Several senior European politicians on Tuesday raised the possibility of new sanctions against Russia to punish it for capturing three Ukrainian vessels at sea, an incident the West fears could ignite a wider conflict.
Financial markets have responded to the prospect of new Western sanctions that could hurt Russia’s economy, though the rouble on Tuesday clawed back some losses from the previous day as investors bet any sanctions would not be swift.
After Russia opened fire on and seized the Ukrainian boats and crews on Sunday near Crimea – which Russia annexed from Ukraine in 2014 – Moscow and Kiev have tried to pin the blame on each other.
President Vladimir Putin told German Chancellor Angela Merkel by phone on Monday that Moscow was ready to provide more details to bolster its version of events. Moscow says Kiev deliberately provoked it in order to trigger a crisis.
Merkel, who also spoke on Monday with Ukraine’s President Petro Poroshenko, called for de-escalation and dialogue.