US readies further sanctions on Russia

The US said yesterday it was prepared to impose further targeted sanctions on Russia over its actions in Ukraine and that European leaders had agreed to coordinate on steps to make Moscow pay.

The crisis escalated when armed pro-Russian separatists in the eastern city of Slaviansk seized a bus carrying international mediators. A separatist leader said the mediators were believed to have a Kiev “spy” among them.

The White House said US president Barack Obama and European allies all felt that Russia had escalated tension in eastern Ukraine, where pro-Moscow separatists have refused to leave official buildings they have occupied. But it gave no details of what the sanctions might be, or when it planned to enact them.

Ukraine sent troops to try to dislodge the separatists from Slaviansk on Thursday, killing up to five rebels in what it said was a response to the kidnapping and torture of a politician found dead last Saturday.

Special forces launched a second phase of their operation yesterday by mounting a full blockade of Slaviansk, the rebels’ military strong- hold, an official on the presidential staff said.

One of its military helicopters was hit by rocket fire and exploded while on the ground at an airport near the city, said the Defence Ministry.

Pro-Western leaders in Kiev, who took power in February after Moscow-ally president Viktor Yanukovych fled following mass protests against him, say the rebels are being directed by Moscow. Russian troops seized Crimea soon after Yanukovych fled.

The standoff has led to heavy capital flight from Russia, prompting credit rating agency Standard & Poor’s to cut the country’s ratings. That forced Russia’s central bank to raise its key interest rate to reverse a drop in the ruble.

Russia’s foreign minister, Sergei Lavrov, accused authorities in Kiev of waging “war on their own people”.

The Kremlin says it has the right to defend Russian speakers anywhere if they are under threat and has deployed extra troops on the border with Ukraine, which Nato says number up to 40,000.

They began military exercises on Thursday and Ukraine said they had approached to within 1km of its border and that it would treat any incursion as an invasion.

Ukraine’s acting president accused Moscow of supporting “terrorism at the state level” against his country for backing the rebels, who it blames for the politician’s murder.

The White House statement came after Obama pressed four European leaders on the need for more robust action against Russia. Europe is reluctant to impose tough sanctions due to its reliance on Russian gas and trade ties with Moscow.

“The president noted that the United States is prepared to impose targeted sanctions to respond to Russia’s latest actions,” it said. “The leaders agreed to work closely together, and through the G7 and European Union, to coordinate additional steps to impose costs on Russia.”