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U.S. Says It Stands with Kiev Government; U.S. Reacts to Putin's Latest Moves; U.S. Weighing Sanctions Against Russia; Kerry Questions Putin's Crimea Claims; Reserve Right to Military Action; Allies Divided over Sanctions; Ukraine Tests Obama's Foreign Policy

Aired March 4, 2014 - 13:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


WOLF BLITZER, CNN ANCHOR: Hello, I'm Wolf Blitzer reporting from Washington. We want to welcome our viewers in the United States and around the world. We have lots to cover this hour on the ongoing crisis in Ukraine, and there are major developments.

The secretary of state, John Kerry, was in Kiev, Ukraine, meeting with the new government there and touring the site of last month's deadly protests. A short time ago, both he and President Obama made clear their support for that new Ukrainian government, contradicting the Russian president, Vladimir Putin's claims that Ukraine has no legitimate leaders. President Obama dismissed that claim, adding that Russian's invasion of Crimea was a miscalculation.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I actually think that this has not been a sign of strength but rather is a reflection that countries near Russia have deep concerns and suspicions about this kind of meddling, and, if anything, it will push many countries further away from Russia. There is the ability for Ukraine to be a friend of the west's and a friend of Russia's.

(END VIDEO CLIP)

BLITZER: Secretary of state, John Kerry, just left Kiev for talks in Paris. It was even more forcefully said, all of Putin's claims are false.

(BEGIN VIDEO CLIP)

JOHN KERRY, SECRETARY OF STATE: Not a single piece of credible evidence supports any one of these claims. None.

(END VIDEO CLIP)

BLITZER: Adding to the tensions in Crimea right now, it's occupied by thousands of Russian troops. There are reports Russian warships have blocked the narrow in Kerch Strait between Crimea and Russia. At an earlier news conference, President Putin denied there are any Russian troops in Crimea. He said 22,000 armed forces there are, quote, "self-defense teams." That's his words.

Let's bring in CNN's Barbara Starr. She's over at the Pentagon for us. You have some new information, Barbara, in how the U.S. sees the next few days, and these will be tense days, unfolding.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Indeed they will, Wolf. We have learned that behind the scenes, the Obama administration believes some time in the next couple of days, two, three days or so, Vladimir Putin will make a decision on his next move. The big question is will he put more military force into Crimea or possibly into eastern Ukraine? U.S. officials will tell you that Putin's intentions are quite opaque right now. Anybody who knows what he's thinking probably doesn't really know. They're very concerned about it.

But here's their calculation. They feel that Putin has essentially consolidated his grip, if you will, on Crimea. He doesn't have to put anymore into that area. But he may have to make a decision about the rest of eastern Ukraine. He has 150,000 troops on the border that have been conducting that exercise. The exercise essentially over but not all of the troops have gone back to their bases.

So, there is plenty of Russian troops out and about with their equipment, with their weapons. Before they all go back to base, will Putin order them to cross the border? That's why the next two days are so important. That's why we are told, you are seeing this heavy international, diplomatic push, led by the United States, trying to give Vladimir Putin that diplomatic off-ramp from this crisis in the next two to three days -- Wolf.

BLITZER: Let's see if he takes that off-ramp or not. Thanks, Barbara.

Let's go to Elise Labott right not. She's traveling with the secretary of state, John Kerry. He just wrapped up a historic meeting in Kiev. I take it you're still on the ground in Kiev. Is that right, Elise?

ELISE LABOTT, CNN CORRESPONDENT (via telephone): Wolf, we're in the motorcade about to go to the -- to (INAUDIBLE) where secretary Kerry will be attending a meeting of Lebanon Doners' Conference, but he'll also meeting with members of the U.K., the foreign secretary, William Hagen, also the Ukrainian foreign minister. He invited the Russian foreign minister, Sergey Lavrov, to join them as part of the signatories of this Budapest amendment. This is part of what the U.S. was hoping would be part of a diplomatic way forward. But the Russian foreign minister declined to attend the meeting, citing scheduling conflicts. So, even as the U.S. pushes for this diplomatic way forward, it's looking very rough -- Wolf.

