Putin urges Europeans to have 'common sense' over sanctions threat

Russian President Vladimir Putin urged the EU on Sept. 1 to show "common sense" and not to engage in mutually destructive sanctions, in his first reaction to the threat of additional punitive measures over Ukraine.

"I hope that common sense will prevail, ... that we will work together normally and that we and our partners will not cause harm by poking at one another," Putin was quoted as saying by Russian news agencies during a visit to the eastern Siberian city of Yakutsk.

The remarks came a day after European Union leaders gave Russia a week to reverse course in Ukraine or face a new round of sanctions.

Fears are growing that the confrontation could engulf the whole continent after Russia allegedly sent troops to back a new offensive by pro-Kremlin rebels in southeastern Ukraine.

Russian officials have said previously that they were preparing countermeasures in case of new Western sanctions, after having last month banned most EU and U.S. food imports.

But Foreign Minister Sergei Lavrov earlier Sept. 1 said that Russia would not "slam the door shut" on Western trade nor exit from the World Trade Organisation.

"We will, above all, proceed from our own interests, defend our economy, defend our social system, defend our businesses..." Lavrov told Moscow university students.

Sanctions threats and reports of Russian tanks being involved in fighting outside of Lugansk sent the ruble to a new record low of 37.4610 in afternoon trading.

It also sank to a five-month low of 49.2347 to the euro. "The Russian FX ... market remains focused on geopolitical risks," said analysts at VTB Capital.        

"Clearly, that kind of environment spoils even the near-term outlook," they added. Russian...