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 U.S. President Barack Obama warned Russia it faced costs from the
West unless it changed course in Ukraine, and pledged to "stand with
Ukraine" as he met with the country's new prime minister in
Washington.
"We will never surrender," Ukrainian Prime Minister Arseny Yatseniuk
vowed as he and Obama met in a White House show of support for the
embattled leader.
"Mr. Putin — tear down this wall — the wall of more intimidation and
military aggression," Yatseniuk told reporters in remarks aimed at
Russian President Vladimir Putin and a reference to then-President
Ronald Reagan's challenge to the Soviet Union in a 1987 speech at
the Berlin Wall.
But Obama and Yatseniuk outlined a potential diplomatic opening that
could give Russians a greater voice in the disputed Crimean region,
where a referendum is scheduled for Sunday on whether it should
become part of Russia.
Yatseniuk told a forum in Washington after his White House meeting
that his interim government was ready to have a dialogue and
negotiations with Russia about Moscow's concerns for the rights of
ethnic Russians in Crimea.
Asked what a political solution would look like, Yatseniuk said: "If
it is about Crimea, we as the Ukrainian government are willing to
start a nationwide dialogue (about) how to increase the rights of
(the) autonomous republic of Crimea, starting with taxes and ending
with other aspects like language issues."
The EU sanctions, outlined in a document seen by Reuters, would slap
travel bans and asset freezes on an as-yet-undecided list of people
and firms accused by Brussels of violating the territorial integrity
of Ukraine.
German Chancellor Angela Merkel said the measures would be imposed
on Monday unless diplomatic progress was made.
A Russian stock index dropped 2.6 percent and the central bank was
forced to spend $1.5 billion to prop up the ruble as investors
confronted the prospect that Russia could face unexpectedly serious
consequences for its plans to annex Crimea.
Russian troops have seized control of the Black Sea peninsula, where
separatists have taken over the provincial government and are
preparing for Sunday's referendum, which the West calls illegal.
The measures outlined by the EU are similar to steps already
announced by Washington, but would have far greater impact because
Europe buys most of Russia's oil and gas exports, while the United
States is only a minor trade partner. The EU's 335 billion euros
($465 billion) of trade with Russia in 2012 was worth about 10 times
that of the United States.
The travel bans and asset freezes could cut members of Russia's
elite off from the European cities that provide their second homes
and the European banks that hold their cash.
The fast pace of Russian moves to annex Crimea appears to have
galvanized the leaders of a 28-member bloc whose consensus rules
often slow down its decisions.
Merkel herself had initially expressed reservations about sanctions
but has been frustrated by Moscow's refusal to form a "contact
group" to seek a diplomatic solution over Crimea.
"Almost a week ago, we said that if that wasn't successful within a
few days, we'd have to consider a second stage of sanctions," Merkel
said. "Six days have gone by since then, and we have to recognize,
even though we will continue our efforts to form a contact group,
that we haven't made any progress."
PREPARATIONS
In Crimea, the regional government is led by a Russian separatist
businessman whose party received just 4 percent of the vote in the
last provincial election in 2010 but who took power on February 27
after gunmen seized the assembly building.
Two days later, Putin announced that Russia had the right to invade
Ukraine to protect Russian citizens.
Preparations for Sunday's referendum are in full swing. Banners hang
in the center of Crimea's capital, reading: "Spring — Crimea — Russia!" and "Referendum — Crimea with Russia!"
A senior Russian lawmaker on Wednesday strongly suggested that
Moscow had sent troops to Crimea to protect against any "armed
aggression" by Ukrainian forces during the referendum. Putin and
other Russian officials have said armed men who have taken control
of facilities in Crimea are local "self-defense" forces.
Crimea has a narrow ethnic Russian majority, and many in the
province of 2 million people clearly favor rule from Moscow. Opinion
has been whipped up by state-run media that broadcast exaggerated
reports of a threat from "fascist thugs" in Kiev.
"Enough with Ukraine, that unnatural creation of the Soviet Union,
we have to go back to our motherland," said Anatoly, 38, from
Simferopol, dressed in camouflage uniform and a traditional Cossack
fur cap.
But a substantial, if quieter, part of the population still prefers
being part of Ukraine. They include many ethnic Russians as well as
Ukrainians and members of the peninsula's indigenous Tatar
community, who were brutally repressed under Soviet rule.
"Crimea has been with Ukraine since the 1950s, and I want to know
how they will cut it off from what was our mainland," said Musa, a
Tatar. "If the referendum is free and fair, at least a little bit, I
will vote against Crimean independence."
