EU sanctions target 70 per cent of Russian banking market

President Vladimir Putin "must and will fail," top European Union leaders said on Friday as they agreed new sanctions over his invasion of Ukraine, saying he was trying to bring the continent back to the age of empires and confrontations.

Russia launched its invasion by land, air and sea on Thursday following a declaration of war by Putin. An estimated 100,000 people fled as explosions and gunfire rocked major cities. Dozens have been reported killed.

The bloc's leaders agreed in principle at an emergency overnight summit to impose new economic sanctions, joining the United States and others in taking steps such as curbing Russia's access to technologies.

The EU will freeze Russian assets in the bloc and halt its banks' access to European financial markets as part of what EU foreign policy chief Josep Borrell described as "the harshest package of sanctions we have ever implemented". read more

"This package includes financial sanctions, targeting 70 per cent of the Russian banking market and key state owned companies, including in defence," EU Commission chief Ursula von der Leyen said on Twitter.

She told a news conference that the sanctions, which also limit Russia's access to financial markets, would increase Russia's borrowing costs and raise inflation there.

Von der Leyen also said that export curbs to Russia would hurt its oil sector by stopping access to material it needs from the EU for its oil refineries. That will, over time, trigger a depletion in Russia's oil refining revenues, she said.