CBS News – Secretary of State John Kerry flew to Kiev Tuesday to show U.S. support for the fledgling Ukraine government, and the Obama administration announced with his arrival a $1 billion energy subsidy package. The fast-moving developments came as the United States readied economic sanctions amid worries that Moscow was ready to stretch its military reach further into the mainland of the former Soviet republic.
Kerry arrived as the Ukraine government grapples with a Russian military takeover of Crimea, a strategic, mostly pro-Russian region in the country’s southeast, and as Russian President Vladimir Putin said he wouldn’t be deterredby economic sanctions imposed punitively by the West.
While on the ground, Kerry was planning to pay homage to the dozens of protesters who were slain Feb. 20 in anti-government demonstrations which culminated days later in the ouster of President Viktor Yanukovych.
Chief White House correspondent Major Garrett reports that with military options largely off the table, the key player for the administration in this is Treasury Secretary Jack Lew. He is putting together for the president a proposed set of economic sanctions and looking at ways to make life very tough for state-owned banks in Russia by blocking access to global financial markets.
Garrett reports that Russia lost $60 billion in wealth on Monday due to market volatility related to all the instability in Crimea and larger Ukraine. The ruble has fallen more than 10 percent amid all this tension and the White House hopes all this economic damage will provoke Putin to reconsider. Even so, Western nations led by Germany are reluctant to hit Russia, at least right now, with tough economic sanctions.
As Kerry arrived, the White House announced the package of energy aid, along with training for financial and election institutions and anti-corruption efforts. U.S. officials traveling with Kerry, speaking on grounds of anonymity, said the Obama administration is considering slapping Russia with unspecified economic sanctions as soon as this week.
Additionally, the officials said, the U.S. has suspended what was described as a narrow set of discussions with Russia over a bilateral trade investment treaty. It is also going to provide technical advice to the Ukraine government about its trade rights with Russia. The officials spoke on condition of anonymity because they were not authorized to be quoted by name before the official announcement was made.
Putin pulled his forces back from the Ukrainian border on Tuesday, yet said that Moscow reserves the right to use all means to protect Russians in the country. He accused the West of encouraging an “unconstitutional coup” in Ukraine and driving it onto anarchy, declaring that any sanctions the West places on Russia will backfire.
Speaking from his residence outside Moscow, Putin said he still considers Yanukovych to be Ukraine’s leader and hopes Russia won’t need to use force in predominantly Russian-speaking eastern Ukraine.
In Washington Tuesday morning, the White House said the $1 billion loan guarantee was aimed in particular at helping insulate Ukraine from reductions in energy subsidies. Russia provides a substantial portion of Ukraine’s natural gas and U.S. officials said they were also prepared to work with officials in Kiev to reduce their dependence on those imports. The White House said the assistance was meant to supplement a broader aid package from the International Monetary Fund, which currently has officials in Ukraine working with that country’s new government.
On Monday, the Pentagon announced it was suspending military-to-military engagements between the United States and Russia, including exercises, bilateral meetings, port visits and conferences.
The 28-nation European Union on Monday threatened to halt long-running talks on visa liberalization and negotiations on further economic cooperation as a first step unless Russian troops on the Crimean peninsula retreat to their barracks by Thursday.
“There’s no reset with Vladimir Putin,” Sen. John McCain, R-Ariz., said Tuesday on MSNBC. McCain, who lost to Obama in the 2008 presidential election, said the president must “recognize that Vladimir Putin does not want a democracy on his borders. That would be a very bad example from his point of view to be set for the Russian people.”
Conservative critics of the administration have been citing the highly publicized Obama “reset” with Moscow since it was touted in 2009 by then-Secretary of State Hillary Rodham Clinton in a visit with her Russian counterpart, Sergey Lavrov, in Moscow.
Some Republicans in Congress were considering a possible package of “debilitating economic sanctions” to get Putin’s attention. House Foreign Affairs Committee Chairman Ed Royce said that the U.S. and Europe should act collectively to threaten the Russian stock market, economy and ruble if Russia doesn’t withdraw from Crimea.
“We can’t just keep talking,” Royce said Monday. “We need to do something.”
The U.S. officials traveling to Kiev said Washington is warily watching to see whether Russia will try to advance beyond Crimea.
They cited reports of Russian helicopters nearly flying into mainland Ukraine airspace before being intercepted by jets controlled by Kiev. The officials said it’s believed that as many as 16,000 Russian troops have deployed to Crimea, while Ukrainian forces amassed on both sides of an isthmus that separates the region’s peninsula from the mainland.
The officials also said there is no support currently within the Obama administration to eventually let Russia annex Crimea – a possibility that has been raised quietly amid questions about U.S. interests in the pro-Russian region. They said it is up to the Ukraine government to decide whether a referendum should be held to let the Crimean people decide their own fate.
Speaking Monday at a U.N. session in Geneva, Lavrov attempted to deflect blame back on the West. He defended the deployment of Russian troops in Ukraine as a necessary protection for his country’s citizens living there.
“Those who are trying to interpret the situation as a sort of aggression and threatening us with sanctions and boycotts, these are the same partners who have been consistently and vigorously encouraging the political powers close to them to declare ultimatums and renounce dialogue,” Lavrov said.
“This is a question of defending our citizens and compatriots, ensuring human rights, especially the right to life,” he said.
President Barack Obama on Monday described the Russian advance as a violation of international law. He called on Congress to approve an aid package for the new Ukrainian government and repeated earlier threats that the U.S. will take steps to hobble Russia’s economy and isolate it diplomatically if Putin does not back down.
“The strong condemnation that has proceeded from countries around the world indicates the degree to which Russia is on the wrong side of history,” Obama said.
