The EU joins the U.S. with a tougher set of sanctions against Russia over Ukraine. Could they kick off a new round of escalation in the most bitter confrontation between Moscow and the West since the Cold War? David Pollard reports.
Day thirteen since Malaysian Airlines MH17 was, it seems, shot out of the sky. Still the task of recovering the victims goes on - when fighting allows. It's been a stop-start process for building sanctions against Russia too. But finally some semblance of a concerted bid by Europe and the U.S. to up the pressure. Ironically, Europe could take much of the pain. IDEAglobal research director Mike Gallagher. SOUNDBITE (English) MIKE GALLAGHER, DIRECTOR OF RESEARCH, IDEAGLOBAL: ''There are some sanctions here that have a bit of bite, and consequently the business sector may start to factor this in as an issue. And if that's the case, it could be another headwind for the European recovery.'' On the face of it, the new measures are an escalation to wider ''sectoral sanctions''. Trade of equipment for oil and defence and ''dual use'' technology will be restricted. Russia's state run banks barred from raising funds in Europe's capital markets. The backlash could be widely felt. BP has already warned it could be hurt because of its stake in Russian oil giant, Rosneft. Total - a major investor in Russia - says it's stopped buying shares in gas producer Novatek. The City of London may have to brace itself. Germany too, says Robert Halver of Baader Bank. SOUNDBITE (German) HEAD OF CAPITAL MARKET ANALYSIS AT BAADER BANK, ROBERT HALVER: "We will suffer as well, especially the German middle class who is very heavily invested in the Russian economy. So both sides should work on finding a diplomatic solution. Because economic sanctions do not solve political problems." Others agree that - while they might hurt the Russian economy - the sanctions may have little effect on their other main target. SOUNDBITE (English) MIKE GALLAGHER, DIRECTOR OF RESEARCH, IDEAGLOBAL: ''We risk having a tit-for-tat situation .... I don't think this is going to force a U-turn from Putin. I think the political commentators very much feel that he is likely to sort of maintain the current course and this risks further escalation between the West and Russia.'' European gas users can breathe easily for now, 'though. Russia's natural gas industry - which supplies Germany and much of Europe - is not on the sanctions list. And nor are previous contracts - meaning France can still go ahead with delivery of a warship it's already sold to Russia.