Does Russia Really Gain From Incorporating Crimea?

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March 6 (Bloomberg) -- Bloomberg's Ryan Chilcote and Barclays' Helima Croft discuss the latest on the crisis in Ukraine. They speak on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Business as usual, with the exception of independence square which is very much a shrine to the people killed there.

Still a pretty chaotic situation.

In the east, yesterday, there were clashes between pro-ukrainian and pro-russian demonstrators.

That is all over now and the ukrainian flag is flying.

Down in crimea, the trouble continues.

The crimean parliament just voted to secede from ukraine and join russia.

That vote that goes to a referendum in 10 days.

They are saying they want to secede.

Meanwhile, the federal government, because crimea is part of ukraine, has said we are disbanding you as a parliament and annulling that decision which they called a farce.

In romeo, you've got several thousand troops.

They are not feeling the sigourney a and support the idea of this happening and you have the russian navy blocking access to the area.

They actually sank a vessel to prevent other ships from getting in and out.

A very fluid situation in ukraine.

How do you try to quantify the risk of a semi autonomous region saying it wants to secede and then the federal government in kiev saying you can't do that ? i am looking for the sanctions risk.

Right now, the sanctions are pretty moderate -- asset freezes on select individuals and visa bans.

Where not talking about the scale of sanctions we have in iran.

If we have the secession vote go forward, is the european union going to ratchet up sanctions?

That would matter significantly for russia.

But you have crimean's who in theory are ukrainians at this point, who are saying we want to be separate and go to russia.

60% of them are ethnically russian, so there is some legitimacy there.

What putin is saying is ukraine had a radically elective president who was pushed out, so they are calling this hypocrisy.

But it's hard to get an off ramp.

If this vote goes forward and you are sitting in the position that this is illegal and illegitimate, how are you going to get an off ramp with this crisis?

What is interesting to me is the writing tends to be a little more pro-russian.

I'm referring to the "financial times" article today that said putin has been trying to bring together most of the countries of the former soviet union in an economic alliance.

The west has done more or less everything it could do to prevent this.

That leads me to believe he is just offending his money.

They invested a lot in the ukraine.

Is it really about sovereignty or is it about cash?

This is an interesting question because a lot of russian experts were confused.

He does not need to occupy crimea to exert sovereignty.

If you look at the ukrainian elections, crimea, the key source of votes if they want to influence the overall outcome in the ukraine, they have support in eastern ukraine.

If crimea secedes, it will be harder for russia to have influence in the broader election in may.

It's not at all obvious what russia gains by having crimea formally incorporated as a state.

I'm interested to get your take, ryan.

Historically, russia has done things like this before, and mulled over, in georgia, they have established these little states with support of the local government.

It is an arguable point because there are armed men in the area.

To what extent will this be a democratic vote?

There will not be any international observers.

But i agree -- president putin does not need to annex the territory.

It's just a useful tool, a foothold in the region.

President putin said the greatest tragedy of the 20th century was the dissolution of the soviet union.

I don't think you so crazy that he thinks he can reestablish it, but he would like to say to the west, and this is part of what's happening here, that this is our backyard and you need to take our interest into consideration.

If you go back to when the ukrainian president was ousted -- the russians keep talking about this.

Poland came in, france and germany sent foreign ministers and brokered a deal with the then president and the opposition.

According to that deal, the president was supposed to stick around until may.

That's funny the early election was going to be.

He basically fled that same day in the opposition said we are going to have those elections in may.

The russians were not hearty to that deal, so they are trying to say to the west that you did not consider our interests when that happened and this is our biggest neighbor.

25 years ago, these people were all part of the same country and feel very close.

We have only about one minute left.

The relationship between the now leader of the ukraine and vladimir putin of russia -- can you characterize that?

Are they even talking?

Nonexistent.

They don't talk.

For one reason, he's the prime minister, so it's a formal thing.

Looks like we lost ryan's shot there.

I would love to end here -- if the u.s. could export national gas and -- natural gas and oil, that would put some pressure on russia.

People keep talking about this as a way to put pressure on them.

We can't do this quickly.

As you point out, it's not up and running.

We have been talking about 2017 before we get exports.

It's well and good to talk about increasing exports, but we cannot do it in a timely fashion.

It is not a silver bullet.

And we have only pledged one billion of the $35 billion the ukraine needs.

Is putin shaking in his boots?

No.

and he can live with that higher oil.

Thank you so much for your time.

This text has been automatically generated. It may not be 100% accurate.

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