Crimea Takeover Builds to Expose Ukraine Escalation Risk

Russian Naval Vessel in Ukrainian Port

(Bloomberg – bloomberg.com – Volodymyr Verbyany, Daryna Krasnolutska & Stepan Kravchenko – March 9, 2014)

Pro-Russian forces advanced in Ukraine’s Crimean peninsula, ignoring Western calls to abandon a military takeover in the run up to a separatist referendum slated for March 16.

Russian forces took control of the province’s Chernomorskoye border base today, detaining Ukrainian soldiers, a day after gunmen fired warning shots at international observers and refused them entry. A Ukrainian border patrol plane escaped unscathed after taking fire yesterday and TV5 reported a military agency in the regional capital Simferopol was captured, and 70 unidentified trucks entered the city.

Ukraine is struggling to keep hold of Crimea, home to Russia’s Black Sea Fleet, after pro-Russian forces took control following last month’s ouster of Moscow-backed leader Viktor Yanukovych. The U.S. estimates there now are 20,000 Russian troops confronting a smaller Ukrainian force. Russia has yet to acknowledge it has taken control ahead of the referendum in the worst standoff between it and the West since the Cold War.

“There clearly are Russian troops in Crimea,” U.K. Foreign Secretary William Hague said today on BBC TV. “The long-term effect will be to unite Ukraine more against Russian domination of their affairs and to recast European policies in a way that will reduce Russian leverage over Europe.”

‘Intensive Contacts’

Pro-Russian units planted minefields in the Kherson region, north of Crimea on Ukraine’s mainland, and began to install border markers between the two regions, news website Khersonskie Vesti reported today.

Russian forces broke into the radio unit of a Ukrainian border checkpoint in the Crimean city of Sevastopol, according to a statement on the state border guard service’s website. Attackers in military and civilian clothes broke into a building, dismantled radio equipment and cut cables, it said.

Russian soldiers stormed a Ukrainian division at Shcholkino, beating servicemen, confiscating their mobile phones and forcing them and their families to leave, the border service said. Thirteen border units are being blocked.

The service also said 100 Russian soldiers and 50 other men took control of the ferry across the Kerch Strait to Russia, stopping border guards from inspecting 31 trucks arriving in Crimea. Armed men attacked and entered a Ukrainian base in Sevastopol, the Defense Ministry in Kiev said March 7. The men withdrew after talks, according to TV5.

‘Soldier’s Mistake’

“Russia and Ukraine, right now, are one nervous 20-year-old soldier’s mistake away from something very, very bad happening that could spin out of control,” said Steven Pifer, a former U.S. ambassador to Ukraine. There are about 12,000 Ukrainian troops in Crimea, he said.

Pifer said Russian forces have tried to provoke Ukraine’s military, and that it was “very commendable” the Ukrainians haven’t challenged the Russians who’ve surrounded their bases. Ukrainian border troops will leave Crimea only if “forced,” the head of the border guard service, Pavlo Shysholin, told reporters in Kiev today.

The observers stymied yesterday by gunmen from monitoring events were from the Organization for Security and Cooperation in Europe, Tatyana Baeva, a spokeswoman for the 57-state group that includes Russia and the U.S., said by phone from Vienna. Nobody was injured as warning shots were fired, she said. Russia isn’t taking part in the mission.

Russian Majority

Russian Foreign Minister Sergei Lavrov and U.S. Secretary of State John Kerry discussed the situation by phone yesterday, agreeing that “intensive contacts” were necessary to resolve the crisis, according to a statement by the Foreign Ministry in Moscow.

Kerry “made clear that continued military escalation and provocation in Crimea or elsewhere in Ukraine, along with steps to annex Crimea to Russia would close any available space for diplomacy, and he urged utmost restraint,” according to a statement from the U.S. State Department.

As Putin opened the 2014 Paralympic Games in Sochi on March 7, lawmakers in Moscow pledged to accept the results of a March 16 referendum on Crimea joining Russia.

The peninsula, where Russian speakers comprise a majority, will join Russia once parliament in Moscow passes the necessary legislation and there’s nothing the West can do to stop the process, according to Sergei Tsekov, the deputy speaker of Crimea’s parliament.

