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Western officials are preparing to punish Russia and provide more support for Ukraine's
new pro-Europe government as the crisis in Crimea escalates.
The U.S., U.K. and other European countries were meeting in London to prepare a list of
Russians who would face a travel ban and have their assets frozen unless Moscow talks to
Ukraine about resolving a military standoff in its Black Sea region.
European leaders, including U.K. Prime Minister David Cameron, said the window for diplomacy
was closing fast as Crimea prepares to hold a referendum on joining Russia on Sunday.
The West says the planned vote is illegal and won't be recognized by the international
community. French Foreign Minister Laurent Fabius tweeted
that sanctions could come as early as this week, although the European Union may want
to wait until all 28 foreign ministers meet in Brussels on Monday before taking a final
decision. The EU has frozen the assets of 18 people
linked to the former Ukrainian government, including ousted President Viktor Yanukovych,
who has fled to Russia. President Obama signed an executive order
last week authorizing the freezing of U.S.-held assets owned by people responsible for destabilizing
Ukraine. The U.S. has already imposed travel restrictions on some Russians and Ukrainians,
according to senior administration officials. Western governments have dropped talks with
Russia in other areas, and suspended preparations for the G8 summit in Sochi due later this
year. The initial focus on individuals, rather than
Russian companies or trade in energy and goods, reflects concern -- particularly in some European
countries -- that a new cold war could hurt the region's fragile economic recovery.
Analysts say Russia would be the ultimate loser of any prolonged trade war, but European
exporters and investors would suffer too. The flip-side of pressure on Moscow is growing
Western support for Kiev. The World Bank said it hoped, by the end of
this year, to have approved a new pipeline of Ukrainian projects -- for infrastructure
and social safety net programs, among others -- worth $3 billion. That would come on top
of an existing World Bank program worth $3.7 billion.
And the EU put more flesh on the bones of its 11 billion euro ($15 billion) package
of financial support announced last week. The European Commission proposed a temporary
reduction on duties on Ukrainian imports in a bid to support the ailing economy.
The unilateral trade measures will be worth about 500 million euros per year to Ukraine,
with most coming from reduced tariffs on agricultural products. The commission said it hoped the
cuts would take effect in June and run until November, pending the signing of a comprehensive
trade agreement with Ukraine. "In short, the EU will open its doors to exports
from Ukraine, giving a real boost to Ukrainian companies," the EU's top trade official Karel
de Gucht said. The U.S. has offered Ukraine $1 billion in
loan guarantees, and more assistance is expected to come in the form of an International Monetary
Fund program. A team of IMF experts is expected to conclude
an assessment of the economy this week.