BLITZER: Looking very rough indeed. So, he has wrapped up his talks. The U.S., and correct me if I am wrong, it does formally recognize this new interim government in Kiev, the government that replaced the ousted president as the legitimate government of Ukraine, right?

LABOTT: That's right. It doesn't recognize President Yanukovych as the president of Ukraine any longer, even though that's what the Russians are recognizing. Secretary Kerry met with many members of the new government, met with members of the parliament and said that the U.S. wants to help them move towards the elections that they'll be having. In May, they'll be training monitors. And they also announced a very robust aid package for Ukraine to the tune of $1 billion in loan guarantees as Ukraine tries to wean itself off of this dependence on Russian oil and gas.

BLITZER: Elise Labott, have a safe flight out of Kiev on the way to Paris with the secretary of state. Thank you.

Despite all the evidence to the contrary, president Putin made the extraordinary claim today, no Russian troops have entered Crimea. But he warned, he reserves the right to use military force if ethnic Russians in Crimea are threatened.

(BEGIN VIDEO CLIP)

VLADIMIR PUTIN, PRESIDENT, RUSSIA (translator): No, I'm not worried because we are not going to go to war with Ukraine. But Ukraine has the army. I want you to understand clearly. If we do this, it will only be to protect local people and let them only dare shoot women and children.

(END VIDEO CLIP)

BLITZER: Our Phil Black is monitoring the crisis. He's joining us from Moscow right now. So, Putin repeated his claim that the government in Kiev is not legitimate. This is the government and the U.S. and so much of the rest of the world recognizes as the legitimate government of Ukraine. So, how significant is it right now that there is basically such a huge difference of legitimacy of this current government in Ukraine?

PHIL BLACK, CNN CORRESPONDENT: Well, it's pretty significant, Wolf, because what it allows president Putin to do is effectively ignore this government. Although he says it is not -- he is not ignoring it in its entirety, that there are some contacts between the Russian government and the Ukrainian government, at some level. He wasn't specific. What he has said is that he does not see the new president, the acting president, as legitimate. This interim government of cabinet ministers and officials, they are not legitimate either.

He went further than that and said that because this is a new state emerging from a revolution, indeed a revolution that he believes is illegal, then Russia is not bound to any of the previous agreements that it had signed with Ukraine. So, by that logic, by that thinking, it very much gives Russia a free hand to do as it pleases.

And Vladimir Putin says that he believes he has the right, if necessary, to take further military action, particularly in the east of the country, if he believes there is a threat to ethnic Russians in that region. But as we have been talking about, the United States, the west and indeed our own reporting on the ground, does not suggest that such a threat exists -- Wolf.

BLITZER: And he's insisting, Phil, that no Russian troops have entered Crimea, although there are thousands of Russian troops all of the time in Crimea at that port there where they're permanently based, right? BLACK: Yes, that's right. That is the other claim. That really flies against not only what we and now teams are seeing on the ground, but very much what the west, Europe and the United States believe. And it seems to fit into what is a growing narrative from Moscow, from president Putin, where they are trying to paint all the events that are taking place on the ground in Crimea as very much an organic, grass roots local rejection of what has been taking place in Kiev and the new government there. They are trying to paint it as the local people essentially trying to determine their own future.

And so, as this region moves towards holding a referendum on breaking away from Ukraine, Vladimir Putin is saying that, ultimately, it is the wishes of the people that have to be respected.

So, in the event that referendum is held, in the event that a majority of people vote to break away from Ukraine, you would think that, under those circumstances, Moscow will then push the world to accept that result. Vladimir Putin today said, this isn't a land grab. They're not annexing Crimea, as such. But what could be one possible scenario is where Ukraine -- sorry, Crimea does vote to move away from the rest of Ukraine and effectively become a client state heavily dependent on Moscow -- Wolf.