“There’s no comeback, and the U.S. or Europe can’t impede us,” Tsekov said by phone yesterday from Moscow, where he met Russian officials to discuss the region’s future. “Crimea won’t be part of Ukraine anymore. There are no more options.”

Rejecting Referendum

Ukrainian Prime Minister Arseniy Yatsenyuk will travel to the U.S. for “top level” talks, he said at a cabinet meeting today. U.S. President Barack Obama had phone conversations this week with leaders of EU states including France, the U.K., Germany, Italy and the Baltic former Soviet republics Latvia, Lithuania and Estonia, according to the White House.

All of the leaders Obama talked with “rejected the proposed referendum in Crimea as a violation of Ukraine’s constitution,” and all “agreed on the need for Russia to pull its military forces back to their bases,” according to a White House statement.

Russian Deputy Foreign Minister Grigory Karasin met Volodymyr Yelchenko, Ukraine’s ambassador to Moscow, yesterday. The two discussed relations in a “frank atmosphere,” the Russian Foreign Ministry said in a statement on its website.

Putin says he’s defending Ukraine’s ethnic Russians, who make up 59 percent of Crimea’s population. Ukraine’s government in Kiev says they aren’t under threat.

International Coalition

The U.S. and European allies will move together to impose sanctions if there isn’t a quick resolution, Obama said at the White House on March 6. Germany wants to “mobilize an as-broad-as-possible international coalition” to counter Russian threats over Ukraine, Frankfurter Allgemeine Sonntagszeitung reported, citing unidentified people from the Foreign Ministry.

Obama, who is spending this weekend in Key Largo, Florida, has urged Ukraine to control its military and avoid giving Russia a pretext to escalate with military force, said two U.S. officials who requested anonymity to discuss intelligence reports and diplomatic contacts.

Lavrov, in his conversation with Kerry, warned against “hasty and ill-considered moves that can damage Russian-American relations, especially sanctions, which would inevitably boomerang on the United States,” the Russian Foreign Ministry said in its statement.

Gas Supplies

The Russian Defense Ministry is considering suspending visits of international inspectors as part of strategic arms reductions treaty obligations, Interfax reported yesterday, citing an unidentified high-ranking military diplomat.

Any sanctions the EU imposes would be done progressively as the 28-nation bloc seeks a diplomatic solution with Russia, EU Trade Commissioner Karel De Gucht said during a visit to the U.S. “The longer it takes, the broader the sanctions will be,” he said in a phone interview, without providing details.

Russia also turned up the economic pressure on the Kiev government by signaling that natural gas supplies may be cut because Ukraine’s unpaid gas bills have reached $1.9 billion. OAO Gazprom (OGZD) halted supplies to Ukraine five years ago amid a pricing and debt dispute, curbing flows to Europe.

Eni SpA Chief Executive Officer Paolo Scaroni said he doesn’t think the Ukraine crisis will affect gas supplies this year, thanks partly to mild weather in Europe, according to an interview with Italian daily La Stampa.

Aid Package

To steady Ukraine’s finances, the EU plans to provide an 11 billion-euro ($15.3 billion) aid package and is prepared to drop tariffs on about 85 percent of the bloc’s imports of Ukrainian goods, according to De Gucht.

The Republican-led U.S. House of Representatives passed a bill on March 6 to allow $1 billion in loan guarantees for Ukraine sought by Obama’s administration. Senate Foreign Relations Committee Chairman Bob Menendez, a New Jersey Democrat, is working with committee Republicans on a package of aid for Ukraine and sanctions against Russia. The panel is scheduled to vote on the legislation, which hasn’t yet been made public, on March 11.

Ukraine wants as much as $15 billion from the International Monetary Fund.

Article ©2014 Bloomberg L.P. All Rights Reserved. Article also appeared at http://www.bloomberg.com/news/2014-03-09/crimea-takeover-builds-to-expose-ukraine-escalation-risk.html

Map of Ukraine, Including Crimea, and Neighbors, Including Russia

Comment