Rep. Ed Royce: New Sanctions Will Pose 'Serious Consequences' for Russia

Wednesday, 30 Jul 2014 02:24 PM

By Sandy Fitzgerald

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A new round of sanctions ordered Tuesday against Russia will pose serious consequences on the Russian economy, House Foreign Affairs Committee Chairman Ed Royce says, and the orders show Europeans are becoming more nervous about increasing military action on the Russian border.

On Tuesday, the European Union and United States unveiled sanctions that restrict sales of arms and oil industry equipment. In addition, Russian state banks are now banned from raising money in Western capital markets. The sanctions are the strongest international steps to be taken against Moscow over its support for rebels in Ukraine.

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Such sanctions will "certainly hit the capital markets, the stock markets there, and it's causing inflation," said Royce, a Republican from California, on MSNBC's "Morning Joe" Wednesday.

But the actions also send a warning, said Royce.

"I think the Europeans have gotten nervous about the artillery fire over the [Ukrainian] border and the armor that Russia is massing on the border, and I think that their concern here is to now send a message that, 'hey, we're serious about this,'" said Royce. "'You cannot send Russian troops across that border. You've got to quit firing artillery across the Russian border.' So I think that this is very serious in terms of the consequences on the Russian economy."

The French, however, were not asked to stop delivery on two assault ships they are building for the Russians as part of the sanctions, which Royce believes was a serious omission.

He noted that Democratic Rep. Eliot Engel of New York has been trying to convince the United Nations to purchase the ships, but the sanctions do not include contracts already in force.

"That's the way the French wrote that particular agreement or carve-out," said Royce. "It's unfortunate that we don't have the unified support that we'd like to see. But nevertheless, that said, this is going to severely constrict and cause a contraction on the economy in Russia, [and] put a lot of leverage into negotiation overall."

In addition, said Royce, the sanctions will impact many people around Russian President Vladimir Putin, whether or not they impact him directly.

The sanctions could also slam Russia's lucrative energy sector, Royce pointed out.

"Fifty-two percent of the budget of the Russian government frankly comes from their profits from the energy sector," he said. "What Europe is doing is blocking the transfer of that technology into Russia to further expand the energy sector."

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