Russians told to 'prepare for the worst' as US proposes new sanctions

Russian stock prices dropped 1.5 per cent on the back of news

Residents of Vladivostok queue up for free food aid (AFP/Getty)

Moscow has reacted to a proposed new package of United States sanctions with of mix of anger and resignation.

As an influential former minister urged Russians to prepare for the worst, the Kremlin accused the US of “racketeering”.

“We see clear symptoms of emotional Russophobia,” Kremlin spokesperson Dmitry Peskov told journalists. “But behind the emotions … is an entirely pragmatic, assertive trade calculation, and … nothing less than an attempt to engage in dishonest competition.”

The new round of sanctions, proposed in the Defending American Security from Kremlin Aggression Act on Wednesday evening, would target Russia’s security service, sovereign debt, and its financial and energy sectors. The sanctions package is awaiting congressional approval.

According to the bill’s authors, the measures have been proposed in response to two developments: Russian “interference in democratic processes abroad” and its “aggression against Ukraine”, including the seizing of Ukrainian warships in the Kerch strait in November.

On Thursday, the proposed sanctions were met with a predictably angry response by Russian state television and more media-hungry parliamentarians. Perhaps the most memorable response was filed by Frants Klintsevich, the prominent, if excitable, member of the Defence and Security Committee of Russia’s upper house. He described the new sanctions as a “dangerous habit” akin to “smoking a pipe before breakfast, poisoning all those around”.

“The sanctions have nothing to do with the Kerch incident,” he added.

Other influential actors offered a more muted response, and called on Russians to prepare for things to deteriorate further.

Herman Gref, the head of Russia’s largest bank and its former reformist economics minister, said the risks to the country’s already slow-growth economy had increased and was already being factored into the market.

“We need to prepare for the very worst of situations,” Mr Gref said.

Russian stock prices dropped 1.5 per cent on the back of the news.

Dmitry Peskov admitted that the Kremlin saw little hope for a turnaround in bilateral relations.

“Understanding the level of feelings in congress, it would be wrong to hope for an improvement or even some remission of the disease of Russophobia,” he said.

Repeating a sentence heard many times over on Wednesday, the presidential spokesperson warned things would get worse – but insisted Russia would find a way of coping.

“Russia’s economy has long lived under one sanction or another,” he said. “We’ve managed to keep macroeconomic stability, and even provide for growth in some areas.”