3 May 2014

Obama, Merkel say they favor tougher sanctions if Russia continues to destablize Ukraine

The White House (transcript): 3. May 2014
Obama, Merkel say they favor tougher sanctions if Russia continues to destablize Ukraine
Remarks on Ukraine crisis by President Obama and German Chancellor Merkel in Joint Press Conference

US President Barack Obama (R) speaks as German Chancellor Angela Merkel listens during a press conference at the Rose Garden of the White House following their meeting on May 2, 2014 in Washington, DC. Obama welcomed Merkel at the White House for discussions on the escalating crisis in Ukraine

12:07 P.M. EDT
PRESIDENT OBAMA:  Well, good morning, everybody.  It is always a great pleasure to welcome my friend Chancellor Merkel to the White House.  Germany is one of our strongest allies, and Angela is one of my closest partners.  And with her indulgence, I want to start by making two brief comments.
This morning, our work touched on the range of issues where the United States and Germany are vital partners.  We agreed to continue the close security cooperation -- including law enforcement, cyber, and intelligence -- that keeps our citizens safe.  We reaffirmed our strong commitment to completing the Transatlantic Trade and Investment Partnership -- T-TIP -- which is critical to supporting jobs and boosting exports in both the United States and in Europe.
We discussed energy security, including the importance of Europe diversifying its energy sources.  The United States has already approved licenses for natural gas exports, which will increase global supply and benefit partners like Europe.  And T-TIP would make it even easier to get licenses to export gas to Europe.
At our working lunch, we’ll review our negotiations with Iran and our shared determination to prevent Iran from acquiring a nuclear weapon.  We’ll discuss Syria, where we continue to support the moderate opposition and provide humanitarian relief to the Syrian people.  I look forward to briefing Angela on my trip to Asia, a region where both our nations can help ensure that all countries in the Asia Pacific adhere to international law and international norms.
Of course, most of our time was spent on the situation in Ukraine.  Angela, I want to thank you for being such a strong partner on this issue.  You’ve spoken out forcefully against Russia’s illegal actions in Ukraine.  And you’ve been a leader in the European Union, as well as an indispensable partner in the G7.  And your presence here today is a reminder that our nations stand united.
We are united in our determination to impose costs on Russia for its actions, including through coordinated sanctions.  We’re united in our unwavering Article 5 commitment to the security of our NATO allies, including German aircraft joining NATO patrols over the Baltics.  We’re united in our support for Ukraine, including the very important IMF program approved this week to help Ukraine stabilize and reform its economy.  And as Ukrainian forces move to restore order in eastern Ukraine, it is obvious to the world that these Russian-backed groups are not peaceful protestors.  They are heavily armed militants who are receiving significant support from Russia.  The Ukrainian government has the right and responsibility to uphold law and order within its territory, and Russia needs to use its influence over these paramilitary groups so they disarm and stop provoking violence. 
Let me say that we’re also united in our outrage over the appalling treatment of the OSCE observers who have been detained in eastern Ukraine.  Pro-Russian militants are still holding seven observers, including four Germans, as well as their Ukrainian escorts.  They’ve been paraded in front of the media and forced to make statements at the barrel of a gun.  It is disgraceful and it’s inexcusable.  Russia needs to work to secure their immediate release, and the international community is not going to be satisfied until Colonel Schneider and his fellow captives come home.
Finally, as both Angela and I have repeatedly said, we want to see a diplomatic resolution to the situation in Ukraine.  But we’ve also been clear that if the Russian leadership does not change course, it will face increasing costs as well as growing isolation -- diplomatic and economic.  Already, the ruble has fallen to near all-time lows, Russian stocks this year have dropped sharply, and Russia has slipped into recession.  Investors are fleeing, and it’s estimated that $100 billion in investment will exit Russia this year.  Russian companies are finding it harder to access the capital they need, and Russia’s credit rating has been downgraded to just above “junk” status.  In short, Russia’s actions in Ukraine are making an already weak Russian economy even weaker.
