June 5 (Bloomberg) -- President Barack Obama said the U.S. and its allies are in “lockstep” agreement on keeping up pressure on Russia over the crisis in Ukraine and the threat of broader economic sanctions hasn’t receded.
Obama, at a news conference in Brussels with U.K. Prime Minister David Cameron, also said the tensions with Russia highlight the need for the U.S. to work with European nations on energy security, so that Russia isn’t able to use its vast oil and gas reserves as a weapon.
Ukraine and energy “dominated our discussion over the last two days,” Obama said.
Obama and Cameron held a separate meeting today following last night’s discussion among the Group of Seven leaders about Ukraine and the need to convince Russian President Vladimir Putin to de-escalate the crisis.
Putin was excluded from the gathering of leaders from the world’s leading developed countries, which was originally scheduled to be held in Sochi, in attempt to punish him for Russia’s stoking of unrest in Ukraine.
Russia’s seizure of Crimea and menace to eastern Ukraine led the U.S. and the European Union to impose asset freezes and travel bans on 98 people and 20 companies, while stopping short of broader curbs on investment and trade that might also damage their economies.
G-7 leaders spared Russia more stringent economic sanctions, giving Putin’s government another chance to cut off support to pro-Moscow rebels seeking to break up Ukraine.
Obama said the Russian economy “is even weaker because of the choices made by Russia’s leadership,” Obama said. “Sectoral sanctions would be broader, more significant.”
The turmoil over Ukraine has exacerbated capital flight from Russia. As the ruble has declined, runaway inflation has forced Russian policy makers to raise interest rates twice since March even with the economy on the brink of recession.
“The Russian economy is not in good shape right now,” he said. Capital flight from the country “could easily worsen.”
Obama travels to France later today ahead of tomorrow’s gathering of world leaders in Normandy for the 70th anniversary of the D-Day invasion in World War II that paved the way for an allied victory.
It remained unclear whether Obama and Putin will meet one on one or simply interact in a group setting over a lunch in Normandy tomorrow that both men are scheduled to attend.
“Should we have the opportunity to talk” Obama said, he will deliver consistent message. “Russia has a legitimate interest in what happens in Ukraine” while “it is up to the people of Ukraine to make their own decisions.” He said he would repeat his position that Russia’s annexation of Crimea is illegal.
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