EU chief: Russia could be cut off from markets and tech products

MUNICH — Moscow would see its access to financial markets and high-tech goods restricted under Western sanctions being prepared in case Russia attacks Ukraine, a senior European Union official said on Saturday.

The comments from Ursula von der Leyen, head of the EU’s Executive Commission, came as tensions over Russia’s intentions towards Ukraine escalated. US President Joe Biden said on Friday he was “convinced” that Russian President Vladimir Putin has decided to invade the neighboring country.

“The Kremlin’s dangerous thinking, which comes straight from a dark past, could cost Russia a prosperous future,” von der Leyen told the annual Munich security conference, where US Vice President Kamala Harris also spoke out.

Von der Leyen said the EU’s executive branch had worked out a “strong and comprehensive package” of possible financial sanctions against Russia with the US, UK and Canada.

“In the event of a Russian strike, we will limit access to financial markets for the Russian economy and (impose) export controls that will prevent Russia from modernizing and diversifying its economy,” she said. added. “And we have a lot of high-tech products where we have global dominance, which are absolutely necessary for Russia and cannot be replaced easily.”

British Prime Minister Boris Johnson said the UK was coordinating its sanctions closely with the EU.

“If Russia invades its neighbour, we will sanction Russian individuals and companies of strategic importance to the Russian state and make it impossible for them to raise funds on the London capital markets,” he told Munich. Johnson added that authorities would be looking for the “ultimate beneficiaries” of Russian companies and entities.

German Chancellor Olaf Scholz said that in a Tuesday meeting with Putin he “made it clear that any further violation of Ukraine’s territorial integrity will have high costs for Russia, politically, economically and geostrategically.”

So far, Western leaders have not specified what precise Russian action would trigger sanctions. A French official who was not authorized to be named publicly and spoke on condition of anonymity after Biden spoke with several counterparts on Friday said they were talking about an invasion of territory currently under the control of the Kyiv government.

“It is in the event of an invasion of this territory that … the massive sanctions that we are talking about would be triggered,” the official said.

Parts of eastern Ukraine have been under the control of pro-Russian separatists who have been fighting Ukrainian forces since 2014, the year Russia annexed Ukraine’s Crimean peninsula.

German Foreign Minister Annalena Baerbock, asked about Russian actions that would trigger sanctions, offered no details after a meeting in Munich with her counterparts from the Group of Seven industrial powers and Ukraine.

“A violation of Ukraine’s integrity and sovereignty is a violation of Ukraine’s integrity and sovereignty,” Baerbock said. “You can’t say that one geographical part is a little more Ukraine and another is a little less Ukraine.”

She said Western officials have made it clear that a real invasion is not the only possible scenario, but “are prepared for all situations”. Using a chess analogy, the German minister said: “If you present your next five moves in public, you won’t do particularly well.”

In Munich with other members of the US Congress, House Speaker Nancy Pelosi said sanctions could include the SWIFT banking system, which could cut Russia off from most international financial transactions.

“It’s still a matter of negotiation,” Pelosi said.

Kicking Russia out of SWIFT would also hurt other economies, including those of the United States and key ally Germany.

Asked if Congress, which is on recess next week, would return early if Russia invaded Ukraine, Pelosi said “the president has the power to implement these sanctions without Congress.”

Whatever actions Russia takes, Pelosi said there is a price to pay for what Putin has already done.

“You can’t bully the world and walk around and you’re off the hook,” she said.

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Geir Moulson reported from Berlin. Angela Charlton in Paris and Jill Lawless in London contributed to this report.

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