Europe News

Russia sanctions 'do not have a deterrent effect'

A few days after Europe's leaders announced a ceasefire in Ukraine, the European Union issued a new list of sanctions this week against separatists in the region as well as Russian military leaders and politicians. But experts who spoke with CNBC cast doubt on how hard the new measures will hit Russia's economy.

New Russia sanctions: more message than meat?
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New Russia sanctions: more message than meat?

In all, 19 people and nine organizations made the list. The new sanctions extend mainly to Russian deputy ministers, parliamentarians and organizations, including separatist rebel and other paramilitary groups that the European Union believes have helped to fuel the war in Ukraine.

"They are not likely to have any economic impact, and are almost entirely political and symbolic in nature," said Fiona Hill, director and senior fellow at the Center on the United States and Europe at The Brookings Institution. She said the sanctions could in fact strengthen the resolve of Russian President Vladimir Putin.

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"We are in an escalatory cycle with Russia, and the sanctions add to the spiral. They do not have a deterrent effect," Hill said. "They are a signal, however, that there will be no quick return to business as usual with Russia. We now have to decide what else we will and can actually do to stem the conflict in Ukraine and deal with Russia over the longer term."

Eurasia Group President Ian Bremmer said he expects the sanctions to have little impact on the fighting that continues to rage on in the region. Pro-Russian separatists and Ukrainian troops exchanged fire on Tuesday around the , a major transportation hub.

Ukrainian servicemen leave an area near Debaltseve, Ukraine, Feb. 18, 2015.
Gleb Garanich | Reuters

European governments are wary of the effect that more stringent sanctions against some of Russia's biggest financial institutions and corporations would have on their own economies. The European Union is Russia's biggest trade partner, and Russian imports from the EU accounted for 123.2 billion euros ($139.7 billion) in 2012, according to the Permanent Mission of the Russian Federation to the European Union.

"Major steps in that direction could have negative ramifications for many European economies, which is making many Europeans hesitant to ratchet things up to the degree where sanctions would be more substance than message," Bremmer said.

"In this case, the impact is on the individual, and on a strategic level, these additional sanctions are symbolic in impact at best," said Ian Brzezinski, senior fellow at the Atlantic Council, who focuses on trans-Atlantic security. "It is a continuation of the West's incremental approach to this crisis that has proved to date woefully ineffective. Continued incrementalism in this crisis will only be a recipe for continued conflict."