The shooting down of Malaysia Airlines Flight 17 may finally force Europe to impose tougher sanctions on Russia.
Since Moscow annexed Crimea four months ago, European leaders have worried about possible blowback if they punished Russia. The reason: the extensive trade ties between Europe and its powerful neighbour.
Europe is set to take a harder stance. Officials are meeting Tuesday to discuss ways of pressing Russia to end its support for rebels in eastern Ukraine. U.K. Prime Minister David Cameron says the weight of evidence suggests the rebels brought the plane down.
The U.S. government, whose lead Europe might now follow, has taken a tougher approach -- targeting Russian companies and oligarchs, some close to President Vladimir Putin. The sanctions haven't gone after broad sectors of the Russian economy, but they have set key players scrambling.
Among the key targets of sanctions, Rosneft, Russia's biggest oil company; part owned by BP and partner to ExxonMobil.
The company has lost access to U.S. sources of long-term finance. It is, however, cash rich and can still export oil, and is expected to complete its purchase of Morgan Stanley's oil trading business.
Novatek, Russia's largest independent natural gas producer, has lost access to new U.S. funding. An estimated 46% of its debt is in U.S. dollars, according to analysts at BNP Paribas. It should be able to find alternative long-term investors.
VEB arranges payments for the Russian government; its chairman is Russian Prime Minister Dmitry Medvedev. The bank will have to reduce its exposure to U.S. dollars in the future. But it should be able to manage its financing through 2015 by tapping markets in other currencies, local investors and the Russian central bank.