Moreover, if Russia continues on its current course, we have a range of tools at our disposal, including sanctions that would target certain sectors of the Russian economy.  And we’ve been consulting closely with our European and G7 partners, and we’re stepping up our planning.  Angela and I continued these consultations today.  The Russian leadership must know that if it continues to destabilize eastern Ukraine and disrupt this month’s presidential election, we will move quickly on additional steps, including further sanctions that will impose greater costs.  But that is a choice facing the Russian leadership. 
Our preference is a diplomatic resolution to this issue.  And the Ukrainian government has already shown itself more than willing to work through some of the issues that would ensure that the rights of all Ukrainians are respected, that you have a representative government.  They’ve shown themselves willing to discuss amendments to their constitution that devolve power to a local level.  They have gone through with their commitment to potentially provide amnesty for those who lay down arms and who are willing to abandon the buildings that they’ve occupied.  The Ukrainian government in Kyiv has followed through on the commitments that it made in Geneva.  We need Russians to do the same.   
So, Angela, I want to thank you again for being here and, as always, for your friendship and partnership.  These are challenging times.  Russia’s actions in Ukraine pose a direct challenge to the goal that brought Europe and the United States together for decades -- and that is a Europe that is whole, free and at peace.  Just as our predecessors stood united in pursuit of that vision, so will we. 
Chancellor Merkel.  
CHANCELLOR MERKEL:  (As interpreted.)  Well, thank you very much, Barack, for this gracious hospitality and this very warm welcome that you accorded to me.  And I’m very glad to be able to be back in Washington to have an opportunity to address all of these different issues with you. 
I think priority really is on the current issue of Ukraine and that looms very large on our agenda.  It showed how important the transatlantic partnership is also in today’s times.  And I think it’s a very good thing that all of those steps that we’ve taken so far, we’ve taken together.  And today, in our talk, we yet again underlined that we fully intend to go ahead as we did in the past.  What happened on Ukraine, what happened on the Crimean Peninsula?  Well, the post-war order has been put into question that rests on the acceptance of territorial integrity by all, and this is why it was so important for us to react in concord.
And what is at stake here is that people in Ukraine can act on the basis of self-determination and can determine themselves which road they wish to embark on into the future.  The 25th of May is a very crucial date in order to ensure that, and we will see to it that elections can take place.  The OSCE will play a central role in all of this.  We talked about this.  And together with the OSCE, we shall do everything we can in order to bring Russia -- that is, after all, a member of the OSCE -- to do the necessary steps so as the 25th of May bringing about some progress in stabilizing Ukraine. 
The 25th of May is not all that far away.  Should that not be possible to stabilize the situation, further sanctions will be unavoidable.  This is something that we don’t want.  We have made a diplomatic offer, an offer for a diplomatic solution.  So it’s very much up to the Russians which road we will embark on, but we are firmly resolved to continue to travel down that road.

Now, secondly, we addressed issues that have a bearing on the work of the intelligence services here.  Let me underline yet again for the German side -- we have always enjoyed a very close cooperation with our American partner on this front.  And anyone in political responsibility is more than aware, looking at the challenges of the modern world today, that obviously in fighting terrorism, the work of the intelligence services is not only important, it is indeed indispensable. 
I am firmly convinced that our cooperation in this area is a very helpful one, yet there are differences of opinion on what sort of balance to strike between the intensity of surveillance, of trying to protect the citizens against threats, and on the other hand, protecting individual privacy and individual freedom, and rights of personality.  And that will require further discussion between our two countries in order to overcome these differences of opinion. 
We have these discussions incidentally also on the European front.  We are talking about Safe Harbor agreement, for example, about a privacy protection agreement.  And I take back the message home that the U.S. is ready to do that, is ready to discuss this, although we may have differences of opinion on certain issues.
