The Telegraph
Thursday , August 7 , 2014
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Putin orders food import curbs
- Sanctions will hurt us, says Finland

Putin in Moscow. (AFP)

Espoo (Finland) /Moscow, Aug. 6 (Reuters): Finland warned today that Russian retaliation against EU sanctions could push its economy into crisis, while President Vladimir Putin ordered curbs on food imports from countries that join the western action over Ukraine.

Despite the deepening crisis, Putin held back from imposing any broad ban or restrictions that might cause food shortages or risk stoking inflation.

East-West relations, already at their worst since the Cold War, soured yet further today as Nato said Russia might use the pretext of a humanitarian mission to invade eastern Ukraine.

Although rhetoric levels are rising, Putin’s response to EU sanctions targeting Russia’s banking, energy and defence industry remains relatively muted. Today, he signed a decree banning or limiting imports of agricultural products from countries that have imposed the sanctions.

Putin ordered his government to come up with a list of goods to be banned for one year, the Kremlin said. However, with the central bank warning that import restrictions could push up food prices and general inflation, Putin said the list should not hurt Russian consumers.

Nevertheless, the prospect of tit-for-tat economic restrictions has raised concern among smaller EU nations that have close trading ties to Russia. Finland said it feared a repeat of the turmoil suffered by most western economies in 2008-09.

“This has the potential — and I stress potential — to become Economic Crisis 2.0,” Prime Minister Alexander Stubb said in the Finnish city of Espoo. Neutral Finland traded heavily with its huge neighbour even during the Cold War, and suffered badly when the Soviet Union collapsed. Today, Russia is Finland’s third largest export market.