- POSTED: 15 Aug 2014 10:08
- UPDATED: 15 Aug 2014 10:09
Ukraine does not have economic clout to impose sanctions on Russia, says analyst.
MOSCOW: Ukraine's parliament has approved a law allowing sanctions to be imposed against Russia for its alleged support of separatists in Eastern Ukraine. The government has already compiled a list of 172 individuals and 65 entities that could be targeted by the sanctions, although the final list will not be published until President Petro Poroshenko signs the law into force.
Ukrainian Prime Minister Arseny Yatsenyuk announced that the law is Ukraine enacting its "right to defend its national interests" and the move has been hailed by many as a "historic step".
However, Russian analysts are warning that Ukraine is not strong enough economically to impose sanctions against Russia. Alexei Pilko, head of the Eurasian Communications Centre, said: "If sanctions really are introduced by the Ukrainian side, they will primarily hit the Ukrainian economy rather than Russia's. Given that Ukraine has no gas and it is not paying its gas bills, it will seriously hit Ukrainian economy in the coming few months."
But it is precisely against gas that Ukraine is expected to impose sanctions - two-thirds of gas exports from Russia to Europe are currently dependent on Ukraine as a transit point, a business which earns Ukraine US$3 billion (S$3.7 billion) a year. European utility companies are concerned that Ukrainian sanctions could disrupt gas supplies in the coming winter.
The law was signed at the same time as Russian President Vladimir Putin's official visit to Crimea, which was annexed from Ukraine by Russia in March - many in Ukraine saw this visit as an act of provocation. Muscovites, however, see little threat to Russia in Ukrainian sanctions.
Meanwhile, a Russian ban against Ukrainian beers and vodkas comes into force this week, as the rift between Kiev and Moscow deepens.