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| Ousted by G-8, Russia determined to prove it can thrive without the West | Ousted by G-8, Russia determined to prove it can thrive without the West |
| (about 3 hours later) | |
| MOSCOW — Brushing aside Western sanctions and its suspension from the Group of Eight nations, Russia is projecting an upbeat mood with plans to modernize and reinforce its Black Sea naval fleet and create its own domestic payment system to substitute for international credit cards. | |
| The moves reflect a generally sunny official response to Russia’s increasing isolation since it annexed Crimea, as if the lines are now clear and Russia has a chance to prove that it can go it alone, buck Western economic sanctions and build up Crimea as well. | |
| The fleet in Sevastopol, Crimea’s main port, languished during the years when it shared a base with the Ukrainian navy. But now that Russia has full control of Crimea, navy officials said they will move to significantly upgrade the force, the Vedemosti newspaper reported Tuesday. | |
| New submarines, aircraft and a motorized infantry brigade will be introduced, the paper said, with the size of the contingent rising from 25,000 to as many as 40,000 personnel. The investment over several years could total about $3 billion. | |
| The Russian Defense Ministry said Tuesday that 40 new warships and support vessels will be joining the navy’s five fleets this year. | |
| Along with pouring defense funds into the area, Russia has announced plans to boost local pensions and consider tax incentives for the region. | |
| And, in a move to spare Russians some of the effects of Western sanctions, the government may try to wean them from the global credit-card system. Last week MasterCard and Visa suspended transactions at several Russian banks after American financial sanctions were announced. The suspension has not caused significant disruption so far, but it has revived plans for a strictly Russian system for making payments. | |
| It could involve a domestic system for handling transactions on the leading credit cards — or a new card system altogether. | |
| Through the first few weeks of sanctions, the Russian economy has not buckled. Neither the ruble nor the stock market has declined since a sharp drop in February during the critical weeks of protests in the Ukrainian capital, Kiev, that resulting in the ouster of pro-Russian president Viktor Yanukovych. | |
| Yet there are unmistakable signs of trouble ahead. Though the economy grew by 0.1 percent in January and 0.3 percent in February, those meager gains are expected to be wiped out by the end of March, the deputy economic development minister, Andrei Klepach, said Monday. | |
| Capital flight may reach $70 billion this quarter, he said, more than all of last year. | |
| And the real effect of sanctions could take years to become clear, Michael McFaul, the recently departed U.S. ambassador to Russia, said Monday. And Washington is prepared to be patient, he said. | |
| “Sanctions never work when measured in terms of days and weeks and months,” McFaul said. “It doesn’t happen overnight. If you’re on that sanctions list, you’re going to be there a long, long time.” | |
| At a meeting in The Hague on Monday night, Russia rallied support among the BRICS countries — a group of developing nations that includes Brazil, Russia, India, China and South Africa — with a denunciation of sanctions. | |
| Russia said it expects to participate in the next meeting of the Group of 20 summit, in Australia in November, despite warnings that it may not be welcome. | |
| The Australian foreign minister, Julie Bishop, raised the possibility that Russian President Vladimir Putin might be barred from the summit. Australia has joined other Western nations in placing economic sanctions on dozens of Russian leaders. | |
| The BRICS statement argued that the host nation of a G-20 summit does not have the right to deny or suspend access to other members. | |
| Putin’s spokesman, Dmitry Peskov, said Tuesday that Russia has received no word regarding upcoming trips to Group of Seven countries by the Russian leadership — including a scheduled meeting in Germany in April and a D-Day commemoration in France in June, to which Putin has been invited. | |
| In Kiev, where the new interim government of Ukraine is still trying to get its bearings while dealing with Russian pressure and an acute economic crunch, the acting defense minister was fired and replaced by Gen. Mykhaylo Koval, who previously served with the border guards in Crimea and was briefly kidnapped there earlier this month. | |
| His predecessor, Ihor Tenyukh, submitted his resignation Tuesday to the parliament, or Verkhovna Rada, after he was accused of failing to give timely orders to Ukrainian military units in Crimea. | |
| Ukraine’s interim interior minister, Arsen Avakov, warned that the first “sprouts” of corruption had already appeared in the new government and said his ministry is determined to uproot them. Ukrainian corruption has been on a gigantic scale for years, and helps to account for the reluctance of Western nations to pour aid into the country. | |
| Elsewhere, in the city of Rivne, the stormy leader of the Right Sector movement, wanted by Russian authorities for his role in the first Chechen war of 1994-95, was shot to death. There were differing accounts of the incident, but the Ukrainian Interior Ministry said that Oleksandr Muzychko, known as Sashko Biliy, had died in the city of Rivne, in western Ukraine, while fighting with Ukrainian police. | |
