Last updated: May 2, 2014 11:22 pm

US and Germany warn of Russia sanctions

A pro-Russia armed man greets marchers during May Day celebrations in the eastern Ukrainian city of Slavyansk on May 1, 2014. A crowd of some 300 pro-Russian militants attacked the prosecutor's office in the eastern Ukrainian city of Donetsk on May 1, AFP reporters on the scene said. AFP PHOTO / VASILY MAXIMOV (Photo credit should read VASILY MAXIMOV/AFP/Getty Images)©AFP

A pro-Russian armed man and marchers during May Day celebrations in the eastern Ukrainian city of Slavyansk

The US and Germany warned on Friday that they would impose more sanctions on important sections of Russian industry if Moscow impeded the presidential elections in Ukraine this month.

Setting a new trigger for introducing broader economic sanctions on Russia, German Chancellor Angela Merkel and US President Barack Obama said the ability to hold the May 25 elections in Ukraine was now the main factor.

Until now, western governments have said that only an outright invasion of Russian forces would trigger the move to sectoral sanctions that would impose penalties on certain Russian industries rather than just individuals.

However, speaking at a press conference in Washington on Friday, both leaders emphasised that the sanctions policy would now be guided by whether the Ukrainian authorities could conduct elections in the midst of widespread instability in eastern parts of the country.

Ms Merkel said “further sanctions will be unavoidable” if it were not possible to stabilise the situation in the east of the country before May 25, adding that: “What we’re talking about here will be sectoral measures in the context of certain branches of industry.”

“If in fact we see the disruptions and the destabilisation continuing so severely that it impedes elections on May 25, we will not have a choice but to move forward with additional, more severe sanctions,” Mr Obama said. “The next step is going to be a broader-based sectoral sanctions regime.”

Neither leader went into detail about potential targets of sectoral sanctions, although both implied that it would not involve the oil and gas sector, where Europe depends on imports from Russia. Mr Obama said sanctions could hit defence or finance, including trade credits.

The two leaders are facing contrasting political pressures at home, with Republican senators introducing legislation this week calling on the US to impose tougher sanctions, while German industry has urged Ms Merkel to avoid a more confrontational approach to Russia.

While both leaders tried to show a united front on Russia, Ms Merkel made no secret of her displeasure at revelations about the surveillance activities of the US National Security Agency, which had been tapping her phone.

She insisted that there remained “differences of opinion on what sort of balance to strike between the intensity of surveillance and ... protecting individual privacy and individual freedom and rights”. A fresh dialogue would be established between the two governments to discuss the issue. Mr Obama said it “pains” him to see the “strains” that the NSA disclosures have caused in relations with Germany.

Meanwhile, western powers and Russia accused each other of hypocrisy on Friday at a United Nations Security Council debate on Ukraine.

In unusually heated exchange, French ambassador Gerard Araud said Russia had “released bands of thugs on Ukraine” and was now “suddenly discovering this mixture might escape its control”, while US ambassador Samantha Power said that Moscow was “trying to insult the intelligence of the world community” by calling an urgent meeting of the council.

Vitaly Churkin, the Russian ambassador, accused the west of double standards because it was interfering in the affairs of Ukraine. He said that military operations in the eastern part of the country that included Ukrainian soldiers and “illegal ultranationalist groups” had also seen the presence of “English-speaking foreigners”.

“We would insist on the inadmissibility of any sort of outside interference in what’s going on in Ukraine,” he said.

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