Mar 17 - EU foreign ministers agree travel bans and asset freezes on 21 Russian and Ukrainian officials, in response to Moscow's seizure of Crimea and the region's attempt to break from Ukraine and join Russia. But as Ivor Bennett reports, the sanctions could end up harming the EU just as much.
The response was expected, but no less significant. EU foreign ministers agreeing sanctions on 21 Russian and Ukrainian officials, including politicians and military figures. For now it's asset freezes and travel bans. German Foreign Minister Frank-Walter Steinmeier hoping that will be enough. (SOUNDBITE) (German) GERMAN FOREIGN MINISTER, FRANK-WALTER STEINMEIER, SAYING: "We must now ensure that the already tense situation does not turn into further escalation which in the end carries the risk of a military confrontation between Russian forces and Ukrainian forces within Ukraine." The move's a response to Moscow's seizure of Crimea and the region's resulting referendum to break from Ukraine and join Russia. Escalating sanctions is seen as the EU's best weapon of attack. But it's impact on Russia may be limited. IG's Chris Beauchamp. SOUNDBITE (English) CHRIS BEAUCHAMP, MARKET ANALYST, IG, SAYING: "If you look at the broader Russian economy, it's actually quite well diversified. It's sort of spread its eggs around quite nicely. So even if you say if the entire EU decides to move for sanctions, that doesn't leave them entirely without help elsewhere. Particularly in the developing world, if you look at Africa and Asia. There are areas there that Russia can exploit really well to keep its economy afloat." Russia's reach for Crimea hasn't come without cost though. Its equities market has fallen 16 percent in the last 3 weeks. The rouble also tumbling, with investors now on the hunt for safe havens. One unlikely source could be Europe's much maligned southern periphery. The likes of Spain and Italy suddenly offering a glimmer of stability. Commerzbank's Michael Leister. SOUNDBITE (English) MICHAEL LEISTER, SENIOR RATES STRATEGIST, COMMERZBANK, SAYING: "Obviously it's not the same credit quality and asset yet but I think, what has really changed is that Spain and Italy trade very robust even during periods of heightened market volatility." EU leaders are due to meet on Thursday with further sanctions a very real possibility. It would certainly be a strong signal but it's not without risk. Russia is the EU's third biggest trading partner, and the supplier of 30 percent of its natural gas. Attempts to cripple it could well backfire.