Thirdly, T-TIP, I think particularly in the overall context of further intensifying our trade relations, of global growth, but also in the context of diversification of our energy supply -- this is a very important issue.  It will be very important for us to bring the negotiations very quickly to a close on T-TIP.  We are firmly convinced that for the European Union, for Germany and for the United States, this offers a lot of opportunities for the future.  And it’s so important for us to bring this agreement to a successful conclusion.  There are a number of discussions, I know; a number of skeptical remarks.  People have doubts.  But these doubts, this skepticism can be overcome and it needs to be overcome.  Just look at the many partners all over the world that have bilateral trade agreements.  I mean, it’s simply necessary.  Looking at the intensity of a transatlantic partnership and the closeness of our partnership, for us to have this agreement, this transatlantic trade agreement, and we are fully at one on this one.
So we had very intensive talks and we are going to build on this over lunch.  Thank you very much, Barack, for giving me this opportunity and also thank you for your gracious hospitality.
PRESIDENT OBAMA:  I think we’re going to take two questions from the U.S. press and two questions from the German press.  We’ll start with Lesley Clark.
Q    Thank you, Mr. President.  With violence today in Ukraine, you’ve said today that Germany and the United States are united in efforts to deescalate.  But have you been able to reach any common ground with the Chancellor on sectoral sanctions, particularly the energy -- the Russian energy section -- sector?  What’s next if you’re unable to? 
And to Chancellor Merkel, reports in the U.S. press have suggested that you’ve said that you believed President Putin may not be in touch with reality.  Is that what you’ve said, is that what you believe?  And could you give us -- you talked to him earlier this week -- could you give us a little more insight into what he might be thinking?  And do you believe that he is a threat to Europe?  Thank you.
PRESIDENT OBAMA:  Obviously, every day we’re watching the events in eastern Ukraine and southern Ukraine with deep concern.  And I think that what you’ve seen over the course of the last several months in the midst of this crisis is remarkable unity between the United States and the European Union in the response. 
We have at the same time offered a diplomatic approach that could resolve this issue.  We have been unified in supporting the Ukrainian government in Kyiv -- both economically, diplomatically, and politically.  And we have said that we would apply costs and consequences to the Russians if they continued with their actions.  And that’s exactly what we’ve done.  And you saw just over the course of the last week additional sanctions applied both by the Europeans and the U.S.
The next step is going to be a broader-based sectoral sanctions regime.  And what we have said is, is that we want to continue to keep open the possibility of resolving the issue diplomatically.  But as Angela Merkel said, if, in fact, we see the disruptions and the destabilization continuing so severely that it impedes elections on May 25th, we will not have a choice but to move forward with additional, more severe sanctions.  And the consultations have been taking place over the course of the last several weeks about what exactly those would look like, and would apply to a range of sectors.  The goal is not to punish Russia; the goal is to give them an incentive to choose the better course, and that is to resolve these issues diplomatically.  And I think we are united on that front. 
Within Europe, within the EU, I'm sure there has to be extensive consultations.  You’ve got 28 countries and some are more vulnerable than others to potential Russian retaliation, and we have to take those into account.  Not every country is going to be in exactly the same place.  But what has been remarkable is the degree to which all countries agree that Russia has violated international law, violated territorial integrity and sovereignty of a country in Europe.  And I think there’s unanimity that there has to be consequences for that. 
How we structure these sectoral sanctions the experts have been working on, and we anticipate that if we have to use them, we can.  Our preference would be not to have to use them.  And I thank Chancellor Merkel’s leadership on this front.  She has been extraordinarily helpful not only in facilitating European unity, but she’s also been very important in helping to shape a possible diplomatic resolution and reaching out to the Russians to encourage them to take that door while it's still open.
Q    Do you feel confident you have German support on sectoral sanctions, particularly the energy sector?
PRESIDENT OBAMA:  You’ve got to keep in mind that when it comes to sectoral sanctions we're looking at a whole range of issues.  Energy flows from Russia to Europe -- those continued even in the midst of the Cold War, at the height of the Cold War.  So the idea that you're going to turn off the tap on all Russian oil or natural gas exports I think is unrealistic.  But there are a range of approaches that can be taken not only in the energy sector, but in the arms sector, the finance sector, in terms of lines of credit for trade -- all that have a significant impact on Russia.
