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Saturday May 30th, 2015 2:33AM

Russia's aggression to dominate Obama Europe trip

By Ken Stanford Reporter
WASHINGTON (AP) -- Pushing back against demands to supply arms to Ukraine, Obama administration officials said Friday that economic sanctions would remain the primary weapon as the U.S. and its European allies seek a diplomatic solution to Russia's aggression.

"Our interest is not in seeing this situation escalate and devolve into hot conflict," Obama National Security Adviser Susan Rice said. "Our interest is in a diplomatic resolution, de-escalation and, obviously, economic support for Ukraine, and to the extent that it continues to be necessary, further cost imposed on Russia for its actions."

President Barack Obama, traveling across the Atlantic next week, will seek a cohesive stance from European leaders unnerved by Russia's annexation of the Crimean Peninsula but cautious about the economic punishment the United States says it's willing to unleash if Moscow makes further expansionist moves.

The trip, scheduled long before Russia moved to annex the Crimean Peninsula away from Ukraine, had initially aimed to nurture international relationships as well as feature a high-profile audience with Pope Francis. But Russia's actions will now dominate Obama's visit as the president and U.S. allies seek to confront one of the most serious political crises in Europe since the Cold War.

Underscoring the gravity with which the United States and the West perceive Russia's intervention in Ukraine, Obama will meet with leaders of the Group of Seven leading economies on Monday to display a unified stance against Moscow.

"What will be clear for the entire world to see is that Russia is increasingly isolated, and that the United States is leading the international community in supporting the government of Ukraine and the people of Ukraine, and in imposing costs on Russia for its aggression against Ukraine," Rice said.

Secretary of State John Kerry will join Obama during his trip, which will include stops in The Hague, Netherlands; Rome; Vatican City; and Riyadh, Saudi Arabia. While in The Hague, Kerry will meet with Russian Foreign Minister Sergey Lavrov.

Obama this week ordered sanctions against nearly two dozen members of Putin's inner circle and a Russian bank and he signed an executive order that would allow the U.S. to sanction key Russian industries. U.S. officials said Russia's energy, financial services and metals and mining sectors are among the industries that could be targeted.

On Friday, the European Union announced its own new sanctions, aiming for a deputy prime minister, two presidential advisers and the speakers of both houses of parliament. It also stated that further steps by Russia to destabilize Ukraine would lead to unspecified economic consequences and asked its members to prepare possible targets.

In that sense, the EU actions and threats against Russia fall short of the U.S. efforts, illustrating the European nations' caution over matching the U.S. measures against a country that is so intertwined with their own economies as both a trading partner and energy supplier.

Sen. John McCain, R-Ariz., who recently returned from a trip to Ukraine, said the U.S. needs to provide financial aid to Ukraine, immediately send defensive weapons to the country, resume work on the missile defense system in Poland, develop a long-term plan to get energy to Europe and Ukraine and speak up for the people.

Critics also say Obama has not been swift enough in imposing sanctions.

"This incrementalist approach is failing, and it will continue to fail," said Andrew Kuchins, the director of the Russia program at the Center for Strategic and International Studies. "He's got to step outside of his comfort zone and seize the initiative, take measures that put Putin on the defensive."

Beyond presenting a joint front against Russia, Obama while in Europe will be sure to make an appeal for European political and economic assistance for Ukraine, which has been left reeling in the wake of the February street protests that upended the government and provided an opening for Russian President Vladimir Putin to seize Crimea.

Obama, however, will have to make that request empty-handed. Congress has yet to approve $1 billion in loan guarantees for Ukraine because of Republican objections over provisions to expand the lending authority of the International Monetary Fund.

On Tuesday, Obama will meet with NATO Secretary-General Anders Fogh Rasmussen, an opportunity to reassure Eastern European members of the alliance, including the Baltic states, which have become especially alarmed by Putin's moves.

Rice said the economic measures were already taking a toll on Russia.

"You can see that these measures have had at least an initial impact when you look at the markets, when you look at the currency, when you look at the ratings by the major ratings agencies which have downgraded Russia from stable to negative just in the last 24 hours that these steps are consequential," she said.

But Rice would not say under what circumstances Obama would advance to broader, harder- hitting sanctions on Russia's economic sector.

"We have not taken that decision; as the president said yesterday, that is not our preference," she said. "But if the situation escalates, that remains a tool at our disposal."
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