The European Union has passed tough sanctions on Russia targeting the country’s banks, energy and defence sectors.

Russia said the measures will inevitably lead to suffering in Europe.

First on the new list: Russian banks where the state owns more than 51 percent of the capital. They will no longer be able to re-finance themselves from the European financial markets.

Also targeted is the defence sector. The EU has embargoed the export of military goods to Russia, including dual use goods that can be used for both military and civilian purposes.

Finally, on what the Russian foreign minister described as “Brussels’ sanctions list,” export of so-called sensitive technologies from the EU to Russia will be banned. This targets the oil sector, particularly drilling equipment.

Europe is heavily dependent on gas from Russia. The embargo does not target gas. This is to preserve the security of the EU’s energy supply.

According to Henning Riecke from the German Society of Foreign Affairs, the sanctions will affect the Russian economy.

“Russia needs Western technologies in order to modernise. This is the case for the arms industry but it is important across all sectors, especially so in the energy sector,” said Riecke.

“And sanctions to withhold deep sea-drilling technology from Russia are being discussed as well. Once this co-operation ceases, it will be a drawback for the Russian economy which can’t easily be compensated,” Riecke added.

The Russian economy is worth around 1,500 billion euros, but it is stagnating.

The IMF says that Russian GDP will progress just 0.2 percent this year, and capital drain has already reached 52 billion euros since January.

The EU itself is expected to take a hit which could be around 0.3 percent of its GDP this year and 0.4 percent in 2015.

German social democrat MP Gernot Erler, said the German economy is already paying a price.

“Since the beginning of the year, we have seen our trade volume with Russia cut by 17 percent. Analysts are expecting a loss of 4 to 6 billion euros in turnover. That is an unimpressive number,” said Erler.

In 2013 the EU exported goods to Russia worth 207 billion euros, and imported 120 billion euros, according to figures from the European Commission.