The European Union and the United States toughened their stance and imposed further sanctions against Russia targeting banks, energy and defense firms.
The sanctions against the former social bastion are said to be the strongest since the Cold War. The 28 member countries of EU announced in a statement Tuesday the sanctions will limit access to EU capital markets for Russian State-owned financial institutions, impose a ban on trade in arms, set up an export ban for dual use goods for military end users and limit Russian access to sensitive technologies, mainly in the oil sector.
Russia came under further scrutiny after the Malaysia Airlines flight MH17 was shot down July 17 in Ukrainian territory controlled by pro-Russian separatists.
The new sanctions will affect "persons and entities supporting or benefitting from Russian decision-makers," in addition to 87 people and 20 organizations already subject to EU sanctions, reports the Agence France-Presse.
Announcing the sanctions in Washington, U.S. President Barack Obama said that the measures against Russia will have an "even bigger bite."
"If Russia continues on this current path, the costs on Russia will continue to grow," U.S. President Barack Obama said in Washington, reports Reuters. He also said that Russia's actions in Ukraine and the sanctions already imposed made a weak Russian economy even weaker.
The EU, which also seemingly has to bear the brunt of these sanctions was hesitant to take the measure as it mostly depends on Russian energy. German Chancellor Angela Merkel said the decision was "unavoidable." "It is now up to the leadership in Russia to decide whether they want to go the way of de-escalation and cooperation," she added, according to NBC News.
However, experts say that European countries that are trading partners and energy customers of Russia will also face the economic pain of the sanctions. The United Kingdom's oil giant BP warned that additional economic sanctions on Russia would impact its business. Its shared dipped 2.5 percent Tuesday. BP owns a major stake in Rosneft, Russia's biggest oil company. Rosneft has been the target of U.S. sanctions and can no longer access long-term financing from American sources, reports CNN Money.
Also, shares in French automotive manufacturer Renault dropped by 4.5 percent Tuesday as it cautioned about a sharp slowdown in emerging markets, including Russia which is Renault's third largest market based on sales.
