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Russia, Ukraine pull apart

Crimea annexation celebrated as deal with E.U. is inked

People watch fireworks at the central Lenin square in Simferopol, Crimea, on Friday, March 21, 2014.  Russian President Vladimir Putin completed the annexation of Crimea on Friday, signing a law making the Black Sea peninsula part of Russia.(AP Photo/Ivan Sekretarev)

People watch fireworks at the central Lenin square in Simferopol, Crimea, on Friday, March 21, 2014. Russian President Vladimir Putin completed the annexation of Crimea on Friday, signing a law making the Black Sea peninsula part of Russia.(AP Photo/Ivan Sekretarev)

Deep-booming fireworks rent the sky in Moscow and in Crimea last night to celebrate the territorial expansion of Russia at Ukraine’s expense.

Russian President Vladimir Putin, defiant in the face of Western pressure, signed a treaty of accession moments after it was ratified by the upper house of parliament earlier in the day. The deal gives the Crimean peninsula to Russia – but it has pushed a diminished Ukraine further toward the West.

In Brussels, Ukraine’s leaders signed an agreement committing to closer ties with the European Union and said they had been promised more than $1 billion in additional economic aid. Russia, meanwhile, is now the target of expanded sanctions.

The E.U., following on the heels of the United States, added a dozen more names yesterday to its list of Russian officials subject to visa and financial restrictions. But efforts by eastern members of the E.U. to pursue much tougher measures were rebuffed by leaders of bigger countries worried about the consequences for their own economies.

In Moscow, politicians joked about the sanctions. But the measures were beginning to show some bite, and several hundred thousand Russians could be feeling their effect.

Mastercard and Visa stopped handling transactions for Bank Rossiya, which was placed on the American sanctions list Thursday by President Obama, and for the much smaller SMP Bank, which is owned by two brothers, Arkady and Boris Rotenberg, who are also on the U.S. list. They are old friends of Putin and have grown rich since he came to power. Several other small banks that rely on the two bigger ones to handle credit card transactions also had their credit card business blocked.

“It will not have a huge effect,” said Anton Soroko, a bank analyst. Bank Rossiya, the country’s 15th largest bank, has about 470,000 individual clients, most of whom have direct deposit for their salaries and use their cards only to withdraw cash from ATMs – a procedure that is still possible, according to Natalia Romanova, editor of a website called banki.ru.

It remains unusual, she said, for Russians to use credit cards for point-of-sale purchases or to buy online.

Yet the news of the suspended transactions caught people’s attention. Putin said he would open an account in Bank Rossiya on Monday and have his salary deposited there.

At a meeting of Russia’s national security council, he joked about not associating too closely with some of his aides who are on the American and E.U. lists. He said Russia, for now, should not retaliate any further, beyond the entry bans for nine American officials it announced Thursday.

But later in the afternoon, the talk grew more menacing.

Russia will not let further sanctions go unanswered, said Putin’s spokesman, Dmitry Peskov.

“We will react every time, and we react based on mutuality. We have responded to the first sanctions, and now we will respond” to further sanctions, he said.

The foreign ministry promised a stiff response to the United States.

“The U.S. administration decision announced on March 20 to expand the list of sanctions against Russian officials, parliamentarians and businessmen as a punishment for Crimea’s reunification with Russia causes disappointment and regret,” said a statement attributed to Alexander Lukashevich, the ministry’s press secretary.

“We are certain to respond toughly as already happened on more than one occasion earlier with respect to earlier sanctions.”

Alexei Pushkov, head of the foreign affairs committee of the Duma, or lower house of parliament, tweeted Friday: “Economic sanctions make sense when their goal is to prevent something. The reunification with Crimea is already a fact. There’s nothing they can prevent. What’s the point?”

Ukraine’s leaders, stung by the loss of Crimea and facing dire problems at home, hope to capitalize on Western support. The interim prime minister, Arseniy Yatsenyuk, signed an agreement at the Brussels E.U. summit that could pave the way for broader cooperation.

It came four months to the day after the ousted president of Ukraine, Viktor Yanukovych, spurned a deal with the E.U. in favor of Russia, provoking the long-lasting protest that eventually brought him down.

Ukraine is still a significant way from formally joining the 28-nation bloc, and such a move would likely draw a furious response from Moscow. But Yatsenyuk said he believed Friday’s signing of a political association agreement marked a major push in that direction.

“We want to be a part of the big European family, and this is the first tremendous step in order to achieve for Ukraine its ultimate goal, as a full-fledged member,” he said.

The signing of the deal with Ukraine overshadowed, for a day, Europe’s continuing struggles over how to penalize Moscow for its annexation of Crimea.

Some members, particularly those in Eastern Europe, have pushed for tough sanctions, fearing that without a stern response from the West, Russia will be emboldened to reach for more territory. But other European nations, including E.U. heavyweights like Germany, have deep economic ties with Russia and are reluctant to push too hard. About a third of Europe’s gas comes from Russian sources.

Without unanimous support for broad financial sanctions, the E.U. focused on more modest steps.

On Friday it announced the names of 12 individuals to add to its sanctions list, which began with 21 names earlier in the week. The new names appeared to be part of an effort to coordinate strategy with the United States and included several Putin aides and officials who have already been sanctioned by Washington. Among them were Dmitry Rogozin, a deputy prime minister.

The list also included Dmitry Kiselyov, a Russian news anchor who was recently named to head the Kremlin’s new information agency, Russia Today. Kiselyov responded to American criticism of the Crimean referendum on Sunday by warning that Russia was capable of turning the United States into “radioactive ashes.”

Notably, Europe did not go after Russian oligarchs or banks, as the United States did on Thursday. But European leaders said they have prepared additional penalties that would be triggered if Putin makes a play for other parts of Ukraine.

“If there’s further destabilization in Ukraine, then there should be further, wide-ranging measures taken,” said British Prime Minister David Cameron, who did not give specifics.

Cameron said the best rebuke to Russia would be a strong Ukraine, a sentiment that other European leaders echoed. The E.U. on Friday also sought to bolster other potentially vulnerable nations in Russia’s shadow, signaling that the bloc would sign deals to tighten its relations with both Georgia and Moldova.

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Witte reported from London. Washington Post staff writer Kathy Lally contributed to this report from Kiev, Ukraine.

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