March 6 (Bloomberg) -- President Barack Obama said the U.S. and its allies will keep raising pressure on Russia to back down in Ukraine and held open the possibility of further sanctions if Vladimir Putin’s government doesn’t respond.
Obama spoke at the White House after his administration restricted visas for Ukrainian officials and others, including Russians, who it says are threatening Ukraine’s sovereignty. He also authorized financial sanctions, leaving the imposition of any restrictions until later.
“These decisions continue our efforts to impose a cost on Russia,” Obama said, adding that the actions were taken in close coordination with European allies.
He also said a proposed referendum pushed by separatist leaders in Russian-majority Crimea to return the Black Sea peninsula to Russia would violate the Ukrainian constitution as well as international law.
“We are well beyond the days when borders can be redrawn over the heads of democratic leaders,” Obama said.
The impact of U.S. actions depends on whether the European Union joins in. Leaders of the 28-nation bloc meeting in Brussels today halted trade and visa negotiations with Russia and prepared sanctions against selected Russian officials amid disagreements about how fast to move.
Depending on EU
“Economic pressure essentially depends on Europeans taking strong actions, because Europe receives nearly half of Russia’s exports, while the United States only takes 3 percent,” Anders Aslund, a senior fellow at the Peterson Institute for International Economics in Washington, said in an e-mailed statement. “London is Russia’s financial market.”
The standoff already is having an economic impact. The ruble slid 0.9 percent against the central bank’s dollar-euro basket by 9:52 p.m. in Moscow. Russia’s Micex Index dropped 1 percent, extending its decline this week to 7.4 percent. About $55 billion was erased from the value of the nation’s equities on March 3 after Russian lawmakers approved troop deployments to Ukraine.
In an earlier White House statement, the administration urged Russia “to resolve this crisis through direct and immediate dialogue with the government of Ukraine.” It also demanded an “immediate pullback of Russia’s military forces to their bases.”
Administration officials didn’t name any individuals targeted by the visa restrictions or as potential subjects for sanctions. Some visas have been pulled or soon will be, according to the officials, who briefed reporters on condition that they not be identified.
U.S. Representative Ileana Ros-Lehtinen, a Florida Republican, said at a House hearing that the administration’s steps toward sanctions “are moves in the right direction, but now we must name and shame these persons.”
House Speaker John Boehner, an Ohio Republican, supported the actions taken by the White House, saying they are a “first step” in dealing with a “national emergency.”
Hours after Obama spoke, the Republican-led House voted to allow about $1 billion in loan guarantees for Ukraine that had been sought by the administration. Senate leaders support the loan guarantees though the chamber hasn’t scheduled a vote on the issue.
Obama’s order authorizing sanctions puts in place a legal framework and raises the U.S. threat level against Russia and critics of Ukraine’s interim government if conditions don’t improve.
“This executive order is a flexible tool that will allow us to sanction those who were most directly involved in destabilizing Ukraine, including military intervention in Crimea,” Treasury Secretary Jacob J. Lew told the House Ways and Means Committee today.
The executive order comes a day after the U.S. announced increased participation in NATO’s air-policing mission on the Baltic peninsula in response to the crisis in Ukraine. The U.S. already suspended all military cooperation with Russia in reaction to the incursion into the Crimea region.
The administration officials said the actions were being used in an effort to isolate Russia. Should Russia choose to de-escalate the situation, U.S. officials would take that into account as decisions are made on further action, one of the administration officials said.
Obama, in the executive order issued this morning, authorized Lew to take any further steps needed to carry out the directive. Other sanctions could include the freezing of assets or blocking American companies or individuals from doing business with Russians or Ukrainians or others deemed a threat to Ukraine’s security.
At a hearing of the House Foreign Affairs Committee today, Eric Rubin, deputy assistant secretary in the State Department’s European bureau, said it would be essential to work swiftly to help relieve “the perilous economic pressure Ukraine finds itself in under Russian pressure” and because of mismanagement by former governments.
Beyond a $1 billion loan guarantee announced yesterday, he said the U.S. would provide “increased technical assistance and other forms of aid.”
To contact the reporter on this story: Roger Runningen in Washington at email@example.com