| He had recently denounced interim Prime Minister Arseniy Yatsenyuk and physically attacked a local prosecutor at a public meeting while clutching an automatic weapon. The Russian criminal case against him was opened only on March 7, though it deals with an accusation that he tortured and killed Russian soldiers nearly 20 years ago. | |
| Russian authorities have loudly called upon the new Ukrainian leadership to rein in the right-wing nationalists who helped lead the overthrow of the previous government, and Muzychko’s death could be seen as a step in that direction. | |
| The decision by the world’s major industrial nations on Monday to effectively suspend Russia indefinitely from the G-8 came amid warnings that they would impose stronger economic sanctions against Moscow if Putin expands his military intervention in Ukraine. | |
| The decision followed a push by President Obama for a united stand by wealthy nations against what he has called Russia’s violation of international law with the annexation of Crimea this month. Obama and the leaders of six allied nations — Canada, France, Germany, Italy, Japan and Britain — agreed Monday to boycott a planned G-8 summit meeting in Sochi, Russia, in June, isolating Putin. Instead, they said they would convene as the Group of Seven in Brussels during the same time frame. | |
| “As long as it is flagrantly violating international law and the order the G-7 has helped build since the end of the Cold War, there is no reason to engage with Russia,” said Ben Rhodes, Obama’s deputy national security adviser for strategic communications. “What Russia has done has been a violation of that entire international order built up over many decades.” | “As long as it is flagrantly violating international law and the order the G-7 has helped build since the end of the Cold War, there is no reason to engage with Russia,” said Ben Rhodes, Obama’s deputy national security adviser for strategic communications. “What Russia has done has been a violation of that entire international order built up over many decades.” |
| But Russia dismissed the move as unimportant. Russian Foreign Minister Sergei Lavrov, who represented Putin at the Nuclear Security Summit at The Hague, told reporters that “if our Western partners believe the format has exhausted itself, we don’t cling to this format.” | |
| “We don’t believe it will be a big problem if it doesn’t convene,” Lavrov said. “The G-8 is an informal club. No one hands out membership cards, and no one can be kicked out of it.” | “We don’t believe it will be a big problem if it doesn’t convene,” Lavrov said. “The G-8 is an informal club. No one hands out membership cards, and no one can be kicked out of it.” |
| Statement of allied leaders | Statement of allied leaders |
| In a joint statement issued after their meeting Monday, the allied leaders condemned as “illegal” a March 16 Crimean referendum in which residents of the pro-Russian region voted overwhelmingly in favor of joining the Russian Federation. “We also strongly condemn Russia’s illegal attempt to annex Crimea in contravention of international law and specific international obligations,” the statement said. “We do not recognize either.” | In a joint statement issued after their meeting Monday, the allied leaders condemned as “illegal” a March 16 Crimean referendum in which residents of the pro-Russian region voted overwhelmingly in favor of joining the Russian Federation. “We also strongly condemn Russia’s illegal attempt to annex Crimea in contravention of international law and specific international obligations,” the statement said. “We do not recognize either.” |
| Calling Russia’s actions “a serious challenge to the rule of law around the world,” the seven leaders agreed: “Under these circumstances, we will not participate in the planned Sochi Summit. We will suspend our participation in the G-8 until Russia changes course and the environment comes back to where the G-8 is able to have a meaningful discussion.” | Calling Russia’s actions “a serious challenge to the rule of law around the world,” the seven leaders agreed: “Under these circumstances, we will not participate in the planned Sochi Summit. We will suspend our participation in the G-8 until Russia changes course and the environment comes back to where the G-8 is able to have a meaningful discussion.” |
| They warned that they “remain ready to intensify actions . . . if Russia continues to escalate this situation.” | They warned that they “remain ready to intensify actions . . . if Russia continues to escalate this situation.” |
| The meeting on the sidelines of the Nuclear Security Summit was the first of several sessions that Obama is attending with European allies and others over how to persuade Putin, once interested in further integrating Russia into the global economy, to pull back forces from eastern Ukraine and begin a dialogue with the Kiev government to resolve the crisis in Crimea. | The meeting on the sidelines of the Nuclear Security Summit was the first of several sessions that Obama is attending with European allies and others over how to persuade Putin, once interested in further integrating Russia into the global economy, to pull back forces from eastern Ukraine and begin a dialogue with the Kiev government to resolve the crisis in Crimea. |
