Baku-APA. Russia fought back on Wednesday over new U.S. and EU sanctions imposed over Ukraine, where fighting between Moscow-backed rebels and government troops has intensified since a Malaysian airliner was shot down, APA reports quoting Reuters.
The worst confrontation between Moscow and the West entered a new phase this week since the United States and European Union took by far the strongest international steps yet against Moscow over its support for Ukraine's rebels.
New EU and U.S. sanctions unveiled on Tuesday restrict sales of arms and equipment for the oil industry, while Russian state banks are barred from raising money in Western capital markets.
Moscow called the sanctions "destructive and myopic" and said Europe and the United States would suffer. On Wednesday it banned imports of Polish fruit and vegetables and said it might expand the ban to the entire EU. Russian banks said they would seek financing in Asia. Novatek, a big Russian gas company that works with French firm Total, said it was studying the impact of sanctions on its international joint ventures.
On the ground in Ukraine, heavy fighting has been taking place near the site where Malaysian flight MH17 crashed into wheat and sunflower fields on July 17, shot down by what Washington and Brussels believe was a missile supplied by Russia.
Kiev accused the pro-Russian rebels on Wednesday of fortifying the area, including with land mines, to prevent the site from being properly investigated. The land mine report could not be independently confirmed. Ukraine is party to a treaty banning land mines; Russia is not.
The new Western sanctions mark the first time Washington and Brussels have adopted measures designed to hurt the overall Russian economy, after weeks of narrow steps targeting only specific individuals blamed for Russia's Ukraine policy.
"Russia's actions in Ukraine and the sanctions that we've already imposed have made a have made a weak Russian economy even weaker," U.S. President Barack Obama said in Washington on Tuesday. "If Russia continues on this current path, the costs on Russia will continue to grow."
German Economy Minister and Vice Chancellor Sigmar Gabriel said the measures would hurt the European economy but would hurt Russia more. The price was worth paying, he added: "At a time of war and peace, economic policy is not the main consideration."
The Russian Central Bank said it could support banks that were hit by sanctions. Russia's second-largest bank, VTB, said it would find funding outside of the EU and United States, using currencies other than euros and dollars.
But bankers said Russian firms had been effectively frozen out of global lending, and not just in the West, leaving the Russian state as their only source of funding.
"Right now, all banks are acting the same. No group is any more cautious or sanctions aware: It's all too important. Asian banks are the same as European or U.S. banks in this respect," a London-based banker at an Asian bank said.
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