Russia investors take fright as Vladimir Putin completes Crimea annexation

Mar 22 2014, 10:42 IST
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The financial noose began tightening with Visa and MasterCard stopping processing payments for a Russian bank owned by two brothers on the U.S. blacklist The financial noose began tightening with Visa and MasterCard stopping processing payments for a Russian bank owned by two brothers on the U.S. blacklist
SummaryCrimea: EU signs deal with Ukraine, pledges financial help

give his surname, saw no reason to celebrate. "An occupying force is in my country and we have been annexed," he said.

INNER CIRCLE

A referendum last Sunday after Russian troops seized control of Crimea overwhelmingly backed union with Russia but was denounced by Washington and the European Union as a sham. It opened the way for annexation within a week.

The OSCE European rights and security body finally agreed to send monitors to Ukraine after a delay Western members blamed on Russia, but Moscow said it would have no mandate in Crimea.

Obama's decision to target people who accompanied Putin's rise from the mayor's office in St Petersburg in the 1990s to the Russian presidency deepened the diplomatic confrontation.

Putin said Bank Rossiya, singled out by Washington as the personal bank for senior Russian officials, had nothing to do with events in Crimea.

The St Petersburg-based bank - which is chaired and partly owned by Yuri Kovalchuk, an old associate of Putin's - mainly serves clients in Russia's energy sector including businesses owned by state-run gas producer Gazprom.

Putin, who says Crimea has exercised its right to self-determination, promised to transfer his wages to Bank Rossiya. "I personally don't have an account there, but I certainly will open one on Monday," he told Russia's Security Council.

Others on the U.S. blacklist include oil and commodities trader Gennady Timchenko and the brothers Arkady and Boris Rotenberg, who are linked to big contracts on gas pipelines and the Sochi Olympics, as well as Putin's chief of staff and his deputy, the head of military intelligence and a railways chief.

ENERGY UNION

European leaders also agreed to accelerate their quest for more secure energy supplies at talks on Friday.

The EU has made progress in diversifying since crises in 2006 and 2009, when rows over unpaid bills between Kiev and Moscow led to the disruption of gas exports to western Europe. But Russia still provides around a third of the EU's oil and gas and 40 percent of the gas goes through Ukraine.

European Council President Herman Van Rompuy said member states would help one another to maintain supplies if Moscow cut them. "We are serious about reducing our energy dependency," he told a news conference at the end of a summit in Brussels.

EU countries, which buy Russian gas individually, will also look to negotiate supply deals jointly with Moscow to increase their bargaining power. "It is clear we need to be moving

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