EU leaders agree 'sanctions that bite' Russia

EU leaders wrapped up an emergency summit Friday with an agreement to punish Moscow for its invasion of Ukraine with "severe" sanctions targeting its financial, energy and transport sectors.

"We need sanctions that bite," Belgian Prime Minister Alexander De Croo said as he went into the Brussels meeting late Thursday -- the same day Russia blasted Ukrainian military targets and sent tanks and paratroopers into its pro-Western neighbour Ukraine.

The leaders quickly agreed "further restrictive measures that will impose massive and severe consequences on Russia for its action".

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Summit conclusions published at the start of the meeting said, "these sanctions cover the financial sector, the energy and transport sectors, dual-use goods as well as export and export financing, visa policy," as well as adding more Russian individuals to an EU travel ban and asset freeze list.

The sanctions -- which come on the heels of a smaller packet of measures adopted by the EU late Wednesday, just before the Russian invasion -- will come into effect once legal texts are drawn up then formally approved by member states' foreign ministers and published in the EU's official journal.

That was expected to happen as early as Friday or Saturday.

The leaders also discussed how to ramp up political, economic and humanitarian support for Ukraine.

Earlier, European Commission President Ursula von der Leyen said the proposed sanctions package aims to hobble economic growth in Russia, make borrowing more costly, raise inflation, intensify capital outflows and "gradually erode its industrial base".

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Her executive proposed adding two Russian private banks -- Alfa Bank and Bank Otkritie -- to the list of sanctioned entities, bar Russian state-owned companies listing on EU stock exchanges, and ban lending to state-owned enterprises in the aerospace, automotive and shipping sectors, according to a list seen by AFP.

An EU export ban would apply to equipment and technology Russia needs to upgrade its oil refineries -- and on all aircraft and aircraft parts, it said. Export restrictions would apply to dual-use goods.

Russians would also be prohibited from putting deposits over 100,000 euros ($112,000) in EU banks or from purchasing euro-denominated securities, in an effort to hit oligarchs, it said.

The visa policy change would require Russian holders of diplomatic passports to apply for visas to enter the EU.

And the commission proposed putting all members of Russia's lower house of parliament who are not yet sanctioned on its travel ban and asset freeze list, along with members of the Russian National Security Council and the Belarusian government and military deemed to have facilitated the invasion.

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While the EU agreement on the outline of the sanctions was rapid, there were clear divisions over the option of kicking Russia out of the SWIFT network that the world's banks use to securely send messages in order to carry out transactions.

Ukrainian President Volodymyr Zelensky has urged the West to use that lever, which has already been implemented to devastating effect against Iran's banking sector.

But US President Joe Biden, speaking in Washington as the EU summit started, said, "It is always an option but right now that's not the position that the rest of Europe wishes to take."

That assessment was borne out by German Chancellor Olaf Scholz, who suggested SWIFT and other measures should be kept "for a situation where it might be necessary, for other things".

Other EU leaders, though, chafed at that stance.

"Talk is cheap... we have to be united around massive sanctions, severe sanctions," Polish Prime Minister Mateusz Morawiecki said.

Latvia's prime minister, Krisjanis Karins, said, "SWIFT, I think it's the very right direction, I think we should go in that direction", but only if other jurisdictions outside Europe also adopted that tactic.

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