Feb. 19 (Bloomberg) -- Two 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.
Secretary of State John Kerry indicated the U.S. is preparing to follow the EU in weighing 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.
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.
Late today, the U.S. took a first step in response to the crackdown by barring about 20 Ukrainian government officials from obtaining U.S. visas because of connections to human-rights abuses, according to a State Department official who briefed reporters under rules requiring anonymity. While U.S. law prohibits disclosing the names, they represent the full civilian chain of command responsible for ordering this week’s crackdown, the official said.
Roman Popadiuk, who was the first U.S. ambassador to Ukraine following its 1991 independence from the Soviet Union, said such restrictions put pressure on Ukrainian officials to “become a little more appropriate” in their actions. Last month, the U.S. revoked visas held by several Ukrainians allegedly linked to attacks on anti-government protesters late last year.
Beyond sanctions, Popadiuk, a principal at Bingham Consulting LLC in Washington, said the U.S. could take the lead in developing an international financial assistance package to free Ukraine, which is dependent on Russian natural gas and financing, from Moscow’s economic leverage.
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. 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.
The EU and the U.S. share a broad geopolitical concern that Russian President Vladimir Putin is seeking to lock Ukraine in Russia’s orbit even as many Ukrainians aspire to expand ties with the EU. The anti-government protests were sparked by Yanukovych’s November decision to back out of a pending free-trade pact with the EU in favor of ties with Russia, which offered $15 billion of aid and cheaper natural gas.
EU officials were “shell shocked” by Yanukovych’s reversal and their policy drifted, which is what explains Nuland’s widely cited expletive, said Damon Wilson, executive vice president of the Atlantic Council, a research group in Washington.
Events this week in the streets of Kiev have brought a “stiffening of the spine” in the EU, and coordinated EU-U.S. measures “seem to be falling into line,” said Wilson, who was senior director for European affairs at the National Security Council from 2007 to 2009.
“Frankly, I think sanctions are long overdue from both Brussels and Washington,” he said in a phone interview.
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.’”
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 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.
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