Facing what many consider his greatest foreign policy crisis, President Obama declared Monday that Russia’s military intervention in Ukraine’s Crimean peninsula will be a “costly proposition” as the U.S., along with its Western allies, prepare to impose harsh economic sanctions if it doesn’t reverse course.
Moscow’s aggressive act has heightened tension between the two nations not seen since the end of the Cold War roughly 25 years ago. This showdown with President Vladimir Putin, who has the backing of the Russian Parliament, represents a critical leadership test for the president.
In remarks from the Oval Office – he was set to meet with Israeli Prime Minister Benjamin Netanyahu to salvage a Middle East peace plan at the time – Obama also urged Congress to pass an economic package that would bolster the new Ukrainian government that took control after the ouster of fugitive President Viktor Yanukovych last week. As the situation grows more precarious, GOP lawmakers – including former presidential opponents –  have used the Ukraine episode to slam the president for being too passive with Putin. For instance, John McCain (R-Ariz.) said at the American Israel Public Affairs Committee conference in Washington Monday: “This is the ultimate result of a feckless foreign policy where nobody believes in America’s strength anymore,†he added.
Obama’s response, however, was a call for bipartisan cooperation and action.
“I’ve heard a lot of talk from Congress about what should be done, what they want to do. One thing they can do right away is to work with the administration to help provide a package of assistance to the Ukrainians, to the people and that government,” he told reporters. “And when they get back in, assuming the weather clears, I would hope that that would be the first order of business. Because at this stage there should be unanimity among Democrats and Republicans that when it comes to preserving the principle that no country has the right to send in troops to another country unprovoked, we should be able to come up with a unified position that stands outside of partisan politics. And my expectation is, is that I’ll be able to get Congress to work with us in order to achieve that goal.”
Despite the political battles at home, the president told reporters that he spent the weekend talking to European leaders.
“I think the world is largely united in recognizing that the steps Russia has taken are a violation of Ukraine’s sovereignty…a violation of international law…and, as a consequence, we got strong statements from NATO, from the G7, condemning the actions that Russia has taken,” he stated. “And we are going to continue these diplomatic efforts during the course of this week.” The US, along with other leading industrialized nations Canada, France, Germany, Italy, Japan and the United Kingdom, have already suspended preparatory talks for the G8 Summit scheduled to be held in Sochi this June.
But Putin, the former KGB colonel, has countered such charges, stating in a press conference from his residence outside Moscow on Tuesday that Russia reserves the right to use “all means” necessary to protect its citizens in Ukraine. Charging that the US and its Western allies embrace double standards, he further asserted, “Our actions are often described by the West as not legitimate, but look at the U.S. operations in Afghanistan, Iraq and Libya. Our actions are legitimate from the point of view of international law because Ukraine’s president asked us for help.”
If Moscow refuses to back down, however, Obama administration officials say they may take even more punitive action if Moscow refuses to back down. “There could be, ultimately, asset freezes, visa bans. There could certainly be disruption of any of the normal trade routine. There could be a business drawback on investment in the country,” Kerry said on Meet The Press Sunday.
Even without the initiation of economic sanctions, Russia is already feeling the pain. On Monday, the Moscow stock market suffered one of its biggest one-day declines in recent years and the ruble plunged sharply in reaction to the Kremlin’s maneuver. Moreover, companies on the Moscow stock exchange have lost billions in market value. And the central bank raised its main interest rate from 5.5% to 7%
— the largest hike since financial crisis that hit Russia in 1998.The Moscow stock market was not alone in taking a battering though. US stocks and other global equities took a nosedive on Monday due to jittery investors. The S&P 500 Index fell 0.7 % to 1,845.73, the biggest slide in a month, wiping out a gain for the year after the index finished last week at a record. The Dow Jones Industrial Average dropped 153.68 points, or 0.9%, to 16,168.03. In Europe, Germany’s DAX was walloped, plummeting 3.1 % – one of its biggest daily declines in eight months – while the continent’s other major stock markets dipped about 2%. The yen, U.S. Treasuries and gold rose as investors sought safe havens.
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Energy prices are also expected to rise in Europe since Russia supplies 30% of the continent’s natural gas and the Trans-Siberian Pipeline — one of its main export pipelines, runs through the Ukraine, according to TheGuardian.com.
In face of such economic and financial volatility, the administration continues its series of diplomatic efforts. According to White House officials, Vice President Biden talked with Ukrainian Prime Minister Arseniy Yatsenyuk on Monday afternoon to review economic reforms as well as spoke with Estonian President Toomas Ilves as a means of gaining regional support.
Secretary of State John Kerry, Tuesday, will travel to Kiev to offer economic aid to the
Ukrainians, the president said, as a means of “stabilizing the economy even in the midst of this crisis” as well as communicate to Moscow that “if they continue on the current trajectory that they’re on, that we are examining a whole series of steps – economic, diplomatic – that will isolate Russia and will have a negative impact on Russia’s economy and its status in the world.”Obama further stated: “The question for Mr. Putin, who I spoke to directly, and the question for the Russian government generally is if, in fact, their concern is that the rights of all Ukrainians are respected, if, in fact, their primary concern, as they’ve stated, is that Russian speakers and Russian nationals are not in any way harmed or abused or discriminated against, then we should be able to set up international monitors and an international effort that mediates between various parties, that is able to broker a deal that is satisfactory to the Ukrainian people…not to the United States, not to Russia, but to the Ukrainian people…and we should be able to deescalate the situation.â€
The president plans to not waver from his stance as he continues to promote his unified alliance: “I think the strong condemnation that its received from countries around the world indicates the degree to which Russia is on the wrong side of history on this.”