West eyes more curbs on Russia

FOREIGN secretary William Hague has accused Russia’s President Putin of a “gross, deliberate and premeditated violation of the independence and sovereignty of Ukraine,” after pro-Russian forces ignored warnings to leave areas of eastern Ukraine.

Arriving for talks in Luxembourg with EU foreign ministers yesterday, Hague said Russia’s claims that it is not behind the recent clashes are without a shred of credibility.

The assembled ministers announced beefed up sanctions against individuals involved in the clashes and blocked their financial assets in the EU. Former Ukrainian President Viktor Yanukovych is understood to be on the new list, along with three others.

Hague stressed that further sanctions will take time and ministers are still working on a third tier, understood to include stronger financial restraints.

The announcement came as pro-Russian forces ignored warnings from the interim Ukrainian government to leave a number of towns in eastern Ukraine. In Horlivka, a police station was taken over by force and in the city of Sloviansk, where some of the most violent fighting took place on Sunday, pro-Russian forces set up a roadblock and remained in the police station and state security building.

Warning against further escalation Hague said: “There do have to be consequences to a further and further escalation by Russia of this crisis,” adding: “There can't be any real doubt that this is something that has been planned and brought about by Russia.”

In a phone call yesterday, Putin sought to convince President Obama that Russia has no hand in the attacks. The White House is understood to have been unconvinced, with press secretary Jay Carney warning that America is considering what kind of assistance it can provide to Ukraine.

There is concern about the impact fresh violence will have on the financial stability of Ukraine and the surrounding region. Following the meeting of EU ministers yesterday, customs duties to Europe were lifted and loans of up to one billion euros were announced to help with mounting payments.

Yesterday Ukraine’s central bank doubled a key lending rate on its currency the hryvnia. The overnight loan rate was raised from 7.5 to 14.5 per cent in an attempt to reduce pressure on the currency. The rouble was down 0.8 per cent against the dollar and Russian shares tumbled 1.3 per cent at market close.

Palladium spot prices rose to peak at above $815 (£487) during the day, reaching the highest level seen in nearly three years. Russia is the world’s largest producer of the precious metal. Crude oil was up 0.65 per cent to $108.03 a barrel.

Gold prices also rose by 0.7 per cent to around $1,330 during trading hours, the highest since mid-March, amid concerns further sanctions could hit the country’s mining output.