| But Obama’s three-country tour of Europe, where longtime concerns over Russia’s ambitions beyond Crimea are growing, began against the backdrop of Putin’s public defiance of Western sanctions and the warning of broader ones to come. | But Obama’s three-country tour of Europe, where longtime concerns over Russia’s ambitions beyond Crimea are growing, began against the backdrop of Putin’s public defiance of Western sanctions and the warning of broader ones to come. |
| On Monday, Ukrainian leaders ordered their forces to leave Crimea under threat from Russian troops, a move U.S. officials here said was a responsible one given the situation’s volatility. Russia’s military consolidation on the Black Sea peninsula follows Putin’s formal annexation of it, a move not recognized internationally. | On Monday, Ukrainian leaders ordered their forces to leave Crimea under threat from Russian troops, a move U.S. officials here said was a responsible one given the situation’s volatility. Russia’s military consolidation on the Black Sea peninsula follows Putin’s formal annexation of it, a move not recognized internationally. |
| With Crimea fully in Russian hands, each side has looked toward economic and diplomatic tools to pressure the other. | With Crimea fully in Russian hands, each side has looked toward economic and diplomatic tools to pressure the other. |
| In his talks here and with European Union officials Wednesday in Brussels, Obama is working to develop a package of economic and financial support for Ukraine’s new pro-Western government. | |
| A bipartisan proposal to provide more than $1 billion in aid to Ukraine survived a procedural vote in the U.S. Senate on Monday evening, setting it up for final passage this week. The proposed package would provide $1 billion in loan guarantees for Ukraine and impose sanctions on Russian and Ukrainian officials involved in starting the standoff between the two countries. | A bipartisan proposal to provide more than $1 billion in aid to Ukraine survived a procedural vote in the U.S. Senate on Monday evening, setting it up for final passage this week. The proposed package would provide $1 billion in loan guarantees for Ukraine and impose sanctions on Russian and Ukrainian officials involved in starting the standoff between the two countries. |
| U.S. officials accompanying Obama warned that any additional Russian moves into eastern Ukraine or Moldova’s separatist Transnistria region would represent “a dangerous escalation” of the crisis. | U.S. officials accompanying Obama warned that any additional Russian moves into eastern Ukraine or Moldova’s separatist Transnistria region would represent “a dangerous escalation” of the crisis. |
| Promoting sanctions | Promoting sanctions |
| Obama used the nuclear forum, which he inaugurated four years ago in Washington, to rally support for stronger sanctions against Russia in his bid to isolate the country economically and politically in response to its move into Ukraine. | Obama used the nuclear forum, which he inaugurated four years ago in Washington, to rally support for stronger sanctions against Russia in his bid to isolate the country economically and politically in response to its move into Ukraine. |
| European officials have worried about potential repercussions from Putin should they tighten sanctions in a way that targets specific segments of the Russian economy, including its energy and banking sectors. | European officials have worried about potential repercussions from Putin should they tighten sanctions in a way that targets specific segments of the Russian economy, including its energy and banking sectors. |
| Several European nations import more than 90 percent of their energy from Russia, which has used natural gas exports to apply political pressure in the past. | Several European nations import more than 90 percent of their energy from Russia, which has used natural gas exports to apply political pressure in the past. |
| Obama thinks that only extending sanctions beyond individuals close to the Russian leader can force talks toward a political solution in Crimea and dissuade Putin from moving deeper into Ukraine. | Obama thinks that only extending sanctions beyond individuals close to the Russian leader can force talks toward a political solution in Crimea and dissuade Putin from moving deeper into Ukraine. |
| “If Russia continues to escalate the situation, we need to be prepared to impose a greater cost,” he said in an interview with Dutch newspaper de Volkskrant ahead of the trip. | “If Russia continues to escalate the situation, we need to be prepared to impose a greater cost,” he said in an interview with Dutch newspaper de Volkskrant ahead of the trip. |
| Before his evening session with G-7 allies, Obama met with Chinese President Xi Jinping, who is attending the nuclear summit. China is the only veto-holding member of the U.N. Security Council to abstain from voting on a recent resolution condemning Putin’s annexation of Crimea. | Before his evening session with G-7 allies, Obama met with Chinese President Xi Jinping, who is attending the nuclear summit. China is the only veto-holding member of the U.N. Security Council to abstain from voting on a recent resolution condemning Putin’s annexation of Crimea. |
