"When you start to get at the cronies, the individuals who control a large part of the Russian economy, you are imposing a larger economic impact than sanctioning an individual," he said.
However, it remains to be seen just how biting they will be. Europe's appetite for applying sanctions has been limited by fears that the Kremlin could take revenge measures, such as hiking European gas prices.
Speaking on Friday, the German chancellor, Angela Merkel, said that any extra European measures would likely fall within the scope of "second stage" sanctions, which are much less punitive than the "third stage" sanctions that would target key sectors of the Russian economy. In effect, many of the new measures could simply mean adding further names of Russian officials to an existing list who face visa and asset bans.
The G7 announcement follows a round of high-level telephone conference calls on Friday led by Mr Obama, who is touring Asia. The new sanctions are intended to punish Russia for failing to comply with an international agreement to help defuse the Ukraine crisis, a statement from the G7 leaders released by the White House said.
"Given the urgency of securing the opportunity for a successful and peaceful democratic vote next month in Ukraine's presidential elections, we have committed to act urgently to intensify targeted sanctions and measures to increase the costs of Russia's actions," the statement said.
The G7 statement pointedly praised the "restraint" with which the new pro-Western government in Kiev had acted in dealing with the pro-Russian gunmen who have seized official buildings in the east.
By contrast, Western diplomats have said that Moscow has made no effort to use its influence over the gunmen to persuade them to act in a peaceful manner, despite having pledged to do when it signed last week's Geneva peace accord.
The G7 leaders told Russia that "the door remains open to a diplomatic resolution of this crisis" on the basis of the Geneva accord.
But they also warned that "we continue to prepare to move to broader, coordinated sanctions, including sectoral measures, should circumstances warrant."
Sectoral sanctions refer to broader punitive action targeting specific parts of the Russian economy, such as the defence or energy industries. They are not expected to be among the measures announced on Monday. But Mr Rhodes said they would be imposed were Russian troops currently massed on the border of Ukraine to start mounting an invasion.
The US has singled Germany and Italy as being reluctant to impose new round of sanctions on Russia. Germany is particularly vulnerable to Russian retaliation as it imports around 50 per cent of its gas supplies from Russia.
Britain likewise has limited enthusiasm for further measures because of the extent of Russian investment in the City of London.
A senior US official said that the G7 measures by each country need not be identical. "Each country will determine which targeted sanctions they will impose," the official said.
That was interpreted a tacit recognition of the unwillingness of some European nations to take too hard a line with Moscow, a stance that has privately frustrated Washington.
Source: Top Stories - Google News - http://ift.tt/1rsIteE
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