Trade sanctions against Russia agreed by EU countries will come into force tomorrow, it was reported today.
Although details of the sanctions have yet to be unveiled, they are expected to be the toughest imposed on Russia so far, including strict measures against Russian energy companies that are also likely to hit Western oil firms, such as BP and Exxon Mobil, which have partnerships with Russian companies.
There are expected to be further measures preventing Russian banks and arms companies from accessing international capital markets, capping maturity periods of credits and loans to Russian firms to 30 days, from 90 before. Individuals, including Vladimir Putin, are also likely to be targeted.
The sanctions were originally proposed during a meeting of European leaders two weeks ago, but have been put off twice as politicians waited to see what the impact of a ceasefire in eastern Ukraine would be. AP reported that four diplomats said they will be "reversible" if the situation in the Ukraine eases.
It looks likely that the US will follow Europe's example, strengthening its already-strict sanctions against Russia. During the last two rounds of measures, European currencies and equities were disproportionately affected. Today the FTSE 100 fell 0.41 per cent on the news, while the Micex fell 0.34 per cent. The rouble fell 0.6 per cent against the dollar and 0.48 against the euro.