THE HAGUE (Reuters) - Russia has the most to lose from the conflict over Crimea, the Dutch prime minister said on the eve of high-level meetings in the Netherlands to be attended by U.S. President Barack Obama.
A meeting of the G7 group of industrialised nations was hastily bolted on to a long-planned Nuclear Security Summit last week to give leaders a chance to discuss a response to Russia's annexation of Crimea.
The Netherlands is not a member of the G7, but has agreed to host Monday's talks, where Obama and his Secretary of State John Kerry will meet Russian Foreign Minister Sergei Lavrov for bilateral talks in The Hague.
"Russia has an economy that is highly focused on oil and gas," Mark Rutte told Reuters in an interview on Sunday.
"It is not diversified. The growth rate has come down considerably in the last few years. If it came to putting in place sanctions, that would hurt Russia considerably."
Rutte's view contrasts sharply with the opinion of many business leaders, who are wary of taking a hard stance against the supplier of roughly a third of the EU's natural gas.
Last week, Germany's main trade body warned that full-blown sanctions would be a "real catastrophe" for many German companies.
European Union leaders, including Chancellor Angela Merkel who played a leading role in the frustrated attempt to persuade Russian President Vladimir Putin not to annex the Crimean peninsula, have agreed travel bans and asset freezes on 33 people close to Putin and are preparing economic sanctions.
Washington also imposed visa bans and asset freezes on some of Putin's inner circle, and leaders gathered in The Hague are expected to discuss whether to impose broader measures.
They have threatened broader economic sanctions if Putin's forces move in on other parts of Ukraine with big Russian-speaking populations.
The G7 will be meeting without Russia, which was invited to join the group in 1998 in what was then a sign of improving relations between Russia and the West after decades of Cold War.
Rutte said that the tensions over Crimea would not deflect the summit's focus away from its original purpose of agreeing a stricter regime for monitoring nuclear materials used in power generation and medicine.
"Russia, the U.S., and all the other participants find the issue of nuclear security so important ... that they don't want to let current events interfere with coming up with a strong communiqué," he said.
Representatives from 53 countries will be attending the summit, including Chinese President Xi Jinping and the leaders of Germany, Japan, Britain, Canada and France.