WASHINGTON (AP) – Citing Russia’s stalled growth rate and a flow of foreign capital out of Moscow, U.S. and European officials hope a new round of sanctions targeting energy and defense entities, as well as major banks, will deepen Russia’s economic pain even further and force President Vladimir Putin to end provocations in Ukraine.
Roughly 30 percent of Russia’s banking sector assets are now constrained by U.S. sanctions, Obama administration officials said Tuesday, shortly after announcing new penalties. The sanctions target five of Russia’s six largest state-owned banks and aim to curtail their access to U.S. debt markets.
The West is also halting future sales to lucrative Russian economic sectors, with the U.S. announcing plans to block future technology sales to the oil industry and Europe approving an arms embargo. The Europeans also backed sanctions Tuesday against state-owned banks and the energy sector, though the specific EU targets won’t be made public until later in the week.
Western officials insist the new sanctions will damage an already struggling Russian economy. The International Monetary Fund has slashed Russia’s growth forecast for this year to nearly zero, and the U.S. says more than $100 billion in capital is expected to flow out of the country.
“Russia’s actions in Ukraine and the sanctions that we’ve already imposed have made a weak Russian economy even weaker,” President Barack Obama said Tuesday.