President Barack Obama escalated sanctions against Russia on Wednesday by targeting a series of large banks and energy and defense firms in what officials described as the most punishing measures to date for Moscow’s intervention in Ukraine.
While the latest moves do not cut off entire sectors of the Russian economy, as threatened in the past, the administration’s actions go urther than the financial and travel limits imposed so far on several dozen individuals and their businesses. The new measures will severely restrict access to U.S. debt markets for the targeted companies.
“We have emphasized our preference to resolve this issue diplomatically, but we have to see concrete actions and not just words,” Obama told reporters on Wednesday evening in remarks in the White House briefing room.
He repeated that Russia needed to halt the flow of fighters and weapons across the border and support peace talks.
Firms targeted include Rosneft, the state-owned oil company and largest oil producer; Gazprombank, the financial arm of Gazprom, the giant state-controlled natural gas producer; Novatek, another Russian natural gas producer that has been competing with Gazprom, and VEB, the state economic development bank.
Meanwhile, insurgents bade tearful farewells as they loaded their families onto Russia-bound buses and began hunkering down for what could be the next phase in Ukraine’s conflict: bloody urban warfare.
While the pro-Russian rebels in the east have lost much ground in recent weeks and were driven from their stronghold of Slovyansk, many have regrouped in Donetsk, an industrial city that had a population of 1 million before tens of thousands by some estimates fled for fear of a government siege. The rebels also hold the city of Luhansk.
Despite the government’s desire to minimize civilian casualties, Ukraine’s forces could find themselves dragged into grueling warfare inside the cities.
U.N. Security Council spokesman Andrei Lysenko said that in Luhansk, rebels lobbing artillery at government troops were taking up positions in residential and industrial zones.
Taking the fight into the heart of rebel-held cities would involve a type of combat for which Ukrainian soldiers are not believed to be adequately prepared.
“It’s a very complicated strategic task — not only when it comes to tactics, also in terms of equipment. When rebels are putting missile launchers on school rooftops, what do you do?” said Orysia Lutsevych, a research fellow at Chatham House in London.
Matthew Clements, an analyst with security affairs consultancy HIS, said Ukraine may, instead of entering Donetsk and Luhansk, surround the cities, “cut the separatists off from supplies of fighters and equipment, and undertake gradual operations against the cities and suburbs in an effort to wear the separatists down.”