I don't think it's appropriate for us to delve into the details at this stage because our hope is that we don't have to deploy them.  But what I can say is, is that our experts at the highest level, and not just bilaterally, but multilaterally through the European Commission and our diplomatic teams, have been working through all the possibilities, and we're confident that we will have a package that will further impact Russia’s growth and economy.  But again, our hope is that we shouldn’t have to use them.  We're not interested in punishing the Russian people.  We do think that Mr. Putin and his leadership circle are taking bad decisions and unnecessary decisions and he needs to be dissuaded from his current course.
CHANCELLOR MERKEL:  (As interpreted.)  It is, I think, obvious to all that there are very different assessments on what happens in Ukraine.  On the one hand, you have the United States and Europe -- we've always taken our decisions together -- and on the other hand, the Russian appreciation and appraisal of the situation.  I hope that Russia will live up better in the future to its responsibilities.  But we need to see deeds matching up their words. 
We don't have any release of the hostages of the OSCE, among them also four German hostages.  This is a very crucial step that needs to happen first.  We have not yet seen any implementation of the Geneva agreement by the Russian side.  The Ukrainian side has taken some steps in the right direction.  And the OSCE, too, is an organization to which we wish to accord a greater role so that they can prepare and pave the way for elections. 
And one word on sanctions.  I agree with the American President; they are not an end in itself, but combined with the offer that we want diplomatic solutions, it is a very necessary second component to show that we're serious -- we're serious about our principles.  And there is a broad base, a broad range of possibilities that are being prepared for in the European Union.  In Europe, we have taken a decision that should further destabilization happen, we will move to a third stage of sanctions. 
I would like to underline this is not necessarily what we want, but we are ready and prepared to go to such a step.  My main aim would be, first and foremost, to improve stabilization and to see to it that the elections can happen there.  We will work on this in the next few days, but we are also prepared to take further steps. 
What we are talking about here will be sectoral measures in the context of certain branches of industry.  The American President and I can only agree to this and said what is necessary as regards the dependency on gas, which is very strong in Europe, but we can also look ahead in the medium term what we can do in order to promote an energy union in the European Union, which we’re doing.  Looking at our dependencies in the next 10 to 15 years on Russian gas supplies, there are six countries right now in the EU that depend 100 percent on gas supplies.  We need to improve the reverse flow, as we call it.  We need to improve our grade of pipelines.  All of the countries need to share supplies.  And those are measures that we’re currently discussing in Europe.
We’re talking about short-term but also medium-term and long-term measures.  And then the free trade agreement, T-TIP, is also gaining more prominence in this respect.
Q    (As interpreted.)  Madam Chancellor, you said that time is of the essence and that it’s getting shorter, leading up to the 25th.  When would be the time when you would say a third phase -- moving to a third phase of sanctions is what you would promote?  And is a more energy-intensive initiative by the EU necessary, for example, on heads of state and government level?
And, President, can you understand the fact that also Mr. Putin needs to play a role in the solution, which is the position of the European Union, that also his arguments have to be weighed?  And after the Chancellor having made those several phone calls with Mr. Putin, do you think that the Chancellor also stands a chance to sort of work on this?
CHANCELLOR MERKEL:  Well, to answer the question, what about the next few days to come -- I think the meeting of foreign ministers of the EU on the 12th of May is going to play a very important role.  In this respect, one can sound out the possibilities there are in various directions.  We, from the German side, as we have agreed with our American friends, will do everything we can in order bring the OSCE into a situation, supported politically that is, to do what is necessary in order to bring matters forward in Ukraine. 
On the one hand, you have OSCE monitors for the elections, but also questions as regards a change of the constitution; reform towards further devolution or decentralization.  All of the different parts of the country obviously have to be at the same level as regards information on this, and the OSCE wants to do that.  We want to give them the necessary political backing.
