US threatens tougher sanctions on Russia
washington — Treasury Secretary Jacob Lew has warned Russia that it could face tougher economic sanctions because of its actions in Ukraine but so far other economic powers are showing a reluctance to go as far as the US.
Lew delivered his warning on Thursday to Russian Finance Minister Anton Siluanov, telling him that the Obama administration was willing to impose “additional significant sanctions” if Russia escalates the Ukraine situation. Treasury said in a statement that Lew described Russia’s annexation of Crimea as “illegal and illegitimate.”
Lew met Siluanov in advance of talks between finance ministers and central bank presidents of the Group of Seven major economic powers and a broader Group of 20, which includes the traditional powers and emerging economies such as China, Brazil and India.
Lew’s tough language did not find its way into a joint statement from the G-7, and there was no hint that sanctions against Russia might be strengthened.
Instead, the G-7 statement said the major economic powers had discussed “the situation in Ukraine, its financing needs and the international response.”
Russia is a member of the G-20 but not the G-7. The G-7 nations are the US, Japan, Germany, Britain, France, Canada and Italy. French Finance Minister Michel Sapin told reporters on Thursday before the discussions began that France preferred to focus on the economic support being provided to Ukraine.
That effort is being led by the International Monetary Fund, which says it will provide up to $18 billion in loan guarantees to Kiev to help the country get its economy moving again.
“The question is not to talk about sanctions. The question is to get started ... as quickly as possible” working to get the IMF’s support programme implemented, Sapin told reporters.
The US delegation to the G-7 and G-20 talks was led by Lew and Federal Reserve Chair Janet Yellen. Those discussions were being held in advance of the annual spring meetings today of the 188-nation IMF and its sister lending organisation, the World Bank.
The US and European nations have imposed various economic sanctions on Russia, including travel bans and asset freezes in response to Russia’s annexation of Crimea, with the possibility of tougher sanctions on the table.
To provide support for Ukraine’s cash-strapped government, the IMF is working up a loan package to provide $14 billion to $18 billion in assistance. However, Russian President Vladimir Putin has threatened to demand advance payment from Ukraine for natural gas that Russia supplies to the country.
Asked on Thursday about the IMF support, its managing director Christine Lagarde said the IMF hoped to have the programme for Ukraine approved by its 24-member board by the end of this month or early May.
Foreign ministers from the 28-nation European Union are scheduled to meet in Brussels on Monday and the issue of expanding the sanctions will be discussed. However, some countries have already expressed opposition to such a move.
World Bank President Jim Young Kim told reporters at a separate news conference that the sanctions that have already been imposed were having a dampening effect on Russia’s economy and if the crisis worsens, he said Russia could be pushed into a recession.
Kim said that the World Bank was preparing its own support package for Ukraine amounting to around $3.5 billion. —