Russia vows vendetta for toothless US-led sanctions

Russia has rejected toothless US-led sanctions against Russian and Ukrainian officials following the Crimea referendum, vowing to retaliate in a tit-for-tat sanctions war.

On Monday, EU foreign ministers agreed to slap travel bans and asset freezes on 13 Russian nationals and 8 people from the Crimean territory they deem responsible for the independence referendum in Ukraine’s autonomous region of Crimea.

Meanwhile, the White House ordered similar measures in the wake of the referendum in Crimea and imposed sanctions against 11 individuals, including two top advisers to Russian President Vladimir Putin, as well as to ousted Ukrainian president Viktor Yanukovych.

Russian Deputy Prime Minister Dmitry Rogozin, who has been targeted by the US sanctions, treated the bans with derision, tweeting that the move by President Barack Obama must have been the work of a “prankster”.

The Russian market also dismissed the sanctions, with the rouble doing well on the day.

“So far the sanctions seem fairly toothless and much less severe than had been expected last week. From the market’s perspective, the biggest risk was that the referendum would trigger tough sanctions against Russia that could lead to another cold war,” Kathleen Brooks, research director at Forex.com, told AP.

A senior EU official warned on Monday that the 28-member bloc and Ukraine could suffer gas shortages by the end of October if Russia plays “energy politics” and cuts off supplies in the diplomatic war over the future of Crimea.

Russian President Vladimir Putin on Monday signed a decree formally recognizing Crimea as a sovereign state, following the peninsula’s declaration of independence.

According to the decree, posted on the Kremlin website, Moscow recognizes Crimea as an independent state based on “the will of the people of Crimea.”

Crimea declared independence from the former Soviet state and formally applied to become part of the Russian territory following the referendum.

Ukraine has been gripped by a political crisis since November 2013, after Yanukovych refrained from signing an Association Agreement with the European Union in favor of closer ties with Russia.