US President Barack Obama and the European Union announced a new round of economic sanctions against Russia, targeting its energy, banking and defense sectors in the strongest international action yet over Moscow’s support for rebels in eastern Ukraine.

“If Russia continues on this current path, the costs on Russia will continue to grow,” Mr. Obama said.  “Russia’s actions in Ukraine and the sanctions that we've already imposed have made a weak Russian economy even weaker.”

This is clearly the biggest confrontation between East and West since the end of the Cold War.

The European Union is imposing restrictions on the trade of equipment for the oil and defense sectors, as well as “dual use” technologies with both defense and civilian purposes.  Russia’s state run banks are now barred from raising funds in European capital markets.  These measures would be reviewed in three months.

Europe had earlier imposed weaker sanctions only on certain individuals and organizations accused of direct involvement in threatening Ukraine.  But Russian president Vladimir Putin has not backed down, even after international condemnation of the downing of Malaysian Airlines Flight MH17, which Australia, the US, and western intelligence sources say was caused by a Russian-supplied missile fired by Russian-backed Ukrainian rebels.  Moscow denies this.