By Yasin Ebrahim
Investing.com -- U.S. President Joe Biden said the U.S. would unleash the first tranche of sanctions on Russia and individuals after President Vladimir Putin moved to carve out a bigger chunk of Eastern Ukraine.
"I'm announcing the first tranche of sanctions to impose costs on Russia and respond to their actions yesterday," Biden said.
Russian President Vladimir Putin confirmed that Russia had recognized the expanded borders of Luhansk and Donetsk after initially indicating that Moscow would recognize only the two separatist-held areas in Eastern Ukraine. This has stoked fears that Putin plans to launch a further invasion of Ukraine.
"We're implementing full blocking sanctions to large Russian financial institutions, VEB, and their military bank," Biden said. These sanctions would cut off Russia's government from Western financing.
"Russia can no longer raise money from the West and cannot trade in its new debt on our markets or European markets ," the president said, adding that individuals in Russia, who benefit from Moscow's actions, would also face sanctions.
"We will also impose sanctions on Russia's elites and their family members [who] share the corrupt gains of the Kremlin policies and have to share in the pain as well," Biden said.
The president also confirmed that the U.S. had cooperated with Germany to ensure the Nord Stream 2 pipeline will not move forward.
If Russia chooses to expand its invasion, the U.S. and its allies are prepared to implement additional sanctions.
"If Russia goes further with this invasion, we stand prepared to go further with sanctions," Biden said, but continued to keep the diplomatic option on the table.
"Russia is the aggression ... nonetheless, there's still time to avert the worst case scenario," Biden added. "The United States and our allies and partners remain open to diplomacy."