EU Seeks to Limit Russia's Access to European Financial Markets

Russian President Vladimir Putin on 21 February ordered to recognise the DPR and LPR in Donbass following Kiev's failure to fulfill the provisions of the Minsk agreements and the restarting of hostilities along the line of contact between Ukraine's forces and the militia of the two republics.

The European Union wants to slap sanctions on Russian banks and limit Russia's access to European financial markets over Moscow's recognition of the Donetsk and Lugansk People's Republics (DPR and LPR), a joint statement by the presidents of the European Council and the European Commission has said.

The statement clarified that only those banks the EU believes are financing the Russian military and Moscow's operations in Donetsk and Lugansk will be affected. The presidents also noted that specifically the Russian state and government will be limited in its access to the EU's capital and financial markets if the sanctions package gets adopted.

"The EU has prepared and stands ready to adopt additional measures at a later stage if needed in light of further developments", European Council President Charles Michel and European Commission President Ursula von der Leyen said in the joint statement.

The EU presidents also said that sanctions will target Russian individuals and entities that either participated in the process of recognising the Donbass republics' independence or that are operating on their territory. The statement additionally said that the European bloc will ban all trade with the newly recognised republics.

"These sanctions will affect those who made the decision, who voted for the recognition. This is different from the package of sanctions that were adopted on Crimea. This package of sanctions will also affect organisations operating in the regions", spokesman for the European Commission, Eric Mamer, clarified.

Around the same time, the UK announced its own list of sanctions, which included freezing the assets of five Russian banks allegedly affiliated with the government, as well as economic sanctions against three Russian businessmen - Gennady Timchenko, owner of the investment company Volga Group, as well as Boris and Igor Rotenberg. Additionally, German Chancellor Olaf Scholz announced that the certification of the Nord Stream 2 pipeline would be suspended.

DPR, LPR's Independence Recognised Amid Ukrainian Offensive

European countries have presented another round of anti-Russia sanctions in response to Russia's decision on 21 February to recognise the independence of the DPR and LPR. President Vladimir Putin signed the order to do so and ink friendship treaties with the Donbass republics in light of the renewed attacks and shelling by Kiev's forces of the DPR and LPR. The new treaties allow Russia to deploy a peacekeeping mission in Donbass to protect the newly-recognised republics.

Putin stressed that Kiev had failed to do its part in the Minsk agreements. Prior to the order to recognise the DPR and LPR, Russian Security Council members reported to the president, expressing their opinion that Ukraine is not going to go forth with a diplomatic solution to the conflict in Donbass in the near future.

Over the past week, the two republics have reported numerous cases of attacks by the Ukrainian armed forces on their cities and positions, resulting in civilian casualties and the destruction of infrastructure and private property. Both the DPR and LPR said that their intelligence suggests that Kiev is planning a new offensive in the coming days. The Ukrainian government vehemently denied attacking or planning to attack the republics. At the same time, the OSCE mission reported thousands of cases of ceasefire violations in the days preceding the recognition of the DPR and LPR.