US Secretary of State John Kerry pauses while speaking
during a news conference in London where he raised concerns
over Russian troop deployments near Ukraine.
The European Union is expected to impose travel bans and
asset freezes on Monday on dozens of Russians involved in
Moscow's gradual takeover of Crimea and will choose from a list
of up to 130 names over the weekend, European diplomats say.
Moscow shipped more troops and armour into Crimea on Friday
and repeated its threat to invade other parts of Ukraine in
response to violence in Donetsk on Thursday night, showing no
sign of bowing to Western demands to pull back.
EU diplomats will choose from a long list of 120-130 possible
Russian targets for sanctions on Sunday, as pro-Moscow
authorities who have taken power in Crimea hold a vote to
join Russia in the worst East-West confrontation since the
But European diplomats dismissed a German newspaper report
that said the list would include the heads of Russia's two
biggest companies, energey giants Gazprom and Rosneft.
U.S. Secretary of State John Kerry said Russia would be
guilty of a backdoor annexation of Crimea if its parliament
ratified the Crimea referendum, which is taking place after
an armed takeover of Crimea and gives voters no chance to say
Russia's foreign minister, speaking after crisis talks with
Kerry, played down his own ministry's threat of wider
conflict, saying Moscow had no plans to invade
Russian-speaking eastern Ukraine, where pro-Moscow forces
have occupied state buildings.
But he said Russia would respect the referendum result.
Russia's stock markets tumbled and the cost of insuring its
debt soared on the last day of trading before the Crimea
European officials told Reuters the EU was working on a five
page list of 120-130 Russians who could be subjected to asset
freezes and travel bans. An EU diplomat said he expected the
final list of those to be sanctioned to be between "tens and
scores" of people on Monday.
Germany's Bild newspaper reported that Alexei Miller, boss of
natural gas monopoly Gazprom, and Igor Sechin, head of
Russia's biggest oil firm Rosneft, would be among those
targeted, along with senior ministers and Kremlin aides.
Reuters was not immediately able to confirm the Bild report
and European diplomats dismissed it.
"(Business interests) is not the target initially, the focus
is on the political decision that has been taken to act in
Crimea and destabilise Ukraine," said one diplomat involved
in the negotiations.
Rosneft spokesman Mikhail Leontyev said sanctions on his
firm's boss would be "stupid, petty and obvious sabotage of
themselves most of all. I think it will primarily affect
Rosneft's business partners in the West in an extraordinary
way." Gazprom and the Kremlin declined to comment.
The Russian Foreign Ministry, responding to the death of at
least one protester in Ukraine's eastern city of Donetsk,
repeated President Vladimir Putin's declaration of the right
to invade to protect Russian citizens and "compatriots".
"Russia is aware of its responsibility for the lives of
compatriots and fellow citizens in Ukraine and reserves the
right to take people under its protection," it said.
Ukrainian health authorities say one 22-year-old man was
stabbed to death and at least 15 others were being treated in
hospital after clashes in Donetsk, the mainly
Russian-speaking home city of Ukraine's ousted President
Organisers of the anti-Moscow demonstration said the dead man
was from their group.
Moscow denies that its forces are intervening in Crimea, an
assertion Washington ridicules as "Putin's fiction".
Journalists have seen Russian forces operating openly in
their thousands over the past two weeks, driving in armoured
columns of vehicles with Russian licence plates and
identifying themselves to besieged Ukrainian troops as
members of Russia's armed forces.
A Reuters reporter watched a Russian warship unload trucks,
troops and at least one armoured personnel carrier at
Kazachaya bay near Sevastopol on Friday morning. Trucks drove
off a ramp from the Yamal 156, a large landing ship that can
carry more than 300 troops and up to a dozen APCs.
In nearby Simferopol, around 300 Tatars protested against the
referendum. Tatars, a majority in Crimea until Soviet leader
Josef Stalin deported them en masse for alleged collaboration
with the Nazis in World War Two, are strongly anti-Russian.
FACTS ON THE GROUND
Russian troops seized the Black Sea peninsula two weeks ago
as a pro-Moscow regional government took power there. The new
regional authorities intend to secede from Ukraine and join
Russia in a vote described in the West as illegal.
U.S. President Barack Obama said he still hoped for a
diplomatic solution, but Russia has shown no sign of veering
from Putin's plan to annex Crimea.
Putin declared on March 1 that Russia had the right to invade
its neighbour, a week after its ally Yanukovich fled the
Ukrainian capital following three months of demonstrations
that ended with about 100 people killed in the final days.
In further signs of Moscow's belligerent posture ahead of the
Crimea vote, the Defence Ministry announced on Friday it
would hold exercises with fighter jets and helicopters over
the Mediterranean Sea. On Thursday it announced artillery
drills near Ukraine's border.
U.S. and EU sanctions on Russian officials and other figures,
are now seen as inevitable.
U.S. and European officials say the targets will not include
Putin or Lavrov, and an east European diplomat set out a
scenario in which the EU might impose sanctions on one set of
people on Monday, and then take further steps on Wednesday
and then on Thursday-Friday during an EU summit in Brussels.
"It could start by sanctioning those directly involved with
the situation in Crimea. Then if Russia doesn't respond,
expand to include senior figures in the Russian Senate, and
then ultimately expand to include very senior people," the
Bild's list included Defence Minister Sergei Shoigu, Deputy
Prime Minister Dmitry Rogozin, presidential administration
chief Sergei Ivanov and the secretary of the National
Security Council, Nikolai Patrushev.
SHARES FALL, DEBT INSURANCE COSTS RISE
Russia's MICEX stock index has lost more than 16 percent of
its value in the two weeks since Putin declared his right to
invade. The cost of insuring Russia's debt against default is
now up by half since the crisis began.
Although Russian public opinion, fed by overwhelmingly
state-controlled media, is still solidly behind the plan to
annex Crimea, Western countries believe sanctions could
undermine support for Putin among the wealthy elite.
Former Finance Minister Alexei Kudrin told Russian media that
the threat of Western sanctions was already imposing higher
borrowing costs on Russian businesses and that further
sanctions would push capital flight to $50 billion a quarter.
Renaissance Capital estimated capital outflow in the first
quarter would exceed $55 billion, compared with $63 billion
for the whole of 2013.
The rouble has declined only slightly despite the fall in
share prices, held aloft by a central bank that raised its
lending rates on March 3 and has been spending reserves to
keep the currency from falling.