Russian markets are plunging and its economic growth prospects are looking grim in the face of new sanctions by the United States and the European Union over the shooting down of the Malaysian Airlines Flight MH 17 allegedly by Russia assisted separatists in eastern Ukraine.
Russian markets slumped 1.4 percent Monday, extending last week's 5 percent slide, according to Reuters, which also noted that the nation's stocks are this year's worst performers among emerging market, having lost 12 percent in dollar terms.
The flight MH 17, with 298 people and crew aboard, crashed Thursday near the town of Torez in the Donetsk region of eastern Ukraine after being hit by a missile. The plane, Boeing 777, was on its way from Amsterdam to Kuala Lumpur, and flying at about 33,000 feet over the region that has been troubled by fighting between Ukrainian forces and pro-Russia militants seeking to declare the area an independent republic.
U.S. officials believe Russia supplied sophisticated missile launchers to separatists and then sought to move them back across to Russia after the Malaysian plane crashed.
A rebel leader in Donetsk has said the plane's black-box flight recorders have been found, according to BBC.
A day before the plane crash, the Treasury Department announced new sanctions against natural gas producer Novatek, two banks and eight defense firms, saying U.S. companies will not be allowed to engage in any "new debt of longer than 90 days maturity or new equity."
While President Barack Obama announced first major sanctions on Russia in March, further and stricter sanctions are now likely to follow the shoot-down of the Malaysian plane. The fear of sanctions is causing serious concerns among Russian businesses.
"The economic and business elite is just in horror," Igor Bunin, who heads the Center for Political Technology in Moscow, tells Bloomberg.
There were 193 people from the Netherlands – including 1 dual Netherlands/USA citizen – on the flight, according to the airline. Also aboard were 43 citizens of Malaysia; 27 from Australia; 12 from Indonesia; 10 from the United Kingdom; 4 each from Germany and Belgium; 3 from the Philippines; and one each from Canada and New Zealand.
"We know for certain that in the last month there's been a major flow of personnel and weapons," U.S. Secretary of State John Kerry said on CNN's State of the Union on Sunday. "At the moment of the shoot-down, we detected a launch from that area. The trajectory went through that plane."
Kerry also appeared on Fox News Sunday, saying he is urging European countries to impose tougher sanctions against Russia. "What we are doing now is trying to bring our European counterparts along," he said.
"I think the world has to rise up and say, 'We've had enough of this,'" Sen. Dianne Feinstein, head of the Intelligence Committee, told CNN. "I think Europe has to come together. I think Germany in particular has to lead. I think we have to continue with sanctions."
EU foreign ministers are scheduled to meet Tuesday to discuss further sanctions on Russia.
British Prime Minister David Cameron has said Russia's "destabilization" of eastern Ukraine has contributed to the "appalling tragedy" of the Malaysian flight, according to SKY News.
"If Vladimir Putin does not change his approach to Ukraine then Europe and the West must fundamentally change our approach to Russia," British Prime Minister David Cameron wrote in an op-ed in the Sunday Times. "This is not about military action, plainly. But it is time to make our power, influence and resources count."
Russian President Vladimir Putin, who now also appears to be concerned, has called for an international investigation of the crash site.
"Russia will do everything possible to shift the current conflict in the east of Ukraine from today's current military stage to the state of discussion at the negotiation table," Putin wrote in a Kremlin-website posting.