BRUSSELS/MOSCOW, (Reuters) – The United States and the European Union agreed yesterday to work together to prepare possible tougher economic sanctions in response to Russia’s behaviour in Ukraine, including on the energy sector, and to make Europe less dependent on Russian gas.
U.S. President Barack Obama said after a summit with top EU officials that Russian President Vladimir Putin had miscalculated if he thought he could divide the West or count on its indifference over his annexation of Crimea.
Leaders of the Group of Seven major industrial powers decided this week to hold off on sanctions targeting Moscow’s economy unless Putin took further action to destabilise Ukraine or other former Soviet republics.
“If Russia continues on its current course, however, the isolation will deepen, sanctions will increase and there will be more consequences for the Russian economy,” Obama told a joint news conference with European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso.
In the keynote address of his European trip, Obama later told an audience of 2,000 young people that the West would prevail if it remained united, not by military action but by the power of its values to attract ordinary Ukrainians.
Russia would not be “dislodged from Crimea or deterred from further escalation by military force. But with time, so long as we remain united, the Russian people will recognise that they cannot achieve security, prosperity, and the status they seek through brute force,” he said.
In the speech in a Brussels concert hall, which resembled a point-by-point rebuttal of Putin’s March 18 Kremlin speech announcing the annexation of Crimea, Obama voiced respect for a strong Russia but said “that does not mean that Russia can run roughshod over its neighbours”.
He also said NATO would step up its presence in new east European member states bordering on Russia and Ukraine to provide reassurance that the alliance’s mutual defence guarantee would protect them.
Russian forces in Crimea captured the last Ukrainian navy ship after firing warning shots and stun grenades, completing Moscow’s takeover of military installations in the Black Sea peninsula. Kiev has ordered its forces to withdraw.
Western concern has focused on an estimated 30,000 Russian troops massed on Ukraine’s eastern border amid Kremlin allegations of attacks on Russian speakers in that industrial region of the country.
But Polish Prime Minister Donald Tusk said it seemed likely that the firm Western response so far would stop Russia undertaking what he called “other acts of aggression and interference on the territory of Ukraine”.
The new Ukrainian authorities announced a radical 50 percent increase in the price of domestic gas from May 1, meeting an unpopular condition for International Monetary Fund aid which Russian-backed President Viktor Yanukovich had refused before he was ousted last month. Russia has said it will increase the price it charges Ukraine for gas from April.
The IMF concluded talks with Ukrainian officials on Wednesday, and was likely to announce an aid deal on Thursday for Kiev to help plug the government’s budget gap and put its economy on a growth track. Ukraine has been seeking a bailout package of between $15 and $20 billion.
DEVELOP YOUR OWN
In response to EU pleas to expand U.S. gas exports to Europe to reduce reliance on Russian supplies, Obama said a new transatlantic trade deal under negotiation would make it easier to licence such sales.
However, he said Europe should also look to develop its own energy resources – a veiled reference to environmental resistance to shale gas extraction and nuclear power – and not just count on America.