Ukraine seeks 'ruinous' sanctions on Russia as Europe frets about energy

People wait to be evacuated from the heavily shelled town of Derhachi outside Kharkiv, as Russia's attack on Ukraine continues

Ukraine wants sanctions crippling enough to force Russia to end its war after accusing some countries of putting economic wellbeing above punishment for civilian killings that the West condemns as war crimes.

The democratic world must stop buying Russian oil and completely block Russian banks from the international finance system, President Volodymyr Zelenskiy said in his daily video address early on Thursday.

"Some politicians are still unable to decide how to limit the flow of petrodollars and oil euros to Russia so as not to put their own economies at risk," Zelenskiy said.

Washington announced new measures including sanctions on President Vladimir Putin's two adult daughters and a major bank. However, the European Union failed to approve a new round of sanctions including on Russian coal on Wednesday. Top EU diplomat Josep Borrell said the package could be passed on Thursday or Friday.

Speaking at a NATO meeting, Borrell also said the EU will discuss an embargo on Russian oil, which he said he hoped would come soon.

After grisly images of dead civilians in the streets of Bucha, a town northeast of Kyiv recaptured from Russian invaders, sparked international condemnation, Zelenskiy said Kremlin forces were trying to cover up evidence of atrocities.

"We have information that the Russian military has changed its tactics and is trying to remove people who have been killed from streets and basements ... this is just an attempt to hide the evidence and nothing more," Zelenskiy said, but did not provide evidence.

Moscow has denied targeting civilians and says images of bodies in Bucha were staged to justify more sanctions against Moscow and derail peace talks.

Russia's six-week-long invasion has forced over 4 million to flee abroad, killed or injured thousands, left a quarter of the population homeless, turned cities into rubble and set off Western restrictions targeting Russian elites and the economy.

Washington's new steps on Wednesday included sanctions top state-run lender Sberbank (SBER.MM) and Alfa Bank, Russia's fourth-largest financial institution.

It also banned Americans from investing in Russia and called for Russia to be expelled from the Group of 20 major economies forum, saying it will boycott G20 meetings where Russian officials will show up.

An EU source said the European coal ban would be approved on Thursday but would not take effect until August, a month later than previously proposed after pressure from Germany, EU's top importer of Russian coal.

Britain also froze Sberbank's assets, and said it would ban imports of Russian coal, but not until the end of the year.

The United Nations General Assembly will vote on Thursday on suspending Russia from the U.N. Human Rights Council.

CALL FOR MORE ACTION

But Ukraine says its allies must go further to stop Moscow's war machine by ending all energy imports from Russia and blocking supplies of technology and materials used for weapons production.

"Sanctions against Russia must be ruinous enough for us to end this terrible war," the head of Ukraine's presidential office Andriy Yermak said late on Wednesday.

Ukraine's foreign minister called NATO allies to send more planes, air defence systems, missiles and military vehicles.

"I think the deal that Ukraine is offering is fair. You give us weapons, we sacrifice our lives, and the war is contained in Ukraine," Dmytro Kuleba told reporters at the NATO meeting.

Breaking ranks with the rest of the EU, Hungary said it was prepared to meet a Russian demand to pay roubles for its gas, in what Ukraine described as an "unfriendly act."

The rift highlights the continent's reliance on Russian gas and oil that has held it back from a tougher response on the Kremlin as Russia accounts for some 40% of the EU's natural gas consumption and a third of its oil imports.

BESIEGED CITY

Western policymakers have denounced the killings in Bucha as war crimes, and Ukrainian officials say a mass grave by a church there contained between 150 and 300 bodies.

Russia says it is engaged in a "special military operation" designed to demilitarise and "denazify" Ukraine, which Kiyiv and its Western allies reject that as a false pretext for its invasion.

Russia continues to prepare for an attack to gain full control over the eastern breakaway regions of Donetsk and Luhansk as well as the besieged southern port of Mariupol, where tens of thousands are trapped, according to the general staff of the Ukrainian armed forces.

Many in the eastern town of Derhachi, just north of Ukraine's second-largest city Kharkiv and near the border with Russia, have decided to leave while they can.

Buildings have been badly damaged by Russian artillery. Kharkiv itself has been hammered by air and rocket strikes from the start.

Mykola, a father of two in Derhachi who declined to give his surname, said he could hear the thud of bombardments every night, and had been hunkering down with his family in the corridor of their home.

"(We'll go) wherever there are no explosions, where the children won't have to hear them," he said, hugging his young son and struggling to hold back the tears.

The Ukrainian prosecutor general's office said 167 children have so far been killed in the war, with 297 wounded.

Source: Reuters