy headquarters in Novoozerne, on March 19, 2014/AFP

Russian soldiers stand guard after seizing contol of the Ukrainian navy headquarters in Novoozerne, on March 19, 2014/AFP

Kiev, March 20- European leaders were on Thursday to debate biting economic sanctions against Russia for its annexation of Crimea as Ukraine tore up key ties with the Kremlin and drew up plans to evacuate its nationals from the rebel peninsula.

The European Union is under intense pressure to find a credible response to an explosive security crisis on the 28 nation bloc’s eastern frontier that NATO chief Anders Fogh Rasmussen on Wednesday called “the gravest threat to European security and stability since the end of the Cold War.”

But the Kremlin has warned repeatedly that it would strike back hard if confronted with a new wave of Western punitive measures that EU nations their energy and financial sectors intertwined with Russia’s would keenly prefer to avoid.

Russian President Vladimir Putin will also find himself on the diplomatic defensive in Moscow when he hosts United Nations Secretary-General Ban Ki-moon, as the global community almost unanimously views Russia’s absorption of the Black Sea region as illegal.

But world anger has done little to halt unchallenged Russian military advances that prompted Kiev’s new Western-backed government to acknowledge preparing a Crimean evacuation plan for thousands of its soldiers and families.

Tensions eased somewhat in the region on Thursday morning when acting president Oleksandr Turchynov announced the release by Crimean militias of Ukranian navy chief Sergiy Gayduk.

Turchynov had threatened the Crimean authorities with “an adequate response… of a technical and technological nature” unless they immediately released Gayduk and several others seized during the storming of Ukraine’s naval headquarters in the port of Sevastopol on Wednesday.

His call was backed up by Russian Defence Minister Sergei Shoigu a signal that even Moscow considered some of the militants’ actions outside the bounds.

Yet the pro-Kremlin troops’ march across the mostly Russian-speaking region roughly the size of Belgium has been unhalting since the day Putin first won the right to use force against his ex-Soviet neighbour following the February 22 fall there of a Moscow-backed regime.

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Kiev’s untested leaders and their Western allies now fear that Putin has set his sights on the Russified southeastern swathes of Ukraine as part of his self-declared campaign to “protect” compatriots from the more nationalistic forces who rose to power on the back of three months of deadly protests in Kiev.

“Our major concern right now is whether he will go beyond Crimea, whether Russia will intervene in the eastern parts,” NATO chief Rasmussen also conceded on Wednesday.

Ukraine has responded by seeking protection from Western powers and planning on Friday to sign the political portion of a broad EU Association Agreement whose rejection in November by Ukraine’s pro-Kremlin president Viktor Yanukovych sparked the protests that eventually led to his fall.

Kiev on Wednesday also announced plans to withdraw from the Moscow-led Commonwealth of Independent States (CIS) alliance that replaced the Soviet Union and to slap visas on Russians who sought to enter the country.

The Ukrainian authorities said they would further consider asking the United Nations to declare Crimea a “demilitarised zone” and thus force the removal of up to 25,000 Russian soldiers that could be based there under an existing agreement with Kiev.

The EU leaders have already suspended talks on easing visas into Europe for Russian travellers — an issue that Moscow has lobbied for years and slapped travel bans and asset freezes on 21 Russians and Ukrainians considered culpable for the Crimean swoop.

– ‘Not if but when’ –

But the measures covered a much lower rank of officials than the punitive steps also announced on Monday by Washington against 11 Russians and Ukrainians on the same day.

Those covered Yanukovych and some key Putin allies who play a prominent and powerful daily role in Russian politics.

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But Germany stepped up the pressure on Wednesday by announcing the suspension of a major arms deal with Moscow that signalled its commitment to a tougher stance.

German Chancellor Angela Merkel renowned for cautious and pragmatic approach to foreign affairs last week warned Russia of “massive” long-term damage to its economy unless it failed to reverse its Crimean course.

The message from Washington has been perhaps even more forceful.

“The question at this point is not if we will do more sanctions, it’s when,” State Department spokeswoman Jen Psaki said.

But Russia’s Deputy Foreign Minister Sergei Ryabkov warned that Moscow was preparing an entire series of “asymmetrical measures” should the United States hit his country with more severe steps.

Ryabkov said these covered “a number of areas of dialogue that are important to the Americans” and hinted that Russia could “raise the stakes” in the ongoing Iranian nuclear talks.

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