(CNN) — The United States and European Union announced sanctions including asset freezes and travel bans on officials from Russia and Ukraine after Crimea applied to join Russia on Monday following a controversial weekend referendum.
“We’ll continue to make clear to Russia that further provocations will achieve nothing except to further isolate Russia and diminish its place in the world,” President Barack Obama said. “The international community will continue to stand together to oppose any violations of Ukrainian sovereignty and territorial integrity, and continued Russia military intervention in Ukraine will only deepen Russia’s diplomatic isolation and exact a greater toll on the Russia economy.”
The sanctions came after Crimea’s Moscow-backed leaders declared an overwhelming 96.7% vote in favor of leaving Ukraine and being annexed by Russia in a vote that Western powers said was illegal. Turnout was 83%.
The result did not come as a surprise. But what happens next is far from certain. Diplomatically, Sunday’s referendum has put the United States and Russia on the kind of collision course not seen since the Cold War. Economically, it’s unclear how much such a coupling will cost Russia. And politically, it’s divided Crimeans, some of whom think it will bring better pay and some who see this as a Kremlin land grab.
In Brussels, Belgium, European Union international policy chief Catherine Ashton announced sanctions against 21 people “responsible for actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine.” She called the weekend vote “illegal” and “a clear breach of the Ukrainian Constitution,” and she urged Russia not to follow up by annexing the territory.
“We want to underline very clearly that there is still time to avoid a negative spiral and to reverse current developments,” she said.
Ashton said the names of those sanctioned will be disclosed later Monday. But German Foreign Minister Frank-Walter Steinmeier said those targeted included eight top Crimean officials and 10 people from Russia, including members of parliament, and three military personnel.
The union’s 28 foreign ministers agreed on sanctions earlier Monday, Lithuanian Foreign Affairs Minister Linas Linkevicius wrote in a message on Twitter. More measures would follow in a few days, when EU leaders meet for a summit in Brussels, he said.
Washington said its sanctions targeted Russian officials and lawmakers, as well as Crimea-based separatist leaders, with financial sanctions for undermining “democratic processes and institutions in Ukraine.” Obama’s order freezes any assets in the United States and bans travel for the 11 people named. Among those sanctioned were ousted Ukrainian President Viktor Yanukovych and aides to Russian President Vladimir Putin.
Earlier, lawmakers in Crimea approved a resolution that declared the Black Sea peninsula an independent, sovereign state. They then filed an appeal to join the Russian Federation.
Moscow strongly backed Sunday’s referendum; the majority of the population is ethnic Russian. And Russian lawmakers have said they will welcome Crimea with open arms.
Ukraine recalled its ambassador to Russia for discussions, according to a statement on the Foreign Affairs Ministry website.
What comes next
On Monday, Russia proposed creating an international support group to mediate in the Ukraine crisis. Its Foreign Ministry said in a statement that this group would urge Ukraine to implement portions of a February 21 peace deal and formulate a new constitution that would include Russian as an official language alongside Ukrainian, as well as set out broad powers for the country’s regions.
Crimea is home to 2 million people. Members of the ethnic Ukrainian and Muslim Tatar minorities had said they would boycott the election, held just three weeks after pro-Russian forces took control of the peninsula.
Uncertainties stemming from a possible break from Ukraine have fueled rumors about a looming legal vacuum in the crisis-hit region, causing panic and confusion.
On Monday, Crimean lawmakers approved legislation to make the Russian ruble the official currency in Crimea alongside the Ukrainian hryvnia, according to a statement posted on the Crimean Parliament’s website. The hryvnia remains an official currency until January 1, 2016. The statement did not provide a date for when the ruble would be circulated in the region.
The lawmakers also adopted a resolution stating that on March 30, Crimea will move to Moscow Standard Time.
Crimea’s government will not persecute those who “remain loyal to the Ukrainian state” and will give Ukrainian soldiers the option to serve in the Crimean military or to serve in the Ukrainian army, Crimean government official Vladimir Konstantinov said.
A secession would mean transferring banks, public utilities and public transport from Ukraine to Russia in what would undoubtedly be a costly operation.
Crimea is entirely integrated into Ukraine’s mainland economy and infrastructure: Ninety percent of its water, 80% of its electricity and roughly 65% of its gas comes from the rest of country. It also depends heavily on the Ukrainian mainland to balance its books. About 70% of Crimea’s $1.2 billion budget comes directly from Kiev.
A special tax system may be introduced for Crimea, Russia’s state-run ITAR-Tass news agency reported Monday, citing Russian Finance Minister Sergei Shatalov.
In Moscow, fears of Russia’s possible economic isolation amid the political crisis in Ukraine have worried investors. The Russian ruble was trading at an all-time low, while the Russian stock market fell 24% from its peak this year.
Putin will address a joint session of Parliament on Crimea on Tuesday.
A bad day for relations
Many Crimeans hope the union with Russia will bring better pay and make them citizens of a country capable of asserting itself on the world stage. Others saw the referendum as a land grab by the Kremlin from Ukraine, whose new rulers want to move the country toward the European Union and away from Moscow’s sway.
In Kiev, Prime Minister Arseniy Yatsenyuk threatened dire consequences for the Crimean politicians who had called the vote, threatening to try them in Ukrainian and international courts.
Tension is also running high in parts of the Russian-speaking industrialized east of Ukraine near the border with Russia, with clashes between rival demonstrators.
Thousands of pro-Russian demonstrators rallied beneath a towering statue of Soviet revolutionary Vladimir Lenin in Donetsk’s main square, with chants of “Donetsk is a Russian city” ringing out as the protesters gathered in a show of support for the Crimean referendum and to demand their own.
Russian lawmakers say Parliament will discuss the future of Crimea on Friday.
“All the necessary legislative decisions on the results of the referendum will be taken as soon as possible,” said Sergey Neverov, the deputy speaker of the lower house of parliament in Russia. “The referendum shows that the people of Crimea see their future as a part of Russia.”
Christopher Hill, a former U.S. ambassador to South Korea, Iraq and Poland, described Sunday as a bad day for East-West relations.
“Putin has left our president with no choice. He needs to impose sanctions. I know Putin will come back and impose his own,” he said. “I think the end of this is going to be to cast Russia out into the cold. And the problem is, I don’t think Putin really cares. I think this is where he wants to take Russia.”