When Russia annexed Crimea in March, Western leaders hoped that carefully crafted "smart" financial sanctions, directed at Vladimir Putin's inner circle, plus some old-fashioned embargoes, for instance of high-tech equipment, might persuade him not to invade eastern Ukraine. Or at least, given that they had no stomach for stronger options, they said that was their hope. Either way, the response has so far been in vain. Sanctions have hurt the Russian economy, but they have had no discernible effect on Mr Putin's military strategy. Instead, Russia has imposed counter-sanctions of its own, halting food imports and closing local branches ot McDonald's, ostensibly on public-health grounds. The European Union has been the weak link in the West's response. It is a much more important trading partner for Russia than America is. This gives it more potential leverage, but the higher level of trade means some members' economies are very closely intertwined with Russia's-making it hard to reach the unanimous decisions necessary for sanctions to be imposed. The eu stance toughened after pro-Russian forces in eastern Ukraine shot down a Malaysian airliner in July. More individuals were targeted and new measures deprived Russian state-owned banks of their access to long-term financing in Europe's capital markets. This has led some of those banks to tap central-bank reserves in order to plug funding gaps.
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