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Russian Markets Hit as Putin Tightens Grip on Crimea

Military personnel, believed to be Russian servicemen, walk in formation outside the territory of a Ukrainian military unit in the village of Perevalnoye outside Simferopol

Moscow – Russia took a financial hit over its military intervention in neighboring Ukraine, with its markets and currency plunging on Monday as President Vladimir Putin’s forces tightened their grip on the Russian-speaking Crimea region. The Moscow stock market fell by 10 percent and the central bank spent $10 billion of its reserves to prop up the rouble as investors took fright at escalating tensions with the West over the former Soviet republic.

Ukraine said Russia was building up armoured vehicles on its side of a narrow stretch of water closest to Crimea after Putin declared at the weekend he had the right to invade his neighbor to protect Russian interests and citizens. On the ground in Perevalnoye, half way between the Crimean capital of Simferopol and the Black Sea, hundreds of Russian troops in trucks and armoured vehicles – without national insignia on their uniforms – surrounded two military compounds, confining Ukrainian soldiers as virtual prisoners.

Ukraine called up reservists on Sunday and the United States threatened to isolate Russia economically after Putin’s action provoked what Britain’s foreign minister called “the biggest crisis in Europe in the twenty-first century”. European Union foreign ministers were to hold emergency talks on Ukraine on Monday but diplomats said they would not immediately match U.S. threats of sanctions against Moscow, but would focus on diplomatic efforts to prevent escalation.

The Organisation for Security and Cooperation in Europe (OSCE) said it was trying to convene an international contact group to help defuse the crisis after Germany said Chancellor Angela Merkel had convinced Putin to accept such an initiative. Switzerland, which chairs the pan-European security body, said the contact group would support Ukraine during its transition and coordinate aid and could also discuss sending observers to monitor the rights of national minorities. (Reuters)

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