Obama won't be happy! "It would harm everybody, the Europeans and the Russians," warned Olli Rehn, the European Commissioner for Economic Affairs, adding that "any 'sensible' European Union citizen should oppose further sanctions on Russia because of the economic cost for Europe." As Merkel and Obama cozy'd up for discussions this morning, we can only imagine the promises being made if only she will support his crusade (which she clearly was unwilling to judging from the press conference). Perhaps she should check in with her nation's CEOs (who have vociferously demanded no more sanctions) and, as Rehn acknowledges, the slowing Russian economy is already having a “negative impact” on Finland and Austria, and "that economic fallout probably will spread to Germany, Poland and the Baltic countries."

As Bloomberg reports, Europe should shun Russia sanctions on economic cost, according to Olli Rehn...

Any “sensible” European Union citizen should oppose further sanctions on Russia because of the economic cost for Europe, EU Commissioner Olli Rehn said. “It would harm everybody, the Europeans and the Russians,” Rehn, the European Commissioner for Economic Affairs, said in an interview in Vienna today. Yet “it can only be avoided if Russia is committed to avoiding aggravation and escalation of this crisis,” he said. As EU governments weigh economic sanctions on Russia for failing to stop separatists in Ukraine, the slowing Russian economy is already having a “negative impact” on Finland and Austria, Rehn said. That economic fallout probably will spread to Germany, Poland and the Baltic countries, he said. Ukraine’s conflict escalated as the army sent armored vehicles and artillery today in a bid to retake the eastern town Slovyansk, a stronghold of pro-Russian separatists. Russian President Vladimir Putin had demanded Ukraine pull back troops as his forces remain massed across the border. Everybody should try to reduce tension in eastern Ukraine and thus try to prevent an escalation of this regional crisis into a European-wide crisis,” said Rehn, who is on leave from his EU post while running for a seat in European Parliament elections starting May 22.

And there it is... with Ukraine now operating its anti-terrorist campaign, any Putin reaction will leave the West useless as Europe is broadly and loudly against further sanctions... pitting the US against the rest.

Merkel confirmed that economic sanctions are unlikely before May 25th elections.