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Sanctions and IMF put Russian economy in the dock

9:57am EDT - 02:22

One week on from the MH17 disaster, EU leaders are reported to have reached preliminary agreement on harder sanctions against Russia, 'though details are yet to be worked out. Ciara Sutton reports.

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TV AND WEB RESTRICTIONS~****~ It's been just over a week since the Malaysian Airlines MH17 was shot out of the sky over eastern Ukraine. Nearly three hundred lives lost. Governments around the world were quick to blame and demand an end to the crisis in Ukraine. How best to do this led to cracks within the EU and accusations of self-interest and hypocrisy. But is Europe, under pressure from the U.S., making progress? A leaked report out of Brussels reveals it may target state-owned Russian banks vital to financing Moscow's faltering economy. More individuals will reportedly be added to the asset freeze list. Wider sanctions could also be announced next week. In the meantime, the IMF has cut its growth forecast by over a percent. Mike Ingram from BGC Partners. SOUNDBITE (English) BGC PARTNERS, MARKET COMMENTATOR, MIKE INGRAM, SAYING: "Russia had to cancel a bond auction earlier on this week because they basically couldn't find any investors at a price which they thought was reasonable. So markets are inflicting real pain on markets and on the Russian real economy. And look at the IMF forecast: 0.2% growth from Russia they are forecasting this year. It's a fair bet when the numbers finally come in for 2014 they're going to be in recession." After months of hesitation over the impact sanctions might have on Europe, EU states including Germany, Moscow's biggest trade partner, are pushing for quick action. They believe Russia has failed to meet demands to end violence in Ukraine. As for Europe itself, Standard Chartered's Sarah Hewin says it's relatively insulated. SOUNDBITE (English) SARAH HEWIN, REGIONAL HEAD OF RESEARCH AT STANDARD CHARTERED, SAYING: "They've really avoided so far taking that step towards phase three sanctions, those measures which would affect all sectors for example - defense, energy, finance. As long as we don't see those sorts of sanctions being imposed, then the view seems to be that the impact is going to be constrained just to Russia." It's not just Russia feeling the strain. Ukrainian politics has again been thrown into turmoil after the Prime Minister said he would quit. But confusion reigned after parliament announced it's yet to receive Arseny Yatseniuk's resignation letter. And fighting still rages on in eastern Ukraine. Fourteen people reportedly killed in the past 24 hours in the rebel stronghold of Donetsk.

Sanctions and IMF put Russian economy in the dock

9:57am EDT - 02:22

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