Ukraine finance minister calls for ‘severe’ sanctions

Western governments must “step up sanctions on Russia” with timing being crucial in Ukraine.

That is the message from Finance Minister Serhiy Marchenko, who spoke to the BBC on Friday from an undisclosed location in the country.

“I don’t think that’s enough,” he said of the current sanctions, adding that this week he asked G7 leaders to introduce more restrictive sanctions.

“For us it’s not just words, time is very important.”

He also described Ukraine’s Zaporizhia nuclear power plant as a “crucial and very important object in our country” after some of its buildings were shelled by Russian forces.

Russia has attacked and taken control of Europe’s largest nuclear power plant, but international observers say no radioactive material was released during the attack and the plant is safe.

During the interview, Mr. Marchenko also urged investors to divest themselves of Russian assets. He said index operators should also remove Russian assets from their benchmarks.

They play a significant role in the markets because “passive” funds with trillions of dollars in assets track the benchmarks they create, while active managers use them as a basis when constructing portfolios.

MSCI, a US financial firm, announced this week that it was removing Russia from its closely watched emerging market indices after noting that the country’s stock market had become “uninvestable” due to Western sanctions.

However, Russia is still a member of JPMorgan’s influential emerging market bond indices.

Financial support from the international community is also a focus for the finance minister, who said the European Union had agreed a $1.3 billion (£983 million) deal with Ukraine.

Ukraine also tapped the bond market for support earlier this week, rallying buyers of so-called war bonds.

Mr Marchenko said the first auction raised $277 million, which will be used to support the military in its fight against Russia. A second offering will go on sale next Tuesday.