Late on Monday, the US said Western leaders agreed on imposing wider sanctions on Russia's financial, defence and energy sectors after a conference call between US President Barack Obama and leaders of Britain, France, Germany and Italy. The EU does more than 10 times as much trade with Russia as the United States, relying in particular on Russian natural gas to fuel its industry and power its cities. Some of the bloc's 28 member states are nervous about the risk to their own economies, and EU leaders are seeking to strike a balance between inflicting pain on Russia and preventing fragile EU nations from sliding back into recession.
In a letter to EU leaders last week, European Council President Herman Van Rompuy said the proposed sanctions package "should have a strong impact on Russia's economy while keeping a moderate effect on EU economies". There was "an emerging consensus", he said, on some key principles, including only targeting future contracts. Another principle was that EU measures targeting energy technology could hit Russia's oil sector but not its natural gas. Russia is the world's biggest exporter of gas and second biggest exporter of oil; Europe depends on it far more for gas, which arrives mainly by pipeline and is harder to source from elsewhere than oil that arrives mostly by ship.
So far, diplomats said the talks on Tuesday had managed to sign off on a new list of Putin's associates and companies that will face sanctions under previous measures. The new list is expected to be made public on Wednesday, adding to the 87 people and 20 organisations already hit with asset freezes for playing a role in threatening Ukraine.