Ukraine warned Russia is amassing troops near its border as Prime Minister Arseniy Yatsenyuk visits Washington to step up the search for financial aid.
Russian forces, who’ve already seized control of the Crimean peninsula, continue to be deployed along Ukraine’s eastern border and are “constantly increasing their presence,” First Deputy Premier Vitaliy Yarema told the government in Kiev. Yatsenyuk, whose cash-strapped nation needs as much as $15 billion in loans, will meet President Barack Obama later today.
Russia’s takeover of Crimea, home to its Black Sea Fleet, has sparked the worst crisis with the West since the Cold War as the European Union and the U.S. try to use sanctions to force President Vladimir Putin to retreat. Russia’s incursions may spread to Ukraine’s east, according to Amanda Paul, an analyst and program executive at the European Policy Centre.
“With Crimea apparently well under Russia’s control, it can now play around with the east,” she said by e-mail from Brussels. “Ukraine seems to be doing its best not to be provoked by Russian aggression. But it’s like having your house robbed and having to stand and watch without doing anything.”
Putin says ethnic Russians in Crimea are at risk after an uprising in Kiev toppled Moscow-backed President Viktor Yanukovych, an assertion Ukraine’s new leaders deny. He supports Crimea’s recently appointed administration, which has organized a March 16 referendum on joining Russia.
In addition to the vote, Crimean leaders will nationalize state assets in the region, including energy company Chornomornaftogaz, the Interfax news service cited Deputy Premier Rustam Temirgaliev as saying today.
Russia’s military is “acting on clear orders to undermine Ukraine forces in Crimea,” Philip Breedlove, NATO’s top commander, said in a statement posted yesterday on the North Atlantic Treaty Organization’s website.
Crimea’s isolation from Ukraine has intensified. Kiev’s Boryspil airport said today on its website that Simferopol, the southern region’s capital, has canceled flights linking the two cities until the day after the referendum.
Russian forces control the roads leading to the peninsula and have also taken charge of a ferry crossing at Kerch and blocked harbors, according to Ukrainian border guards.
With tensions running high, Ukraine may create a 20,000- member National Guard to secure borders and offer a non-military “answer to destabilization,” Interior Minister Arsen Avakov said yesterday. Its military began drills March 10 to test combat readiness, with infantry, tanks and artillery participating in exercises yesterday in the eastern Kharkiv region, where pro-Russian demonstrators have rallied.
Yatsenyuk arrives in the U.S. with Ukraine racing to secure cash to repay billions in foreign debt after investors withdrew funds and central bank reserves plummeted. As well as Obama, he’ll meet Secretary of State John Kerry before traveling to New York tomorrow to address the United Nations Security Council.
Ukrainian government debt fell for a sixth day today, with the 2014 note dropping 1.2 percent to 90 cents on the dollar and heading for a record low. The hryvnia, which has slumped 11.9 percent this year, was 1.4 percent weaker at 9.35 per dollar.
The U.S. has pledged $1 billion in loan guarantees to Ukraine, while the EU has outlined an 11 billion-euro ($15 billion) package of loans and grants for the coming years tied to the country agreeing on a program from the International Monetary Fund, which sent a mission to Kiev last week.
“The EU will open its doors to exports from Ukraine,” European Trade Commissioner Karel De Gucht told reporters yesterday in Strasbourg, France. This “is more than a gesture, it is an economic lifeline.” The EU has had 610 million euros ready to go as soon as Ukraine reaches an accord with the IMF.
The World Bank said March 10 it’s ready to provide Ukraine with as much as $3 billion in 2014 after getting an aid request.
Russia’s Foreign Ministry yesterday called possible U.S. financial assistance to Ukraine illegal, saying support would violate American law barring aid to any regime that uses force to take power. Russia considers Yanukovych’s ouster a coup, c claim the U.S. rejects.
The U.S. and the U.K. are among Western governments threatening repercussions unless Putin pulls back troops in Crimea and begins talks with Ukraine’s new government.
Germany warned Russia yesterday it must switch course by next week or risk more sanctions and urged the cancellation of the Crimean referendum. The EU will discuss harsher penalties on March 17 barring “obvious changes in Russia’s actions,” German Foreign Minister Frank-Walter Steinmeier said in Estonia.
European Commission President Jose Barroso echoed those sentiments in comments to the European Parliament.
“If meaningful negotiations do not being within the next days and produce results within a limited timeframe, this will trigger additional measures,” he said today in Strasbourg. Group of Seven leaders later called on Russia to cease all efforts to annex Crimea, saying it’s breaking international law.
The EU announced a three-stage sanctions process against Russia last week, starting with the suspension of trade and visa-liberalization talks. Stage two includes asset freezes and travel bans for as-yet unidentified officials and would be imposed if Russia boycotts international talks on a settlement with Ukraine. Stage three envisages “additional and far- reaching consequences” if Russia further destabilizes Ukraine.
Britain hosted a meeting yesterday to compile a list of people who could be hit by sanctions. The U.S. banned visas for Russian officials and others it said were complicit in violating Ukraine’s sovereignty. Obama also authorized financial measures.
“We will be pushing for those travel bans to include some prominent Russian members of parliament,” U.K. Premier David Cameron told reporters today. “The criteria is people who’ve been pushing for the unacceptable steps that have been taken.”
Russia’s position is unchanged by the threat of sanctions, Foreign Minister Sergei Lavrov said March 4. Three days later, he cautioned Kerry against “hasty and ill-considered moves” that could hurt relations.
Polish Premier Donald Tusk said today the EU is seeking alternatives to “surrender or war” on Crimea and “effective, persistent pressure” on Russia is the best solution.
© Copyright 2016 Bloomberg News. All rights reserved.