(Bloomberg) — EU leaders backed a broad sanctions package Thursday that will limit Russia’s access to Europe’s financial sector and restricting key technologies.
The sanctions will impose “massive and severe consequences on Russia” for its invasion of Ukraine, European leaders said in a joint conclusion from an emergency summit in Brussels. The leaders approved the outlines of the sanctions, with the final details to be finalized and formally adopted in a meeting scheduled for Friday.
European Commission President Ursula von der Leyen said in a news conference early Friday that the sanctions will be targeting 70% of Russia’s banking sector.
The EU will also broaden sanctions on individuals, as well as criteria to target wealthy Russian oligarchs, and tighten visa rules for diplomats, making asset freezes and travel bans more effective, said people familiar with the matter.
The financial sanctions included in the package, which have been closely coordinated with the U.S. and the U.K., are aimed at restricting Russia’s access to international markets. The U.S. and U.K. announced their packages of sanctions on Thursday, with many provisions mirroring ones the EU adopted earlier this week or green-lit on Thursday.
Two additional Russian banks — Alfa Bank and Bank Otkritie — would be added to the list of financial institutions prohibited from borrowing or buying securities. It would prohibit the listing of new shares of Russian state-owned enterprises on EU exchanges and blacklist several state-owned companies in the shipbuilding and shipping industries. The people familiar with the proposal described it on the condition of anonymity since it is still under discussion.
The EU would also move to stop financial inflows from Russia into the EU by imposing limits on bank deposits and bar Russians from investing in EU securities.
“These sanctions will increase Russia’s borrowing costs, raise inflation and gradually erode Russia’s industrial base,” von der Leyen said. “It will have maximum impact on the Russian economy and the political elite.”
In one of the strongest elements of the package, the EU has worked in lockstep with the U.S. to introduce export controls on dual-use and high-tech goods, with a particular focus on electronics, computers, telecom and information security, sensors and lasers and marine applications.
“Our measures will weaken Russia’s technological position in key areas, actually from which the elite makes most of their money,” von der Leyen said earlier Thursday. “And this ranges from high-tech components to cutting-edge software. This will also seriously degrade the Russian economy in all areas in the future.”
The proposal also includes an export ban on aircraft, aircraft parts and related equipment, as well as a ban on the sale of equipment and technology needed to update Russian oil refineries to modern environmental standards.
The leaders also discussed even stronger measures, such as banning Russian financial institutions from interbank operations in euros, such as clearing, and cutting Russia off Swift, the international payments system, according to people familiar with matter. But those steps are less likely for now, with some western European governments strongly opposing a Swift cut-off. The bloc is also unlikely to sanction Russian President Vladimir Putin directly. One person said some leaders were planning to push for a more ambitious package, but other states prefer an incremental approach.
Another topic that EU leaders addressed Thursday night was a further round of sanctions that would include Belarus for its role in Russia’s attack on Ukraine.
French President Emmanuel Macron said early Friday that Belarus was complicit in Russia’s attack on Ukraine and that it would face penalties soon.
(Updates with von der Leyen, Macron quotes starting in third paragraph)
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