Ukraine conflict: Russia faces more sanctions, warns G7

Vladimir Chizhov, Russia's ambassador to EU: "The Russian economy has been through challenges like this and it will survive"

G7 leaders say Russia will face further economic sanctions if it continues to support rebels in Ukraine.

The group of leading industrialised nations said Russia had undermined "Ukraine's sovereignty, territorial integrity and independence."

The warning came after the EU added eight more Russians to its sanctions.

Earlier, Russia described new US and EU sanctions as "destructive and short-sighted", and said they would lead to higher energy prices in Europe.

The G7 group of economic powers includes the United States, Japan, Germany, Britain, France, Italy and Canada.

Its leaders said Russia could still "choose the path of de-escalation", but warned President Vladimir Putin that he would face greater economic costs if he continued to back Ukrainian separatists.

Land mine accusations

The leaders also called on all sides to establish a ceasefire at the crash site of the Malaysian Airlines jet that was shot down on 17 July in eastern Ukraine.

Heavy fighting between Ukrainian forces and pro-Russia rebels around Donetsk has prevented international experts from reaching the plane crash site.

Ukrainian military spokesman Andriy Lysenko accused the rebels of planting landmines near the crash site. The claim could not be independently verified.

Russia has come under increased pressure to end its support for the rebels, who Western governments believe were behind the downing of MH17, killing all 298 people on board.

Russian President Vladimir Putin chairs a Cabinet meeting in Moscow - 30 July 2014 President Putin must change his policy in Ukraine or face the economic consequences, the G7 has warned

Mr Putin has also been accused by the US and EU of supplying heavy weapons to the rebels - a charge his government has denied.

New US sanctions

On Tuesday, the US announced new economic sanctions against Russia, widening their scope to include three key sectors of the economy - energy, arms and finance.

The EU is also expanding its sanctions, targeting the oil sector, defence equipment and sensitive technologies.

Several members of Mr Putin's inner circle are among the eight people the EU announced it was adding to sanctions on Wednesday.

They include Arkady Rotenberg, Mr Putin's former judo sparring partner and a major shareholder in the civil engineering company Giprotransmost. The company has received a public contract to conduct a study on building a bridge from Russia to Crimea, the EU said.

Another added to the EU's list is Yuri Kovalchuk, chairman of the Rossiya bank and a long-standing friend of the president.

A total of 95 people and 23 entities have now been hit with EU-wide asset freezes and travel bans.

Further details of the new EU sanctions are due to be published on Thursday.

'Aggravating relations'

Russia's foreign ministry called the EU's move "thoughtless and irresponsible" and said it would "inevitably" lead to higher energy prices in Europe.

"By going on a sanctions spree, Brussels, by its own will, is creating barriers for further cooperation with Russia in such a key sphere as energy," the statement said.

It also labelled new US sanctions as "destructive and short-sighted" and warned that they would aggravate relations between the two countries.

In other developments in Ukraine on Wednesday:

  • The Ukrainian army said it seized the key town of Avdiivka near the rebel stronghold of Donetsk
  • Regional officials in Donetsk said that 19 people had been killed in fighting in the past 24 hours
Ukrainian soldiers advancing through the countryside in Donetsk region - 30 July 2014 Ukraine's army continued its offensive against rebels on Wednesday, taking controls of several towns
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Russian press reacts to sanctions
  • "The Russian authorities have been responding chaotically to emerging threats by taking instant ad hoc measures, but failing to calculate their systemic consequences" - Nezavisimaya Gazeta
  • "Sources in Russian diplomatic circles say the Russian leadership hopes that the sectoral sanctions will be considerably less stringent when approved at the top level" - Kommersant
  • "It is possible to say now that the Russian authorities mistakenly believed that Europeans would not risk introducing sectoral sanctions for fear that they might backfire" - Novyye Izvestiya
  • "Russia is different not only because its economy is much more integrated into the world one. Russia is a nuclear power and a member of the World Trade Organization, which limits the possibility of pressure" - Vedomosti
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