BLITZER: All right, let's see what happens. Phil Black in Moscow, thank you.

The United States and its allies are considering sanctions against Russia. No sanctions have yet been imposed. But what would those sanctions look like?

Let's bring in CNN's Tom Foreman. Tom, is there some sort of combination of sanctions that actually might work? What do they have in mind?

TOM FOREMMAN, CNN CORRESPONDENT: Well, they don't have a military option in mind for a lot of different reasons because it doesn't seem like it would work. But when we talk about sanctions here, it becomes a very sketchy equation. Look at the world economy right now. $16.7 trillion, that's the GDP of the United States; Europe, European Union, $15.8 trillion; and Russia, by comparison, kind of small, $2.6 trillion.

So, if they could bring this economic power against Russia to somehow isolate it or put pressure on it, could it have an impact? Maybe. Russia was hit hard in 2008 and 2009 by the worldwide recession, harder than most. So, it might be somewhat vulnerable. But bear in mind, $2.6 trillion. This this is isn't Syria. This isn't Libya or Iran or Iraq or some other country that, by comparison, would feel the squeeze more. This is one of the great nations of the world and it can withstand a lot.

Plus, there must be unity, specifically from the European part, not so much from the American part, from the European part, to make this stick. And this is why. If you look at Russia, one of their biggest trading partners out there is Germany. Germany, $74 billion worth of trade with Russia every year. Beyond that, China, almost $88 billion worth of trade. Germany is already showing a reluctance to go along with a big-time economic impact in Russia. So has France. It's not clear what U.K. is going to do. China would almost certainly not go along with such a thing.

If none of that falls by the wayside, the impact becomes blunted and Russia, with its GDP and trade, might be able to withstand it, especially because of this. Russia remains a big oil and natural gas producer for Europe, and about 24 percent of the oil and natural gas, or the natural gas from Russia, goes to Germany right now. And another 24 percent goes to eastern European nations.

So, the bottom line is, if you hurt Russia, this can be used for Russia to hurt other nations back. And that's not even counting the general spillover effect which could happen if you look at the whole impact of the region. If you hurt Russia with its economy, the spillover is going to affect a lot of places out in here, some places over in here. And if that happens, those nations may squawk, saying they, too, were hurt by the recession. They're not ready to hurt again. It makes a difficult job for the United States and European powers to really pull together all the political and economic powers they would need to actually have an impact on Russia -- Wolf.

BLITZER: Threatening and talking about sanctions clearly a lot easier than actually imposing real painful sanctions on Russia. Good explanation, Tom. Thanks very much.

Up next, as the U.S. threatens Vladimir Putin with those sanctions, President Obama may not be able to back up that support from some of his closest allies in Europe. We're going to explain what's going on.

And later, Ukraine poses a tough foreign policy challenge for President Obama but will it unite members of Congress against Russia? Gloria Borger is standing by to discuss.

(COMMERCIAL BREAK)

BLITZER: For days, President Obama has been calling U.S. allies, trying to drum up support for sanctions against Russia, but there appears to be a real division among European countries on just what to do about this crisis in Ukraine. Becky Anderson is joining us. She's just outside number 10 Downing Street in London.

Becky, we got a little peek, almost literally, into this division with a photograph of a document being carried into the British prime minister's office. What did we learn from this picture?

BECKY ANDERSON, ANCHOR, CNN INTERNATIONAL: Well, whether it was simple carelessness, Wolf, on the part of a senior British official, or as some are suggesting here by deliberate design, the display of that document, which was a foreign office dropped document for the national security council here on Russia. The display of it and what it said supports the notion that the U.K. would see long-term economic consequences which would be severe of any trade sanctions on Russia.

You and Tom just before the break were talking about just how important individual E.U. countries are with their bilateral relationships with Russia. And the U.K., for example, invests about $60 billion annually in Russia, coming back this way to London's financial center, is something like $40 billion. So you can understand the bilateral trade relations here are very, very important.

