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Ukraine crisis: EU to slap new sanctions on Russia 'on Friday' Ukraine crisis: EU to slap new sanctions on Russia 'on Friday'
(about 2 hours later)
The European Union has agreed to impose on Friday new sanctions on Russia over its role in the Ukraine crisis, diplomatic sources say. The European Union has agreed to impose further sanctions on Russia on Friday over its role in the Ukraine crisis, diplomats say.
This comes after sharp disagreements between member states on how to factor in a fragile truce between Ukrainian troops and pro-Russian rebels. The move is aimed at maintaining pressure on Russia, the sources said.
The sources said the move was aimed at maintaining pressure on Russia. Russia says it is preparing a response "commensurate with the economic losses" caused by the EU sanctions.
Russia is accused of arming the rebels in eastern Ukraine and sending its troops there. Moscow denies the claim. Nato says Russia still has about 1,000 heavily armed troops in eastern Ukraine - where pro-Russian rebels are fighting - and about 20,000 near the border.
The separatists have recently made big gains in eastern Ukraine. But the ceasefire agreed on Friday appears to be holding despite some sporadic shooting. The new sanctions are expected to tighten access to Western loans, especially for big Russian state oil companies, and expand a blacklist of Russian officials subject to visa bans and asset freezes. More rebel leaders will also go on that list.
Fighting in the eastern Donetsk and Luhansk regions has killed some 2,600 people since April. Russian Foreign Ministry spokesman Alexander Lukashevich called the new sanctions "an absolutely unfriendly step".
'Asymmetrical' response The EU decision followed a conference call involving a number of European leaders, including UK Prime Minister David Cameron.
The member states struggled to agree on how to factor in the fragile truce between Ukrainian troops and pro-Russian rebels. It took effect on 5 September and appears to be holding despite some sporadic shooting.
The rouble fell to a new low of 37.57 to the dollar on Thursday, after news about the EU sanctions broke. It also fell against the euro.
Shaky ceasefire
Western leaders and Kiev accuse Russia of helping the separatists in eastern Ukraine with regular troops and sophisticated weapons including tanks. Moscow denies the allegations.
The separatists have recently made big gains in the eastern Donetsk and Luhansk regions. The fighting has killed at least 3,000 people since April.
At urgent talks among 28 member states in Brussels on Wednesday, Germany pressed for the sanctions to put be into effect.At urgent talks among 28 member states in Brussels on Wednesday, Germany pressed for the sanctions to put be into effect.
But other countries said they wanted to wait while the ceasefire continued to hold.But other countries said they wanted to wait while the ceasefire continued to hold.
A spokesman for British PM David Cameron said several EU leaders took part in "a joint call" early on Thursday and agreed that the sanctions should take effect "by the end of the week", according to Reuters. A spokesman for Mr Cameron said several EU leaders agreed on Thursday that the sanctions should take effect "by the end of the week", according to Reuters.
The new sanctions are now expected to take effect on Friday - after the publication of the measures in the official journal of the EU. They will be published in the official journal of the EU, which puts them into effect.
The package was finalised last Friday, but its implementation was delayed because of the ceasefire agreed on the same day.The package was finalised last Friday, but its implementation was delayed because of the ceasefire agreed on the same day.
The new sanctions will target Russian oil companies Rosneft and Transneft and the petroleum unit of state gas monopoly Gazprom.The new sanctions will target Russian oil companies Rosneft and Transneft and the petroleum unit of state gas monopoly Gazprom.
Their access to financial markets will be restricted - a serious matter for Rosneft, which last month asked the Russian government for a $42bn (£25.2bn) loan.Their access to financial markets will be restricted - a serious matter for Rosneft, which last month asked the Russian government for a $42bn (£25.2bn) loan.
The sanctions would also expand the visa bans and asset freezes on Russian officials and entities, including separatist leaders in Ukraine.
The measures also cover dual-use goods which can be used for military purposes, defence equipment and some other sensitive technologies.The measures also cover dual-use goods which can be used for military purposes, defence equipment and some other sensitive technologies.
Russian Prime Minister Dmitry Medvedev has warned that Moscow will respond "asymmetrically" to further sanctions. Russian Prime Minister Dmitry Medvedev has warned that Russia might shut its airspace to European passenger planes, a move that "could drive many struggling airlines into bankruptcy".
A ban on using Russian airspace for European planes "could drive many struggling airlines into bankruptcy", he said.