| U.S. officials said Obama made the case to Xi that he should remain neutral or support sanctions against Russia, given independence sentiments in Tibet and China’s interest in discouraging the kind of popular vote that took place in Crimea. | U.S. officials said Obama made the case to Xi that he should remain neutral or support sanctions against Russia, given independence sentiments in Tibet and China’s interest in discouraging the kind of popular vote that took place in Crimea. |
| “Russia cares about its standing in the world,” Rhodes said. “And it matters if traditional friends cannot express support for its actions.” | “Russia cares about its standing in the world,” Rhodes said. “And it matters if traditional friends cannot express support for its actions.” |
| Leaders of the G-7 convened here at the official residence of Dutch Prime Minister Mark Rutte, who then withdrew because he is not a member of the grouping. | Leaders of the G-7 convened here at the official residence of Dutch Prime Minister Mark Rutte, who then withdrew because he is not a member of the grouping. |
| The G-7, formed to coordinate policy among the world’s major free-market democracies, was expanded to include Russia in the late 1990s after the collapse of the Soviet Union and the start of market reforms. | The G-7, formed to coordinate policy among the world’s major free-market democracies, was expanded to include Russia in the late 1990s after the collapse of the Soviet Union and the start of market reforms. |
| Putin did not attend the nuclear summit, sending Lavrov in his place. Lavrov and Secretary of State John F. Kerry met for an hour Monday, and in one potentially hopeful sign, Lavrov also met with Deshchytsya, the Ukrainian foreign minister. | Putin did not attend the nuclear summit, sending Lavrov in his place. Lavrov and Secretary of State John F. Kerry met for an hour Monday, and in one potentially hopeful sign, Lavrov also met with Deshchytsya, the Ukrainian foreign minister. |
| Russian officials had refused to meet with officials of the new Ukrainian government, calling it illegitimate for taking power in what they call a coup. Whether the meeting could help de-escalate an increasingly dangerous situation was not immediately clear. | Russian officials had refused to meet with officials of the new Ukrainian government, calling it illegitimate for taking power in what they call a coup. Whether the meeting could help de-escalate an increasingly dangerous situation was not immediately clear. |
| Military moves | Military moves |
| On Monday, Ukrainian Interim President Oleksandr Turchynov said in the national parliament that he had told the Defense Ministry to issue withdrawal orders for any remaining military personnel in Crimea, where government installations have steadily fallen into Russian hands. | On Monday, Ukrainian Interim President Oleksandr Turchynov said in the national parliament that he had told the Defense Ministry to issue withdrawal orders for any remaining military personnel in Crimea, where government installations have steadily fallen into Russian hands. |
| Russian troops control the entire Ukrainian marine base at Feodosia, a Defense Ministry official said, and two senior commanders have been taken into custody. | Russian troops control the entire Ukrainian marine base at Feodosia, a Defense Ministry official said, and two senior commanders have been taken into custody. |
| Russian troops stormed the facility, home to a well-trained and armed force, in the early morning hours, firing automatic weapons and using stun grenades, said Vladislav Seleznyov, a Defense Ministry spokesman. Some of the Ukrainian marines had their hands bound, he said, and 80 to 100 had been gathered in one spot. | Russian troops stormed the facility, home to a well-trained and armed force, in the early morning hours, firing automatic weapons and using stun grenades, said Vladislav Seleznyov, a Defense Ministry spokesman. Some of the Ukrainian marines had their hands bound, he said, and 80 to 100 had been gathered in one spot. |
| Seleznyov said the Russians flew commander Dmitri Deliatizkii and his deputy, Rostilav Lomtev, off the base in a helicopter. Service members in Crimea said Monday afternoon that the orders had not yet reached them. | Seleznyov said the Russians flew commander Dmitri Deliatizkii and his deputy, Rostilav Lomtev, off the base in a helicopter. Service members in Crimea said Monday afternoon that the orders had not yet reached them. |
| The commander of a Ukrainian base in Belbek, Yuli Mamchur, has been held by Russians since his base was stormed Saturday. Ukrainian television has reported that he is thought to be held in a jail in the port city of Sevastopol. | The commander of a Ukrainian base in Belbek, Yuli Mamchur, has been held by Russians since his base was stormed Saturday. Ukrainian television has reported that he is thought to be held in a jail in the port city of Sevastopol. |
| “We are military people, and we act on orders,” Seleznyov said by telephone. “When we get orders, we will know where we go and what we’ll take with us.” | “We are military people, and we act on orders,” Seleznyov said by telephone. “When we get orders, we will know where we go and what we’ll take with us.” |
| Carol Morello in Simferopol, Crimea, and Karen DeYoung, William Branigin and Ed O’Keefe in Washington contributed to this report. Englund reported from Moscow. |