When a certain point in time is there, it’s very difficult to predict.  I can only say that, for me, the elections on the 25th of May are crucial.  And should there be further attempts at destabilization, this will be getting more and more difficult.  But for now, I am working for elections to take place on that very date, and the heads of state and government are ready at any time should they be proved necessary to meet.
We’ve approved that over the past in other areas -- for example, the euro crisis.  And we will demonstrate this resolve yet again.  I am firmly convinced that the United States of America and the European Union need to act in concert here, and they have done so in the past and they are going to continue to do so.
PRESIDENT OBAMA:  I’ve said from the start that Russia has legitimate interests in terms of what happens next door in Ukraine.  Obviously there is a deep and complicated history between Russia and Ukraine, and so, of course, Mr. Putin’s views should be taken into account.  What can’t be taken into account is Mr. Putin’s suggestion, both through words and actions, that he has the right to violate the sovereignty of another country, to violate its territorial integrity, to dictate the economic policies or foreign policy of a sovereign country.  That’s not acceptable. 
Our view from the start has been that the Ukrainians should be able to make their own decisions.  And I’m very confident that if the Ukrainians are allowed to make their own decisions, then they will choose to have a good relationship with Russia as well as a good relationship with Europe; that they’ll want to trade with Russia and they’ll want to trade with Europe.  But what they cannot accept, understandably, is the notion that they are simply an appendage, an extension of Russia, and that the Kremlin has veto power over decisions made by a duly elected government in Kyiv. 
So if, in fact, Mr. Putin’s goal is to allow Ukrainians to make their own decisions, then he is free to offer up his opinions about what he would like the relationship to be between Ukraine and Russia.  And I suspect that there will be a whole lot of Ukrainian leaders who will take those views into consideration.  But it can’t be done at the barrel of a gun.  It can’t be done by sending masked gunmen to occupy buildings or to intimidate journalists. 
And one of the biggest concerns that we’ve seen is the Russian propaganda that has been blasted out nonstop suggesting somehow that the Ukrainian government is responsible for the problems in eastern Ukraine.  The Ukrainian government has shown remarkable restraint throughout this process.  The notion that this is some spontaneous uprising in eastern Ukraine is belied by all the evidence of well-organized, trained, armed militias with the capacity to shoot down helicopters.  Generally, local protestors don’t possess that capacity of surface-to-air missiles or whatever weapons were used to shoot down helicopters, tragically.
We’ve seen the attempts of OSCE monitors -- who were approved not just by Europe or the United States, but also by Russia -- being detained.  And somehow Russia is suggesting that Kyiv is responsible for that?  We’ve heard Mr. Putin say, well, Kyiv has to do a better job of reaching out to Eastern Europe -- or eastern Ukraine.  You’ve seen attempts by Kyiv in a very serious way to propose decentralization of power and to provide for local elections, and for them to offer amnesty to those who have already taken over these buildings.  None of that has been acknowledged by Mr. Putin or the various Russian mouthpieces that are out there. 
You’ve also seen suggestions or implications that somehow Americans are responsible for meddling inside Ukraine.  I have to say that our only interest is for Ukraine to be able to make its own decisions.  And the last thing we want is disorder and chaos in the center of Europe. 
So for the German audience who perhaps is tuning into Russian TV, I would just advise to stay focused on the facts and what’s happened on the ground.  A few weeks ago, Mr. Putin was still denying that the Russian military was even involved in Crimea.  Then, a few weeks later, he acknowledged, yeah, I guess that was our guys.  And so there just has not been the kind of honesty and credibility about the situation there, and a willingness to engage seriously in resolving these diplomatic issues. 
And our hope is, is that, in fact, Mr. Putin recognizes there’s a way for him to have good relations with Ukraine, good relations with Europe, good relations with the United States.  But it cannot be done through the kinds of intimidation and coercion that we’re seeing take place right now in eastern Europe [Ukraine].
PRESIDENT OBAMA:  Thank you very much, everybody.

END   
12:50 P.M. EDT

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