• Friday, January 30, 2015

US pledges 1 billion for Ukraine

Star Online Report
 Military personnel, believed to be Russian servicemen, walk in formation outside the territory of a Ukrainian military unit in the village of Perevalnoye outside Simferopol on March 3. Photo: Reuters.
Military personnel, believed to be Russian servicemen, walk in formation outside the territory of a Ukrainian military unit in the village of Perevalnoye outside Simferopol on March 3. Photo: Reuters

Secretary of State John F Kerry brought a pledge of 1 billion dollars in US loan guarantees for Ukraine’s new anti-Russian leadership as he arrived in Kiev to show solidarity with former opposition leaders now facing a military standoff with Moscow reports the Washington Post.

Kerry was in the Ukrainian capital for talks Tuesday that US officials hope will help the interim leaders in Ukraine prepare for elections and recover looted assets.

Kerry is the highest-level American official to come to the former Soviet republic since the ouster of Ukraine’s Russian-backed leadership 10 days ago and Russia’s move to occupy Ukraine’s strategic Crimean Peninsula.

Kerry is pledging economic and technical help for the new leadership, but no military backing now.

New economic sanctions against Russia are coming in “days, not weeks,” a US official traveling with Kerry said.

The United States watched with alarm as the confrontation with Moscow over Ukraine escalated in recent days, including with an apparent Russian attempt to fly military aircraft into Ukrainian airspace Monday.

Moscow has sent as many as 16,000 troops onto the streets to guard Russian military assets in Crimea.

Kerry was not planning to travel to Crimea.

In Kiev, Kerry was visiting a memorial to some of the scores of civilians killed when government forces opened fire last month on street protests against the Moscow-backed government of President Viktor Yanukovych.

Yanukovych fled to Russia more than a week ago and maintains he is still Ukraine’s legitimate leader.

Kerry has argued that Yanukovych lost his claim on power when he fled, and he said the new government deserves solid Western backing to begin work and to recover stolen national assets.

Although Kerry’s trip was a firm symbolic boost to the new leadership, US officials traveling with him said the United States and other Western states are trying to give Russia a graceful way to back down.

Sending international monitors to Crimea to ensure that Russian speakers are not mistreated is one option, officials said.

The 1 billion Kerry is offering is pending approval by Congress. It would help protect Ukraine from likely price increases for energy if Russian supplies are slashed.


Russia responded that it was only protecting its interests and those of Russians in Ukraine.

“Those who try to interpret the situation as an act of aggression, threaten us with sanctions and boycotts, are the same partners who have been consistently and vigorously encouraging the political powers close to them to declare ultimatums and renounce dialogue,” Sergey V Lavrov, the Russian foreign minister, said in a speech in Geneva.

The Pentagon press secretary, Rear Adm John Kirby, said in a statement: “Although the Department of Defence finds value in the military-to-military relationship with the Russian Federation we have developed over the past few years to increase transparency, build understanding and reduce the risk of military miscalculation, we have, in light of recent events in Ukraine, put on hold all military-to-military engagements between the United States and Russia.”

The crisis prompted tense meetings at the United Nations, Nato and the Organisation for Security and Cooperation in Europe.

Nato called its second emergency meeting on Ukraine in response to a request from Poland under Article 4 of the North Atlantic Treaty relating to threats to a member state’s security and independence.

Meeting in Brussels, European Union foreign ministers called on Moscow to return its troops to their bases. They also threatened to freeze visa liberalization and economic cooperation talks and skip a Group of 8 summit meeting to be hosted by Russia in June.

Heads of the European Union governments will meet in emergency session on Thursday to discuss the measures.

But the Europeans made clear they were not yet willing to go as far as the United States in terms of economic strictures at this point. Frank-Walter Steinmeier, the German foreign minister, said that “crisis diplomacy is not a weakness, but it will be more important than ever to not fall into the abyss of military escalation.”

Frans Timmermans, the foreign minister for the Netherlands, the largest Russian export market, told reporters that “sanctions are not in order today but sanctions will become inevitable” if there is no change in Russia’s position.

Visiting Kiev, Britain’s foreign secretary, William Hague, urged Russia to pull back its forces or face “significant costs,” echoing comments made by Obama and Kerry, who was to arrive in Kiev, the Ukrainian capital, on Tuesday.

But a British government document carried by an official near 10 Downing Street in London and photographed by a journalist indicated a resistance to tougher measures.

The document, shown on the BBC, said that Britain should support ways of providing energy to Ukraine “if Russia cuts them off” but that European ministers should “discourage any discussion” of military preparations.

“The UK should not support for now trade sanctions or close London’s financial center to Russians,” the document said.

Russia is effectively the world’s biggest energy supplier, exporting more natural gas than any other country and more oil than any other nation after Saudi Arabia.

Russia is also the biggest exporter of industrial metals and the fifth-biggest consumer market globally.

“The biggest argument for severe economic sanctions not being imposed is that the European countries don’t have much of an alternative to Russian energy supplies,” said Jens Nordvig, the New York-based managing director of currency research at Nomura Holdings Inc.

Several of the biggest Western energy companies have major investments in Russia, including BP and Royal Dutch Shell.

It may also be difficult for Obama to sell sanctions to the American business community if it is being cut off while competitors still have access to Russian markets.

Russia is Pepsi’s second-largest market and a significant market, too, for firms like Boeing, General Motors, John Deere and Procter & Gamble.

ExxonMobil, the largest American oil company, has a joint venture deal with the state-controlled oil company, Rosneft, to explore what may be a very rich Arctic area called the Kara Sea.

ExxonMobil is also working with Rosneft on drilling in the Baltic Sea and on other projects.

But congressional leaders said they would move forward with sanctions as well as aid to Ukraine.

A Senate Foreign Relations Committee bill would use $200 million in aid and loan guarantees to leverage $1 billion in international economic assistance.

An additional $50 million would be steered from existing State Department accounts for electoral administration.

Beyond that, lawmakers are drafting legislation focused on denying visas to members of Putin’s inner circle and denying Russia assistance through the International Monetary Fund. Representative Eric Cantor of Virginia, the majority leader, said House leaders were reviewing measures aimed at “Russian officials, oligarchs and other individuals complicit in Russia’s efforts to invade and interfere with Ukraine’s sovereign affairs.”

Published: 10:19 am Tuesday, March 04, 2014

Last modified: 8:20 pm Tuesday, March 04, 2014

TAGS: US Ukraine United States Russia The New York Times military Crimea

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