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The Battle for Ukraine

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EU Imposes Further Sanctions on Russia while World Awaits Obama Doctrine for Eastern Europe

May 13th 2014

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Catherine Ashton

The European Union has expanded its sanctions over Ukraine’s crisis after pro-Russian separatists in Donetsk and Luhansk declared independence from Ukraine and separatists in Donetsk asked Moscow to allow their self-declared “republic” to join the Russian Federation. The separatists’ appeal to Moscow was in a May 12 statement read out at a news conference by Denis Pushilin, a separatist leader in the self-declared "Donetsk People's Republic."

The move came a day after the Donetsk and Luhansk regions held so-called self-rule referendums. The self-styled separatist officials – some of whom are now being targeted by EU sanctions -- claimed a high voter turnout and an overwhelming support for independence in the May 11 votes.

They also said there will be no voting in Ukraine's May 25 presidential election in the regions.

EU foreign policy chief Catherine Ashton has suggested that any disruption of the May 25 election could trigger further sanctions.

There were no official international election monitors to observe the May 11 votes. Ukraine's government and Western nations have rejected the referendums.

The White House said the referendums are illegal. U.S. State Department spokeswoman Jen Psaki said the voting "was an attempt to create further division and disorder” in Ukraine.

In an opinion piece for the Moscow Times, David J. Kramer urged the Obama administration to take action. Kramer wrote: "U.S. strategy should shift to preventing Putin's next moves by imposing crippling sanctions against more Russian banks, energy firms and state-owned entities, as well as broader sectoral sanctions. It is a mistake to wait either for Putin to move Russian tanks across the Ukrainian border or for him to disrupt the May 25 election, as U.S. President Barack Obama and German Chancellor Angela Merkel said in their joint news conference May 2. The U. S. has set the bar too high. As a result, Putin has found other means short of full-scale invasion — for the time being, at least — to accomplish his goals."

Kramer referred to previous U.S. foreign policy towards Soviet Russia as a source of inspiration for President Obama. The U.S. never recognized the annexation by the Soviet Union of the Baltic Republics of Estonia, Latvia, and Lithuania. Wrote Kramer, "The U. S. must take a similarly principled stand on Crimea, even while currently focused on eastern and southern parts of the country."

EU President Herman Van Rompuy, on a visit to Kyiv on May 12, said the European Union also does not recognize the “so-called referendums” which he called "illegal, illegitimate, and not credible." He also said the EU was prepared to take "additional, far-reaching steps" if Russia failed to take steps that help resolve the conflict.

The Russian government said the results of the May 11 referendums should be "implemented in a civilized manner" and urged Ukrainian officials in Kyiv to engage in talks with the separatists. Ukraine's acting President Oleksandr Turchynov said on May 12 that the votes in Donetsk and Luhansk are a "farce" without any legal basis.

The office of Russian President Vladimir Putin stated "Moscow respects the expression of the people's will" in Donetsk and Luhansk. Russian Foreign Minister Sergei Lavrov said there was no further point in talks to resolve the Ukraine crisis without the involvement of separatist leaders.

Expanded List

The EU’s expanded sanctions target 13 more individuals as well as two Crimea-based companies. The total of individuals now under sanctions is sixty-one. These include individuals from Russia, eastern Ukraine, and Crimea who face EU travel bans and asset freezes. The lists includes officials involved in Russia’s annexation of Crimea -- such as Vyacheslav Volodin, first deputy chief of staff of Russian President Vladimir Putin; Vladimir Shamanov, commander of the Russian Airborne Troops; Vladimir Pligin, head of the Duma Constitutional Law Committee; and Pyotr Jarosh, acting head of the Federal Migration Service office for Crimea.

It also includes pro-Russian separatist leaders in eastern Ukraine -- such as Viacheslav Ponomaryov, the self-declared mayor of Slovyansk; Igor Mykolaiovych Bezler, head of a separatist militia in Donetsk; and Roman Lyahin, the head of the self-proclaimed “Central Election Commission of the Donetsk People's Republic.”

The two Crimea-based firms added to the growing EU sanctions list are PJSC Chernomorneftgaz and Feodosia. Both Ukrainian state firms were effectively confiscated by Crimea’s new self-appointed "authorities" after the region's annexation by Russia.

Public opinion

A new public opinion poll suggests that Ukrainians are not quite so keen on Russia as separatists in the country purport them to be. According to the poll, which was conducted by CNN, this is true in in the regions that border Russia and that voted overwhelmingly to declare independence from Ukraine. The refererndum is controversial because there were not independent international observers. The U.S. and European Union reject the legitimacy of the referendum.

The results of the poll indicates that Ukrainians may feel more loyal to Western Europe than to their gigantic Russian neighbor, while a clear majority are in favor of economic sanctions against Russia. The poll was conducted among 1,000 people in Ukraine over the last week. Two out of three (67%) people polled approve of economic sanctions against Russia, while one out of three (29%) disapproves. Those polled tend to see Russian President Vladimir Putin as dangerous but a strong leader, while they consider President Barack Obama friendly. More than half (56%) of those polled said they felt a stronger sense of loyalty to Europe than to Russia, while 19% said they felt more loyal to Russia. Twenty-two percent of those polled felt loyalty to neither, while three percent said they did not know. 

Market impact

Economic jitters caused by the uncertainty in Eastern Europe were evident on May 12. For example, crude oil futures rose as the EU applied sanctions and Moscow threatened to cut off Ukraine's supply of natural gas. Ukraine's gas-supplier, Gazprom - which is owned by Russia - stated that unless Kiev pre-pays for next month's natural gas deliveries by June 2, supplies will be disrupted or reduced. Seeing an advantage, Saudi Arabia said it would step into the breach and fulfill any potential petroleum shortage resulting from the current tensions. This appeared to reassure investors and thus capped gains in oil. Brent crude settled 52 cents higher in trading at $108.41 a barrel, while U.S. crude gained 60 cents to $100.59 a barrel. U.S. crude futures remain between $98 and $102 per barrel.

Potential relief for European oil consumers concerned about the sanctions on Russia may come, not only from increased Saudi Arabia supply, also from Libya. On May 12, officials in Libya announced that they planned to reopen oilfields and pipelines in the western region of the country that had been blockaded by protesters. This could mean an uptick in Libya's output of 500,000 barrels per day. This could mean a reduction in Europe's exposure and thus encourage oil-savvy diplomats to lower the bar for sanctions. 

Cutting Edge Contributor Martin Barillas also edits Speroforum.com

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