Russia has pledged to retaliate for any sanctions, but EU leaders seem to be betting that Moscow has more to lose than they do. Merkel’s finance minister, Wolfgang Schaeuble, said any potential impact on Germany’s economy was likely to be limited.
Storage tanks for natural gas across much of Europe are full after a mild season, and the peak of winter demand is over.
Europe’s trade volume with Russia accounts for just 1 percent of EU gross domestic product but 15 percent of Russia’s, said the German trade lobby group BGA. “A trade conflict would be painful for the German economy, but for the Russian economy it would be life-threatening,” said its president, Anton Boerner.
While the EU has agreed to wording for its sanctions, it is still working on a target list. Talks took place in London this week between officials from Britain, the United States, Italy, France, Germany, Poland, Switzerland, Turkey and Japan.
“My understanding is that there was detailed discussion of names at the meeting,” an EU official said. “No definitive list has been drawn up, but it will be ready by Monday.”
European officials have indicated that Putin and Lavrov will not be on the list, in order to keep channels of communication open. The list is expected to focus on targets close to Putin in the security services and the military, as well as lawmakers.
In the past, U.S. and EU sanctions against countries such as Syria, Libya and Iran have started with lists of only around 20 people and companies. But those lists quickly evolved into more powerful weapons as other people and firms were added.
The EU has said it is also prepared to take further steps, such as an arms embargo and other trade measures.
(Additional reporting by Luke Baker in Brussels, Jason Bush in Moscow, Ron Popeski in Kiev, Stephen Brown in Berlin, and Steve Holland, Roberta Rampton and Patricia Zengerle in Washington; Writing by Peter Graff and Peter Cooney; Editing by Kevin Liffey and Jonathan Oatis)
Article Appeared @http://www.reuters.com/article/2014/03/12/us-ukraine-crisis-idUSBREA1Q1E820140312