Russian Forces Gain in Ukraine as Separatist Vote Looms

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A Soviet Union flag during a rally to show support for pro-Russian authorities in the Ukrainian region of Crimea, in St. Petersburg on March 9, 2014. Close

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Photographer: Olga Maltseva/AFP via Getty Images

A Soviet Union flag during a rally to show support for pro-Russian authorities in the Ukrainian region of Crimea, in St. Petersburg on March 9, 2014.

Russian forces advanced in Ukraine’s Crimean peninsula, ignoring Western calls to halt a military takeover before the region’s separatist referendum.

Ukrainian Prime Minister Arseniy Yatsenyuk said yesterday he’d travel to Washington this week as Russian President Vladimir Putin defended Crimea’s local government, which may use the March 16 vote to leave Ukraine and join the country’s Soviet-era master. Russian troops detained Ukrainian border guards at a base a day after gunmen fired warning shots at international observers and barred them from Crimea.

Russia is wresting control of Crimea, home to its Black Sea Fleet, from Ukraine following last month’s ouster of the former Soviet republic’s Moscow-backed leader Viktor Yanukovych. The U.S. estimates Russia now has 20,000 troops confronting a smaller Ukrainian force there. Ukraine has stepped up its eastern border defenses in the worst standoff between Russia and the West since the Cold War.

More on the Crisis in Ukraine:

“There clearly are Russian troops in Crimea,” U.K. Foreign Secretary William Hague said yesterday 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.”

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Pro-Russian supporters hold a placard reading "Nobel Peace Prize to Putin" during a mass rally in the center of Sevastopol, Ukraine on March 8, 2014. Close

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Photographer: Viktor Drachev/AFP via Getty Images

Pro-Russian supporters hold a placard reading "Nobel Peace Prize to Putin" during a mass rally in the center of Sevastopol, Ukraine on March 8, 2014.

Russian Minefields

Putin spoke to German Chancellor Angela Merkel and British Prime Minister David Cameron by phone yesterday. He said Russia wanted a diplomatic solution and he’d discuss a proposal today with his foreign minister, Sergei Lavrov, to establish a contact group with European Union leaders and the U.S. to resolve the situation, a spokesman from Cameron’s office said yesterday.

At the same time, during the call with Merkel, Putin “underlined that the actions of the legitimate Crimean government are based on international law and are aimed at assuring the lawful interests of the population on the peninsula,” the Kremlin said in an e-mailed statement.

Merkel said the vote violates Ukraine’s constitution and she regrets a lack of progress in forming the contact group, government spokesman Steffen Seibert said yesterday by e-mail.

Merkel also discussed Ukraine by phone with Chinese President Xi Jinping, the Chinese Foreign Ministry said. Xi said the Ukraine situation is “highly sensitive” and that China is calling for dialog and negotiation to stop it from deteriorating, according to a website statement.

Russian Pledge

Lawmakers in Moscow have pledged to accept the results of Crimea’s referendum. Putin says he’s defending Ukraine’s ethnic Russians, who make up 59 percent of Crimea’s population. Ukraine’s government says they aren’t under threat.

Russian forces planted minefields in the Kherson region, north of Crimea on Ukraine’s mainland, and began to install border markers between the two regions, the Khersonskie Vesti news website reported yesterday. Ukraine’s border service said Russian forces now control 13 border bases as well as the ferry crossing across the Kerch Strait to Russia, preventing guards from inspecting trucks arriving in Crimea.

Authorities on the peninsula ordered an anti-aircraft regiment in the city of Yevpatoriya to lay down its arms or its base would be taken over, the Interfax news service reported.

Military Movements

Ukrainian border troops will leave Crimea only if “forced,” the head of the service, Pavlo Shysholin, told reporters yesterday in Kiev. The military moved groups of armored vehicles from its western Zhytomyr and Lviv regions toward the east and southeast, Russian television Rossiya 24 reported, citing local citizens. Moving Ukrainian troops to Crimea “hasn’t been and isn’t being envisaged,” acting Defense Minister Ihor Tenyukh told a government meeting.

Gunmen fired warning shots March 8 at observers from the Organization for Security and Cooperation in Europe, blocking them from entering Crimea, Tatyana Baeva, a spokeswoman, said by phone from Vienna. Russia should “strongly support” getting observers on the ground in Crimea, the U.S.’s ambassador to the OSCE, Daniel Baer, said in website statement dated yesterday.

U.S. Secretary of State John Kerry spoke with Lavrov, March 8. 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,” the U.S. State Department said in a statement.

‘No Comeback’

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, 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 March 7 by phone 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.”

U.S. President Barack Obama will meet Yatsenyuk March 12 and discuss possibilities for a peaceful resolution and how the international community can help Ukraine economically, according to a statement yesterday from the White House. Obama spoke by phone last week with leaders of EU states including France, the U.K., Germany, Italy and the Baltic former Soviet republics Latvia, Lithuania and Estonia, the White House said.

All of them “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. The U.S. and European allies will impose sanctions if there isn’t a quick resolution, Obama said at the White House on March 6.

Few Means

Former Defense Secretary Robert Gates, who served under Obama and Republican President George W. Bush, said the U.S. has few means to pressure Putin on Ukraine.

“There really aren’t any direct military options that we have,” Gates said yesterday on “Fox News Sunday.” The economic sanctions being discussed will not be “any deterrent for Putin,” he said, adding that Crimea will probably stay under Russian control.

Obama has urged Ukraine, a country of 45 million people, 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.

Economic Pressure

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. Ukraine faces a 37 percent increase in the price it pays for the fuel, Energy Minister Yuri Prodan told reporters yesterday.

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 EU Trade Commissioner Karel De Gucht. Ukraine wants as much as $15 billion from the International Monetary Fund.

To contact the reporters on this story: Volodymyr Verbyany in Kiev at vverbyany1@bloomberg.net; Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net; Stepan Kravchenko in Simferopol at skravchenko@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net Andrea Dudik

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