Russia Defiant In Face Of Unprecedented Western Sanctions

A sign showing VTB24 bank's logo is seen above the bank's headquarters in Moscow, Russia.

Russia says unprecedented Western sanctions imposed on its financial, arms, and energy sectors over the Ukraine crisis will hurt the United States and the European Union.

The sanctions unveiled on July 29 are the toughest measures yet the European Union and the United States have taken against Russia over its alleged support for separatists fighting government forces in eastern Ukraine.

Russia's Foreign Ministry on July 30 called the latest EU sanctions a "thoughtless and irresponsible step" and said they will "inevitably" lead to higher energy prices in Europe.

Earlier on July 30, the Foreign Ministry warned Washington of "real losses" from what it called its "destructive and short-sighted" sanctions policy.

Vladimir Chizhov, Russia's envoy to the European Union, said on July 30 that the new EU sanctions would lead nowhere and do not contribute to resolving the Ukraine crisis.

Russia's Central Bank said it would take "adequate measures" to support targeted institutions which include the country's second-largest bank, VTB.

VTB called the sanctions "politically motivated" and "unjust" and said it was ready to borrow on financial markets outside the European Union and the United States.

The United States on July 29 added three banks and a shipbuilding company to its list of sectoral sanctions.

The move came after the EU announced for the first time broad economic sanctions against Russia, moving beyond travel bans and asset freezes on individuals and companies.

The EU sanctions will shut major state-owned Russian banks -- whose names are yet to be made public -- out of European capital markets, and restrict sales of dual-use goods and sensitive technologies.

Obama said on July 29 that "Russia's actions in Ukraine and the sanctions that we've already imposed have made a weak Russian economy even weaker."

EU President Herman Van Rompuy said the new EU sanctions were a "powerful signal" to the Russian leadership. But he said the EU could reengage with Russia if it reverses course on Ukraine.

The new EU and U.S. sanctions come after the downing of a Malaysian airliner in eastern Ukraine earlier this month, killing all 298 people on board.

The West blames pro-Russian separatists for shooting down the plane and Moscow for supplying the equipment necessary to do that.

Moscow denies supplying weapons, funds and fighters for the separatists.

With reporting by AFP, Reuters, and Interfax