The US and the EU joined forces this week to hammer out the harshest sanctions against Russia since the Cold War. So far, the EU has merely targeted a few individuals. Now it is set to take action against Russian banks, the oil (but not gas) industry and the military.
There has been a clampdown on future arms sales, while major state-owned banks will not be able to tap European capital markets, and high-tech oil exports are no longer available to the Russian oil sector.
The US has matched many of the European measures and has now placed restrictions on almost all the biggest banks with state ownership of at least 50%. Russia has already started to retaliate, banning Polish fruit and vegetables.
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Companies are beginning to fret about the impact of sanctions and counter-sanctions, with BP saying they would threaten its joint venture with oil giant Rosneft and Renault warning its sales could slump.
What the commentators said
Instead, he has destabilised his neighbour and continues to stoke the violence in eastern Ukraine, accompanies by a "propaganda operation worthy of a previous era in Soviet history".
We could be in for a long stand-off, as Wirtschaftswoche pointed out. The worry is that Putin sees his mission as restoring Russia's self-esteem, which was gravely damaged by the collapse of the Soviet Union, and if that means a nasty squeeze on the economy, so be it. But his Ukraine campaign has also boxed him into a corner.
Having hyped up the populace with relentless propaganda, any climb-down or concession, no matter how small, would be perceived as a major defeat. So we are likely to see plenty more firms lining up to warn that their business is going to suffer.
In BP's case, though, the fuss seems overblown, said Allister Heath in The Daily Telegraph. BP ended up paying £15bn for its stake in Rosneft last year, and has already pocketed almost £1bn in dividends. That follows its $8bn investment in a previous joint venture, which yielded $15bn in dividends.
Even if all its Russian assets are confiscated, which is highly unlikely, it will have done well in Russia. In the US, by contrast, its provisions for the 2010 spill have hit $43bn. "Investors are worrying about the wrong continent."
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