MOSCOW: A defiant Russia dismissed Wednesday unprecedented Western sanctions over Ukraine after Brussels and Washington unveiled the toughest punitive measures against the Kremlin since the Cold War.

The third round of US and EU sanctions aims to force Russia to change tack and halt its support of separatists in Ukraine by targeting its vital financial, arms and energy sectors.

But Russia’s first Deputy Prime Minister, Igor Shuvalov, made light of the restrictions, also designed to hit the oligarchs in Russian President Vladimir Putin’s inner circle.

“And what about the sanctions? In for a penny, in for a pound,” he quipped to journalists.

Financial institutions put on a brave face, saying their operations would not be affected, while a top official unleashed a diatribe against the administration of US President Barack Obama.

“Obama will go down in history not as a peacemaker — everyone has already forgotten about his Nobel Peace Prize — but as a US president who started a new Cold War,” Alexei Pushkov, chairman of the foreign affairs committee at the Russian parliament’s lower house, said on Twitter.

Russia warned Wednesday that a new round of Western sanctions will have “rather tangible” consequences for the United States, accusing Washington of seeking to punish Moscow for its assertive policies.

“Real losses from such destructive and short-sighted policy will be rather tangible for Washington,” which the Russian foreign ministry said in a statement appears to be “pursuing a sole goal — to settle the score with us over independent policies that Washington finds inconvenient.”

Russia’s Central Bank said that financial institutions were working normally and that if necessary it would adopt measures to protect targeted lenders, which include the country’s second-largest bank VTB.

Economists have warned that Europe’s own economy would suffer too from the so-called sector sanctions against its biggest source of energy and its major trading partner.

Despite the dismissive talk in Moscow, a number of economists acknowledged the new restrictions would be painful to absorb for Russia, and could stoke social tensions as its economy is sliding toward a recession.

“The current amount of corporate debt is 700 billion dollars, these debts should be refinanced,” Igor Nikolayev, head of the FBK Strategic Analysis Institute, told AFP, pointing to a lack of cheap loans in Russia.

Nikolai Petrov of the Moscow-based Higher School of Economics said that this time the sanctions would be felt by everyday Russians — and predicted they would drive an even greater wedge between him and the West.

“The confrontation will increase abruptly. Putin has been practically driven into a corner and this man does not make concessions under pressure,” he told AFP.