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More Russian sanctions - will they work?

Monday, June 22, 2015 - 02:12

European foreign ministers have extended sanctions on Russia's energy, finance and defence industries until the end of January 2016. As Elena Casas reports, that comes as Belgium unblocks Russian bank accounts frozen last week in a dispute over the assets of defunct oil firm Yukos.

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Another week, another EU summit focused on Greece. But the foreign ministers were meeting too with a different agenda - migrants and sanctions on Russia. The measures hitting Russia's energy, defence and financial sectors were first imposed in July 2014 for a year - now, they've been extended to the end of January 2016. EU leaders say sanctions will stay until February's Minsk ceasefire deal in Ukraine is fully implemented. Russia continues to deny it's involved in the war - and Jeremy Batstone-Carr from Charles Stanley says sanctions may be counter productive. (SOUNDBITE) Jeremy Batstone-Carr, Chief Strategist, Charles Stanley, saying (English): "The more pressure brought to bear on Russia from outside, tends only to coalesce support on the part of the Russian population, for Vladimir Putin and the Russian authorities, so to some extent, the more pressure the West applies, the less effective it is." The move comes after Belgium announced it has unblocked Russian state accounts. They were frozen to cover a court settlement compensating shareholders in Yukos. The defunct oil company was once Russia's biggest oil producer. But after its owner Mikhail Khodorkovsky fell foul of Putin and was jailed, most of its assets were acquired by state oil firm Rosneft. An international court ruled last July that Russia should pay Rosneft shareholders 50 billion dollars for expropriating those assets. For President Putin, the decision is just another attempt by foreign authorities to attack Russia. RUSSIAN PRESIDENT VLADIMIR PUTIN, SAYING: "The fact that Yukos shareholders are trying to receive extra money from Russia - there is nothing new here. We will be defending our interests within the framework of civilised judicial process." Despite Putin's defiant tone, sanctions have had a real impact on the Russian economy. Middle class shoppers are missing European wines and cheeses - while capital flight has soared and interest rates have jumped to 11.5 per cent. ////

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More Russian sanctions - will they work?

Monday, June 22, 2015 - 02:12