Russia Spurns U.S. Diplomacy Bid on Ukraine Crisis

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A Russian soldier stands guard near a Ukrainian navy ship in the harbor of the Ukrainian city of Sevastopol on March 5, 2014. Close

A Russian soldier stands guard near a Ukrainian navy ship in the harbor of the... Read More

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Photographer: Filippo Monteforte/AFP via Getty Images

A Russian soldier stands guard near a Ukrainian navy ship in the harbor of the Ukrainian city of Sevastopol on March 5, 2014.

Russia fended off U.S. efforts at diplomacy over Ukraine and defied pleas from the West to loosen its grip on the Crimea region, as the European Union promised 1.6 billion euros ($2.2 billion) in emergency aid to help the Ukrainian government avert a default.

Russia’s Foreign Minister Sergei Lavrov declined to meet with his Ukrainian counterpart in Paris, as urged by U.S. Secretary of State John Kerry. Lavrov and Kerry did meet in the French capital in their first face-to-face encounters since the Ukrainian president fled the country during a popular uprising last month.

Russia has accused the West of supporting a coup against the country’s former President Victor Yanukovych and rejected EU proposals to broker a settlement through talks including Russia and the acting Ukraine government.

“We are all concerned at what is happening there,” Lavrov told reporters after an evening meeting at the French Foreign Ministry with Kerry and European counterparts. “The discussions will continue, and that’s it.”

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Rebuffing Kerry’s efforts to persuade him to speak with acting Ukrainian Foreign Minister Andrii Deshchytsia, Lavrov said to reporters, “Who is it? I didn’t see anyone.”

While Kerry later told reporters that he had “zero expectation” that Lavrov and Deshchytsia would meet today, the Ukranian had stayed in Paris longer than planned in hopes of such a meeting.

‘Something Concrete’

“We renew our call for Russia to speak directly with the government of Ukraine,” to send troops back to their barracks and to ensure the safety of international monitors after a United Nations envoy was threatened, he said.

Kerry said his talks with Lavrov had yielded “something concrete to take back” and discuss with President Barack Obama. He didn’t elaborate.

A Snapshot of Ukraine's Past and Present

In Ukraine, pro-Kremlin protesters stormed a government building in the eastern city of Donetsk and a United Nations envoy was confronted by a group of unidentified men in Crimea.

A total of 35 unarmed military personnel from 18 countries were dispatched as observers to Ukraine by the Organization for Security and Cooperation in Europe, a 57-nation forum that includes Russia and the U.S. Russia isn’t taking part in the mission.

The Ukrainian border service, citing six instances of Russian troops attacking border guards, said it had set up checkpoints along roads into the Crimean peninsula and reinforced checks along the border with Russia.

UN Envoy

In Crimea, UN envoy Robert Serry “cut short” a fact-finding mission after unidentified armed men ordered him to leave Crimea immediately, the UN said in an e-mailed statement. About 10 to 15 men, some of them lightly armed and wearing military fatigues, stopped Serry as he was leaving naval headquarters in Crimea, UN Deputy Secretary-General Jan Eliasson told reporters today in a teleconference from Kiev.

The UN later said the Dutch diplomat took a late flight out of Simferopol, the capital of Crimea and will “shortly return to Kiev to continue his mission.”

Mykola Rudkovsky, an independent Ukrainian lawmaker who met the UN envoy at Simferopol airport prior to his departure, said Serry left for Istanbul and urged all parties to “try to find understanding to lower the temperature in Simferopol as soon as possible.”

“Otherwise, his opinion was that this could lead to the worst,” Rudkovsky told reporters at the airport.

Hryvnia Depreciated

As tensions on the ground ratcheted up, the Ukrainian hryvnia depreciated 2.7 percent to 9.35 per dollar from yesterday’s one-week high, data compiled by Bloomberg show.

The WIGUKR index of Ukrainian equities listed in Warsaw slumped 3.4 percent, while Ukraine’s dollar-denominated notes due in June weakened 1.5 percent to 93.79 cents on the dollar, lifting the yield to 36 percent.

U.S. Defense Secretary Chuck Hagel today said that the U.S. will increase its role in NATO’s air policing mission on the Baltic peninsula and increase joint training with the Polish Air Force in Poland. The Pentagon will send six additional F-15 fighters and a KC-135 refueling tanker to patrol the Baltic airspace, the Defense Department said in a statement.

The North Atlantic Treaty Organization kicked Russia out of a naval mission to escort a U.S. warship that will defuse Syria’s chemical weapons and halted day-to-day civilian and military contacts to protest the Kremlin’s military moves in Ukraine.

NATO Pressure

“Some pressure on our Russian partners will pave the way for political and diplomatic solutions, that’s what I hope,” NATO Secretary General Anders Fogh Rasmussen told reporters. He said contacts at the political and ambassadorial level would continue.

In Paris, foreign ministers gathering for an international conference on support for Lebanon were focused on Ukraine in the aftermath of Russia’s move to secure its Black Sea fleet, based in the Crimean port of Sevastopol.

Lavrov, who traveled to Paris from Madrid, earned a rebuke from the U.S., the U.K. and Ukraine governments after he failed to attend the meeting this morning that included his Ukrainian counterpart.

“What we’re really trying to do here today is to bring the Russians into the diplomatic process,” U.K. Foreign Secretary William Hague told reporters. “Unless you’re prepared to sit down with the Ukrainians, how do you find the de-escalation. You need to be talking to each other.”

Western Sanctions

Western officials are working to flesh out a combination of sanctions against Russia and financial incentives to enable Ukraine’s barely formed government to consolidate power over the economically crippled country of 45 million.

In Brussels, the European Commission, the EU’s executive arm, said its proposed emergency funding would be available once Ukraine strikes a loan agreement with the International Monetary Fund. The commission called for additional grants and project loans that could take the European contribution to more than 11 billion euros over seven years.

The European offer follows Kerry’s pledge of $1 billion in loan guarantees in Kiev yesterday. An IMF team is in Kiev to assess the country’s needs. On March 1, Finance Minister Oleksandr Shlapak said it will take $15 billion in the next 2 1/2 years to stay afloat.

Putin’s Comments

Russian President Vladimir Putin, speaking at a government meeting at his residence near Moscow, said he wanted to separate economic matters from politics in Ukraine. Russia should cooperate with all its partners and avoid an escalation, he said.

“No one should be placed in a difficult situation,” Putin said.

EU leaders including German Chancellor Angela Merkel and U.K. Prime Minister David Cameron will meet in Brussels tomorrow for an emergency summit on Ukraine that will discuss repercussions for Russia. Ukraine’s prime minister, Arseniy Yatsenyuk, is also due to attend the summit and meet NATO Secretary General Anders Fogh Rasmussen afterwards.

Yatsenyuk leads Ukraine’s “only legitimate government” and Poland is ready to back an EU accord with the country “with all its strength tomorrow,” Prime Minister Donald Tusk told lawmakers in Warsaw. The EU must conduct “tough, patient” talks with Russia to preserve peace and Ukraine’s sovereignty, Tusk said, predicting that “there will be no quick, easy end” to the standoff.

To contact the reporters on this story: Indira A.R. Lakshmanan in Paris at ilakshmanan@bloomberg.net; James G. Neuger in Brussels at jneuger@bloomberg.net

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net; John Walcott at jwalcott9@bloomberg.net

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