Two weeks weeks ago, Victoria Nuland, the top U.S. diplomat for Europe, apologized for using a profanity during an intercepted phone call as she criticized the European Union for not moving fast enough to address the crisis in Ukraine.
Now the U.S. is looking to the EU to take the lead in formulating a tough response after the standoff between President Viktor Yanukovych and anti-government protesters exploded into violence yesterday, stirring talk of a civil war.
U.S. Secretary of State John Kerry indicated the U.S. is preparing to follow the EU on moves involving economic sanctions in response to Yanukovych’s crackdown, which undercut Western efforts to encourage a political compromise in Kiev.
“We are talking about the possibility of sanctions or other steps with our friends in Europe and elsewhere in order to try to create the environment for compromise,” Kerry said today before a meeting in Paris with French Foreign Minister Laurent Fabius.
Taking the initiative, the German, French and Polish foreign ministers were to fly to Kiev today for talks with Yanukovych. Tomorrow, EU foreign ministers will meet in Brussels to weigh “all possible options,” including “restrictive measures against those responsible for repression,” EU foreign policy chief Catherine Ashton said in an e-mailed statement.
The sanctions being considered include freezing some Ukrainian officials’ assets in European banks and barring their travel to much of Europe, Lithuanian Foreign Minister Linas Linkevicius said in an interview yesterday in Washington.
Easing tensions at least temporarily, the government and the opposition agreed on a truce and to continue talks to stop the bloodshed, Yanukovych said today on his website after meeting opposition leaders.
Two-Way Trade
By one measure, the EU’s economic stake in Ukraine is more than 16 times that of the U.S. The EU reported that two-way trade with Ukraine in 2012, the most recent figures posted on the European Commission website, was 38.4 billion euros ($52.81 billion). U.S. trade with Ukraine that year totaled $3.29 billion, according to the U.S. Census Bureau.
The EU accounts for about a third of Ukraine’s external trade, with Russia the other large trade partner. Ukraine’s primary exports to the EU are iron, steel, mining products, agricultural products, and machinery. EU exports to Ukraine are dominated by machinery and transport equipment, chemicals, and manufactured goods.
The EU also is the major source of foreign direct investment in Ukraine -- although such investment has dropped by more than half in the three years of Yanukovych’s term, to $7 billion from $15 billion in 2008 and 2009, according to the state statistical office.
Biden’s Call
U.S. Vice President Joe Biden called Yanukovych yesterday to express “grave concern” over the violence and urge the government to exercise restraint.
Ian Bremmer, president of the New York-based research firm Eurasia Group, said he sees the Biden call as a sign that President Barack Obama isn’t deeply engaged on the Ukraine issue.
“If this was really important for Obama, considered a matter of A-Level importance to national security, Obama would be on the phone,” Bremmer said in a television interview on “Bloomberg Surveillance.” “The fact that it’s Biden sends a very clear message, which is, ‘This isn’t about American jobs, this isn’t something I’m going to hang my personal hat on.’”
The EU and the U.S., share a broader geopolitical concern that Russian President Vladimir Putin is seeking to pull Ukraine, a Soviet republic until 1991, back into Russia’s orbit after the government on Nov. 21 pulled away from a free-trade deal with the EU in favor of ties with Russia sweetened by Putin’s offer of $15 billion of aid and cheaper natural gas.
Military Force
Now, with Polish Prime Minister Donald Tusk saying, “we may be witnessing the first hour of a civil war,” Obama urged Yanukovych not to use military force to suppress the opposition.
“We hold the Ukrainian government primarily responsible in making sure it is dealing with peaceful protesters in an appropriate way,” Obama told reporters before a meeting with Mexican President Enrique Pena Nieto at a North American leaders summit in Toluca, Mexico. “That includes making sure the Ukrainian military does not step in to resolve issues that could be resolved by civilians.”
Obama’s warning came as Yanukovych replaced the country’s military commander and granted sweeping powers to the army and police after the western Lviv region declared independence from his government. The Russian-backed leader’s security service said today it’s undertaking a nationwide anti-terrorism operation to restore public order and protect state borders.
Privately, one European diplomat this week compared the situation to the anti-Soviet rebellion in Hungary in 1956 or the Prague Spring democratic movement in Czechoslovakia in 1968. There is little Western Europe or the U.S. could do if Yanukovych, with or without Russian help, orders the military and police to stamp out the protests, the official said, speaking on the condition of anonymity to be candid.
To contact the reporter on this story: Terry Atlas in Washington at tatlas@bloomberg.net
To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net
NEWS SOURCE:http://www.businessweek.com/
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