Listen, the official word from behind me at Number 10 is that David Cameron, the prime minister, is in lockstep with his international partners. But believe me when I say a cohesive E.U. policy on trade sanctions at this point will be very complicated and very costly.

Wolf.

BLITZER: Yes, I - I totally agree. I think you're absolutely right. All right, Becky, thanks very much.

So if Europe is so deeply divided over sanctions, where does that leave the United States? Can the U.S. impose sanctions alone? Let's bring in our own Fareed Zakaria into this conversation. He's the host of "Fareed Zakaria GPS."

What's the answer to that, if the U.S. doesn't have much support from some critical European allies, like Germany, for tough sanctions against Russia, where does it leave all of this?

FAREED ZAKARIA, HOST, CNN'S "FAREED ZAKARIA GPS": It's very tough to do sanctions if you don't have the Germans and the British on board. Remember, Europe imports almost 30 percent of its national gas -- of its energy from Russia, from Russian natural gas. Sometimes it goes even higher than that. So they are going to be very reluctant to do the kind of comprehensive sanctions, which would - which would deprive them of that energy. And as you point out, London's role as a financial center is dependent on, among other things, Russia's capital.

I think we should still push for as comprehensive sanctions as we can get. You're never going to get totally comprehensive sanctions, but they do exact a price. And what we're trying to do here, Wolf, as I see it, what the United States is trying to do with many members of the international community are going, is to make Russia pay some price, some significant price, isolate it, and send a signal that this is not how we want business to be conducted in the 21st century. You're not going to be able to stop it in its tracks. You're not going to be able to send troops into Crimea. But the fact that we can't get 100 percent leak proof sanctions doesn't mean we shouldn't try to raise the bar and exact some price.

BLITZER: I want you to listen, Fareed, to what the secretary of state, John Kerry, said in Kiev today. He said this just before leaving the Ukrainian capital. Listen to this.

(BEGIN VIDEO CLIP)

JOHN KERRY, SECRETARY OF STATE: Russia, if it wanted to help deescalate the situation, could return its troops to the barracks, live by the 1997 base agreement and deescalate rather than expand their invasion. Now, we would prefer that. I come here today at the instruction of President Obama to make it absolutely clear, the United States of America would prefer to see this deescalating.

(END VIDEO CLIP)

BLITZER: Are you getting any indications that Putin and the Russians are about to deescalate this crisis?

ZAKARIA: It doesn't appear to (INAUDIBLE). I think John Kerry was, in a sense, hoping that what had worked perhaps inadvertently in Syria is going to work this time, where he put out a wish and the Russians, if you remember, grabbed that wish and said, well, fine, if that's what the plan is in Syria, which is to get those chemical weapons out, we can try and make that happen. In this case, the Russians are not trying to deescalate. What they're trying to do is lock in. Lock in the gains they have made by making Crimea essentially out of -- putting it outside of the control of the Ukrainian government.

I think what we have to do deter -- is to deter Russia from doing anything further in the Ukraine, but also start recognizing that there has to be a political solution here, which will involve the Russians. Whether that involves some kind of referendum on the status of Crimea, special autonomous status -- remember, right now, Crimea is essentially part of Russia. It has been taken over. We need to try to find a way to not let that stand as a fact of international life. And that involves dealing with the Russians. So while I'm glad secretary of state went to Kiev, he probably needs to go to Moscow pretty soon.

BLITZER: Yes, I suspect you're right on that front. Let's see what happens. All right, Fareed, thanks very much.

Up next, this escalating crisis in Ukraine is certainly creating a foreign policy challenge for President Obama, probably the most significant foreign policy challenge that he's had since taking office. So what will he do next? Will he get support at home? Will he get it around the world? Our chief political analyst, Gloria Borger, she's getting ready to weigh in.

