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Russians optimistic despite tougher sanctions

The European Union (EU) has announced a new round of sanctions against Russia over Moscow's perceived support for pro-Russian rebels fighting government forces in Ukraine.

MOSCOW: The European Union (EU) has announced a new round of sanctions against Russia over Moscow's perceived support for pro-Russian rebels fighting government forces in Ukraine.

Russia has denied the accusations, insisting that it has tried to end the fighting in eastern Ukraine through diplomatic efforts, and accuses the West of failing to use its influence over Kiev to stop the violence in the east of the country. Despite the tougher sanctions, Russians remain patriotically optimistic.

Russia's finance, defence and energy industries have all been targeted in the latest rounds of sanctions, with more individuals added to the EU list of visa bans and asset freezes.

But some Russian analysts are skeptical over whether it's the sanctions that will harm the Russian economy or other factors. Former economics minister Andrei Nechayev said: "Even before any sanctions, the most optimistic forecast for this year (for Russia's economy) was about 1% (growth), while the majority of experts were estimating 0.5% or even negative growth. So it's difficult to draw a line between where it's just the existing downward trend, and where the sanctions' impact might be."

There's international support, with Japan planning sanctions too. Russia calls the move "unfriendly".

Russian Foreign Minister Sergei Lavrov has said that Moscow will not be responding with sanctions of its own, adding that his country will "overcome any difficulties that may arise in certain areas of the economy". He even suggested that the sanctions could make Russia more economically independent and confident.

Russian state media has focused on what President Vladimir Putin earlier described as a 'Boomerang effect', focusing on British companies like BP being affected by sanctions against Rosneft, Russia's largest oil company.

Similarly, many Muscovites do not seem worried, with the latest figures from the Levada Independent Polling Agency indicating that over 60% of Russians are not afraid of sanctions.

"Well, our country (has) lived under sanctions for 70 years, and we can survive now, we're a self-sufficient state," said a Russian. "Of course there will be an economic reorientation in our country and other regions, but these sanctions harm the West and America too," said another. "You're not going to scare me with sanctions. We'll survive, but will they survive without Russia? That is the question," said a third Russian.

But foreign investors are worried, and have hurried to sell Russian corporate bonds before the sanctions take effect. This has led to a significant devaluation of bonds denominated in dollars and euros, and Russia's ruble fell to a ten-week low as the sanctions were anticipated.

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