By Matthew Karnitschnig in Berlin, Selina Williams in London and William Mauldin in Washington
Updated March 4, 2014 11:10 p.m. ET
Threats by the U.S. and European powers to impose tough sanctions on Russia over its incursion into Ukraine have run into a difficult economic reality: The West has as much at stake as Moscow.
While sanctions were central to international efforts to exert pressure on countries such as Iran and Myanmar in recent years, Russia’s sheer size and economic entanglement with the West make it much harder to isolate.
Russian President Vladimir Putin seized the point at a news conference on Tuesday in Moscow, warning that all sides would suffer if sanctions were imposed.
“Those who are thinking of imposing the sanctions should be the ones first of all to think about their consequences,” he said. “I think in the modern world, when everything is so interconnected and everyone depends on everyone else in one way or another, it’s of course possible to do some damage to one another, but it will be mutual damage.”
President Barack Obama and other Western leaders have warned Russia of severe consequences if it doesn’t reverse course in Ukraine.
Yet Russia has become so deeply embedded into the European economy since the Soviet Union’s collapse that any move to substantially curtail its commercial and economic ties with the West would risk major economic damage to both sides across a range of sectors—from energy to transportation and finance.