Ukraine-Russia: EU to ban lending to Russian central bank after Putin orders troops over border

Germany blocks Nord Stream 2 gas pipeline certification, UK sanctions oligarchs

The European Union has moved to prohibit lending to Russia's central bank and sanction 351 members of the State Duma who voted to recognise breakaway parts of Ukraine.

It comes in response to Russian president Vladimir Putin’s recognition of the separatist-held enclaves of Donetsk and Luhansk in eastern Ukraine and his decision to send military forces to secure them.

Taoiseach Micheál Martin said Russia’s push into eastern Ukraine “crossed a line” that would meet a firm and united response from EU leaders.

The EU is expected to jointly condemn the move as “illegal and unacceptable” and in violation of Ukraine’s territorial integrity and international law.

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Ambassadors have been presented with proposals to sanction 351 members of Russia’s State Duma who voted in favour of the move, which can involve asset freezes and travel bans.

In addition, the sanction proposals name 27 individuals who are decision makers, involved in financial support for the venture, part of the military advance or the “disinformation war against Ukraine”.

Trade restrictions in force for occupied Crimea are expected to be extended to cover the breakaway regions, while the sanctions would also freeze the assets of two private Russian banks and prevent lending to the Russian central bank.

EU ambassadors are meeting throughout the day to finalise agreement on the proposals, which will then be formalised by officials before coming into force. The EU is expected to warn that the sanctions will be “scaled up significantly” if Moscow takes further action.

Earlier on Tuesday the Taoiseach spoke in Berlin alongside German chancellor Olaf Scholz, who attacked Russia's move on Monday as a "serious breach" of international law and diplomatic agreements. Mr Scholz announced he had intervened to halt the permit process for a new undersea Russian gas pipeline to Germany, Nord Stream 2. "The situation has changed dramatically," he said.

Nord Stream 2 is a 1,200km pipeline under the Baltic Sea, which was planned to take gas from Russia to Germany, pending approval from Germany and the EU.

About the same time, British prime minister Boris Johnson announced sanctions against three Russian billionaires with links to Mr Putin as well as five banks.

‘Chilling effect’

Mr Martin said Russia’s move into Ukraine created a “chilling effect for small states across the European continent” and called on Russia to reconsider its actions.

“This crosses a line, it is a flagrant violation of international law and a breach of Ukraine’s sovereignty,” said Mr Martin. “Our unity is our strength and there is very clear unity of purpose within all EU member states.”

Mr Scholz agreed that the move was a breach of the UN charter and Helsinki agreements on national sovereignty and the immovability of national borders – as well as the more recent Minsk agreement.

“It is up to the international community to respond to these one-sided, incomprehensible and unjustified actions of the Russian president in a co-ordinated and targeted way,” he said. “So we send a signal to Moscow that such actions will not remain without consequence.”

UK sanctions

Mr Johnson said on Tuesday that Russia is heading towards “pariah status” and the world must now brace for the next stage of Mr Putin’s plan, saying that the Kremlin is laying the ground for a full-scale invasion of Ukraine.

Mr Johnson told the UK parliament that five banks – Rossiya, IS Bank, GenBank, Promsvyazbank and the Black Sea Bank – were being sanctioned, along with three people: Gennady Timchenko, Igor Rotenberg and Boris Rotenberg. But Mr Johnson refrained from imposing limits on Russia’s biggest state banks, cutting off capital for Russian companies or ejecting other prominent so-called Russian oligarchs from Britain.

“This is the first tranche, the first barrage of what we are prepared to do,” he said. “Any assets they hold in the UK will be frozen and the individuals concerned will be banned from travelling here.”

Several British politicians asked Mr Johnson to be tougher on Russian money, even demanding that Russian oligarchs be ejected from Britain and Russian money be dug out of the city of London.

The United States imposed sanctions against Russia immediately after Mr Putin's announcement on Monday, with president Joe Biden signing an executive order to halt US business activity in the breakaway regions.

Troops moving in

A Reuters witness saw tanks and other military hardware moving through the separatist-controlled city of Donetsk after Mr Putin formally recognised the breakaway regions and ordered the deployment of Russian forces to “keep the peace”.

The Ukrainian military said two soldiers were killed and 12 wounded in shelling by pro-Russian separatists in the east in the past 24 hours, the most casualties this year, as ceasefire violations increased.

It also said it had recorded 84 cases of shelling by separatists who it said had opened fire on about 40 settlements along the front line with heavy artillery, in breach of ceasefire agreements.

Russia denies any plan to attack its neighbour, but it has amassed troops on Ukraine's borders and threatened "military-technical" action unless it receives sweeping security guarantees, including a promise that Ukraine will never join Nato.

Martin-Scholz conference

In Berlin, Mr Martin and Mr Scholz also discussed post-pandemic economic recovery in the EU as well as continued tensions in the Brexit process. At their joint press conference Mr Scholz described German-Irish relations as “close, trusting and good”.

Both Berlin and Dublin had a particular interest in continued close relations with the UK, he said, but it is now up to London to make a move towards the European Commission and find practical solutions on implementing the Northern Ireland protocol.

“The British government must meet its commitments under international law and implement the protocol,” he said.

“It is the guarantee of freedom and peace on the island of Ireland, to protect the internal market and is a central pillar of the relationship between the UK and the EU that we agreed after Brexit.” – Additional reporting Reuters, Guardian

Derek Scally

Derek Scally

Derek Scally is an Irish Times journalist based in Berlin

Naomi O’Leary

Naomi O’Leary

Naomi O’Leary is Europe Correspondent of The Irish Times