And later, Vladimir Putin has donned (ph) the U.S. and western allies for intervening in foreign countries in the past. So how is he justifying his Ukrainian intervention? We're taking a closer look.

(COMMERCIAL BREAK)

BLITZER: The escalating crisis in Ukraine is raising more questions about President Obama's foreign policy strategy. Critics were quick to condemn the president's overall approach, but even they concede his options in this particular situation are limited. So how is the administration planning to respond to Russia's actions in Ukraine? Our chief political analyst, Gloria Borger, is here with me.

Gloria, lots to discuss right now.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Yes.

BLITZER: Sanctions. Easier said than done.

BORGER: Well, he - BLITZER: And talk right now, pretty cheap. Getting everyone to impose sanctions, not that easy.

BORGER: Right. And this is a real leadership challenge for the president because the United States alone is not even among Russia's top 10 trading partners, OK? But when you look -- we have $40 billion in exports. We looked at some of these numbers. In contrast, Europe does about $460 billion in business with Russia. Russia is Europe's biggest supplier of natural gas. And so when the president goes to our reluctant allies, some of whom include Germany and Great Britain, he has to say, you've got to be in this with us. And they say, well, that's easier for you to say than us because it's going to hurt us a lot more. So he has to find some kind of balance, some kind of sanctions that everybody can sign on to that will actually do the damage they want to inflict on Putin.

BLITZER: And he's getting some damage also for some of his critics, and there are a lot of them, in Congress.

BORGER: Right.

BLITZER: Republicans in particular, who say, you know what, he's to blame, in effect, for showing weakness over the first five years of his administration -

BORGER: Yes.

BLITZER: Encouraging someone like Putin to make these bold moves in Crimea.

BORGER: Well, they say --

BLITZER: That's the - that's the accusation.

BORGER: They say -- they say, as John McCain said to you the other day, that the president's been somewhat naive. Remember when Hillary Clinton, when she was secretary of state, pushed the reset button with our relationship with Russia. They would argue that the blurred red line in Syria, where the United States vacillated, gave Putin the opening to do what he wants to do, in Ukraine.

Having said all of that, you put it aside and you look at the situation in Congress right now, Wolf, and, ironically, the president's got a pretty united Congress behind him because there's nobody calling for troops on the ground. What they're calling for are forceful sanctions. This loan guarantee is something that Congress is going to support. They're having hearings this week. You could have legislation as early as next week.

So while the president has trouble with our European allies, he's not going to have a lot of trouble, ironically, here at home, because people want to do something forceful and strong, and so he's got congressional support. It's just a matter of --

BLITZER: Because you hear the argument, and I've heard it all day today from some - BORGER: Yes.

BLITZER: Why should the U.S. be more concerned about what's going on in Ukraine than the rest of our NATO and European allies are? Why is it always the United States that -

BORGER: Because we're the leader of the world, period, and -

BLITZER: Yes, I know. But if the Europeans and Germany are not that outraged - I mean they're outraged but they're not ready to impose sanctions, why should the U.S.?

BORGER: They're outraged because - they believe this is going to hurt them more than it's going to hurt us. So they believe we shouldn't be in a position of telling them what to do because we're not going to bear most of the burden on this. And these are domestic, political problems these leaders have to deal with at home.

I think what Obama's got to navigate is this very complex issue here of how much he can get the Germans to do, how much he can get the Brits to do, and still make it hurt. And I would argue that's our role in the world. And for those who say the president is not a leader on the world stage, this is his opportunity to show whether he is or he isn't.

BLITZER: Let's see what happens.

BORGER: Yes.

BLITZER: Gloria, thanks very much.

Coming up, critics of President Obama are piling on. There's lots of criticism over what's going on. So what are those critics proposing to do in actual terms to end the standoff with Russia? We'll take a closer look.

And inside the hypocrisy of Vladimir Putin, condemning others for what he's now doing himself in Ukraine. Stay with us.

(COMMERCIAL BREAK)