Bloomberg News
The U.S. appealed to Russian leaders to help arrange the release of international monitors taken hostage by rebels in eastern Ukraine, as Group of Seven leaders said additional economic sanctions on Russia will be imposed as soon tomorrow.
U.S. President Barack Obama today urged Russia to work with international observers 'rather than stand by while they're being bullied and in some cases detained,' after pro-Russian separatists seized a group of monitors on April 25. The inspectors and their Ukrainian guides are being held in the city of Slovyansk.
U.S. Secretary of State John Kerry, who discussed their capture with Russian Foreign Minister Sergei Lavrov yesterday, also continued to press the case by the U.S. and other members of the G-7 -- the world's largest industrial democracies -- that Russia is stoking the conflict in its former Soviet satellite. Kerry pushed for 'support without preconditions' to 'liberate' the observers, according to a State Department summary of their telephone conversation.
'These aren't heavy lifts, if the Russians are sincere in wanting to resolve this problem,' Obama said at a news conference in Putrajaya, outside Kuala Lumpur, today.
Putin's Warning
Russia last week renewed military exercises on its neighbor's border and President Vladimir Putin warned of 'consequences' after Ukraine killed five rebels in an offensive.
Russia says Ukrainian officials have run roughshod over the rights of Russian speakers in the country, a claim the Ukrainians deny. Russia already has annexed the Crimean peninsula from Ukraine.
'Russia's provocative troop movements on Ukraine's border, its support for separatists and its inflammatory rhetoric are undermining stability, security and unity in Ukraine,' Kerry told Lavrov, according to the State Department statement.
Lavrov told Kerry that Ukraine must halt military operations in its eastern regions that are aimed at the separatists, according to a statement published by the Russian ministry in Moscow.
Russia's state-run news service RIA published satellite photos late yesterday that it said showed Ukrainian forces massing near Slovyansk, citing an unidentified Russian Defense Ministry official. While the report's accuracy couldn't be verified, it is consistent with Russia's effort to depict the Ukrainian government as the aggressor and justify some use of force in the eastern parts of the country.
Economic Penalties
The additional economic penalties pending against Russia follow a conference call that Obama, who is traveling in Asia, conducted with European leaders April 25.
'We will move swiftly to impose additional sanctions on Russia,' the G-7 leaders said in a statement issued yesterday by the White House as Obama visited South Korea.
Russia has escalated tensions in Ukraine in part by its 'threatening' military maneuvers and 'taking no concrete steps' to help implement an agreement reached April 17 in Geneva aimed at calming the crisis, according to the statement by the G-7, comprised of the U.S., U.K., France, Germany, Italy, Canada and Japan.
As part of that accord, pro-Russian separatists were to lay down arms in eastern Ukraine, unblock seized government buildings and allow international observers in exchange for amnesty and the constitutional changes.
U.S. Sanctions
The U.S. sanctions may be unveiled tomorrow, according to a U.S. official who asked not to be identified discussing internal deliberations. The measures would be coordinated with allies, though penalties from each country wouldn't necessarily be identical, the official said.
'It's going to be more effective if everybody signs on and everybody's committed,' Obama said today. 'We're going to be in a stronger position to deter Mr. Putin when he sees that the world is unified and the United States and Europe is unified, rather than this is just a U.S.-Russia conflict.'
The sanctions may target individuals with influence in sectors of the Russian economy, such as energy and banking, White House Deputy National Security Adviser Ben Rhodes told reporters traveling with Obama. Those affected may include 'cronies' of Russian leaders, he said.
EU Representatives
Representatives of the European Union's 28 nations will meet tomorrow to widen a list of people subject to asset freezes and travel bans, an EU official said yesterday. The sanctions will target 15 Russians in positions of power, another diplomat said yesterday. Both asked not to be identified because of the sensitivity of the matter.
The sanctions previously imposed by the U.S, EU, Canada and other allies were aimed at a number of Putin's allies and top officials, as well as St Petersburg-based OAO Bank Rossiya.
In the wake of capital flight and a Russian credit-rating downgrade by Standard & Poor's, the country's central bank unexpectedly raised its key interest rate to 7.5 percent, from 7 percent, on April 25. All but one of 23 economists in a Bloomberg survey had forecast no change.
The ruble has lost almost 9 percent this year against the dollar, the second-worst performance among 24 emerging currencies tracked by Bloomberg after Argentina's peso.
Ukraine's Offensive
Against the backdrop of mounting pressure on Russia, Ukraine pressed an offensive around separatist-held Slovyansk. Its forces reinforced four checkpoints in an effort to blockade pro-Russian militants, the country's security service, known as the SBU, said on its website.
The militants in Slovyansk captured a bus carrying observers sent by member states of the Organization for Security and Cooperation in Europe, a 57-nation group including Russia and the U.S. that focuses on conflict prevention and preserving human rights, Ukraine's Interior Ministry said in a statement on its website. Thirteen people were being held hostage, it said.
The observers include four Germans and citizens of the Czech Republic, Denmark, Poland and Sweden, according to the Vienna-based organization. They were accompanied by Ukrainian military officers.
'Slovyansk's separatists do not want to release military monitors because they are afraid of being stormed and they are going to use the monitors as guarantee of their own safety,' Stanislav Rechynsky, an adviser to Ukraine's Interior Minister, said in a statement on the ministry's website.
Release Efforts
An OSCE monitoring mission that was deployed to Ukraine in March will take part in talks with the separatists over the release of their colleagues, Tatyana Baeva, the spokeswoman for the organization, said by phone from Vienna, without providing details.
'Diplomacy and other ministries are engaged in all possible actions leading to the release of the Polish citizen in close cooperation with foreign partners,' the Polish Foreign Affairs Ministry said yesterday in a statement on its website. 'Our common objective is the earliest possible release of the captured persons and the continuation by the OSCE of its activities to support a resolution of the crisis.'
Russia is 'undertaking measures' to resolve the situation, the Foreign Ministry in Moscow said in a statement. The Ukrainian government, which hosted the observers, bears full responsibility for their safety, the ministry said, adding that the authorities would have been expected to coordinate their visit to areas not under their control.
Vyacheslav Ponomaryov, the self-proclaimed pro-Russian 'people's mayor' of Slovyansk, said rebels stopped the bus because the OSCE mission was accompanied by Ukrainian officers. Activists found weapons and ammunition, news service Interfax cited him as saying.
Another separatist leader, Denis Pushilin, said they would not release the mission and accusing it of spying for NATO, according to Ukraine's private channel TV5.
Ukrainian Prime Minister Arseniy Yatsenyuk accused Russia of seeking to disrupt a May 25 presidential election, remove the pro-European government in Kiev and seize territory.
To contact the reporters on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net; Phil Mattingly in Washington at pmattingly@bloomberg.net; Nicole Gaouette in Washington at ngaouette@bloomberg.net
To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net; John Walcott at jwalcott9@bloomberg.net; Don Frederick at dfrederick1@bloomberg.net; Bernard Kohn at bkohn2@bloomberg.net Stanley James
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