The referendum seems to leave no such choice: Voters will have to
pick between joining Russia or adopting an earlier constitution that
described Crimea as sovereign. The regional assembly says that if
Crimea becomes sovereign, it will sever ties with Ukraine and join
Russia anyway.
Still, with the streets firmly in control of pro-Russian militiamen
and Russian troops, there is little doubt the separatist authorities
will get the pro-Russian result they seek. Many opponents, including
Tatar leaders, plan a boycott.
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At the White House, Obama ridiculed the referendum, saying: "The
issue now is whether Russia is able to militarily dominate a region
of somebody else's country, engineer a slapdash referendum and
ignore not only the Ukrainian constitution but a Ukrainian
government that includes parties that are historically in opposition
with each other."
"We will continue to say to the Russian government that if it
continues on the path that it is on, then not only us but the
international community, the European Union and others will be
forced to apply a cost to Russia's violation of international law
and its encroachments on Ukraine," he added. Obama said the United
States and Ukraine recognized the historic ties between Russia and
Ukraine, but added: There is a constitutional process in place and a
set of elections that they can move forward on that in fact could
lead to different arrangements over time with the Crimean region.
"But that is not something that can be done with the barrel of a gun
pointed at you," Obama said.
Yatseniuk said his government was eager for talks with Russia about
Ukraine but made clear his country "is and will be a part of the
Western world."
"We fight for our freedom, we fight for our independence, we fight
for our sovereignty, and we will never surrender," he said at the
White House.
"GRAVE IMPLICATIONS"
While tightening his grip on Crimea, Putin seems to have backed off
from his March 1 threat to invade other parts of eastern and
southern Ukraine, where most of the population, although ethnically
Ukrainian, speak Russian as a first language.
That threat exposed the limits of Ukraine's military, which would be
little match for the superpower next door and has seen its
detachments in Crimea surrounded. The authorities in Kiev announced
the formation of a new national guard on Wednesday.
But if Putin had expected to be able to seize Crimea without facing
any consequences — as he did when he captured parts of tiny Georgia
after a war in 2008 — the push toward sanctions suggests he may have
miscalculated.
In a statement, the leaders of the G7 — the United States, Britain,
France, Germany, Italy, Japan and Canada — called on Russia to stop
the referendum from taking place.
"In addition to its impact on the unity, sovereignty and territorial
integrity of Ukraine, the annexation of Crimea could have grave
implications for the legal order that protects the unity and
sovereignty of all states," they said. "Should the Russian
Federation take such a step, we will take further action,
individually and collectively."
The U.S. Senate Foreign Relations Committee approved legislation
that would impose strict sanctions on Russians involved in the
intervention in Ukraine and provide aid to the new government in
Kiev. The bill now goes to the full Senate for a vote and must also
be approved by the House of Representatives.
There has been a lot of diplomatic contact between Russia and the
West but no breakthrough. Putin spoke on Wednesday to French
President Francois Hollande and Swiss Foreign Minister Didier
Burkhalter, whose country chairs the Organization for Security and
Cooperation in Europe. U.S. Secretary of State John Kerry is due to
meet with Russian Foreign Minister Sergei Lavrov in London on
Friday.
Russia has pledged to retaliate for any sanctions, but EU leaders
seem to be betting that Moscow has more to lose than they do.
Merkel's finance minister, Wolfgang Schaeuble, said any potential
impact on Germany's economy was likely to be limited.
While the EU has agreed to wording for its sanctions, it is still
working on a target list. Talks took place in London this week
between officials from Britain, the United States, Italy, France,
Germany, Poland, Switzerland, Turkey and Japan.
"My understanding is that there was detailed discussion of names at
the meeting," an EU official said. "No definitive list has been
drawn up, but it will be ready by Monday."
European officials have indicated that Putin and Lavrov will not be
on the list, in order to keep channels of communication open. The
list is expected to focus on targets close to Putin in the security
services and the military, as well as lawmakers.
In the past, U.S. and EU sanctions against countries such as Syria,
Libya and Iran have started with lists of only around 20 people and
companies. But those lists quickly evolved into more powerful
weapons as other people and firms were added.
The EU has said it is also prepared to take further steps, such as
an arms embargo and other trade measures.
(Additional reporting by Luke Baker in Brussels, Jason Bush in
Moscow, Ron Popeski in Kiev, Stephen Brown in Berlin, and Steve
Holland, Roberta Rampton and Patricia Zengerle in Washington;
writing by Peter Graff and Peter Cooney; editing by Kevin Liffey,
Jonathan Oatis and Lisa Shumaker)
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