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Ukraine Reinforces Army Amid Outcry at Russia’s Crimea Grab

By Daryna Krasnolutska, Volodymyr Verbyany & Kateryna Choursina
March 02, 2014 4:16 PM EST 287 Comments
A woman holds a sign during a demonstration in front of the Russian Embassy in Kiev on March 1, 2014.
Photographer: Yury Kirnichny/AFP via Getty Images
A woman holds a sign during a demonstration in front of the Russian Embassy in Kiev on March 1, 2014.

Ukraine mobilized its army reserves and called for foreign observers in Crimea after Russia sparked international outcry by seizing control of the Black Sea region.

Hundreds of unidentified gunmen arrived outside a Crimean army base today even after Ukraine put its military on full combat alert and invited European Union and NATO observers to the country. Russian President Vladimir Putin yesterday got lawmakers to rubber-stamp troop deployments, a move that prompted U.S. President Barack Obama to protest his “clear violation” of Ukraine’s sovereignty in a 90-minute call. The U.S. warned today of possible sanctions against Russia.

“We urge President Putin to pull back his military forces,” Ukrainian Prime Minister Arseniy Yatsenyuk said today in a televised address. “If President Putin wants to be a president who started a war between two neighboring friendly nations, he can reach that within several inches. We are on the brink of disaster.”

Crimea, where Russian speakers comprise the majority, has become the focal point of Ukraine’s crisis after an uprising that triggered last month’s overthrow of President Viktor Yanukovych. EU and U.S. officials who’d been racing to secure billions of dollars of bailout cash for Ukraine’s new administration have been forced to switch their attention to averting a war as military movements destabilize the region.

Merkel Call

Putin agreed to create a group to begin dialogue on Ukraine, according to a German government statement after a phone call between the Russian leader and Chancellor Angela Merkel, who called Russian intervention in Crimea unacceptable.

Putin “accepted the chancellor’s proposal to set up immediately a fact-finding mission as well as a contact group, possible led by the OSCE, to begin a political dialogue,” Merkel’s deputy spokesman Georg Streiter said by e-mail.

While Russia keeps its Black Sea fleet at the Crimean port of Sevastopol, Yuriy Sergeyev, Ukraine’s ambassador to the United Nations, said the number of Russian soldiers in Crimea is increasing “every hour.” Ukraine’s defense minister said yesterday Russia has sent 6,000 more soldiers into Crimea in the last 24 hours, while recently named Crimean Premier Sergey Aksenov, who asked Russia for help, said Russian troops were guarding key buildings there, the Interfax news service said.

Gunmen arrived today outside Ukraine’s infantry base in Privolnoye in Crimea, continuing a pattern that’s seen companies of armed soldiers seize airports and key facilities across the region since Feb. 28.

Russian Plates

The convoy includes at least 13 troop vehicles each containing 30 soldiers and four armored vehicles with mounted machine guns, the Associated Press reported. The vehicles, which have Russian license plates, have surrounded the base and are blocking soldiers from entering or leaving, it said.

Ukraine told Russia yesterday that a military invasion would be an act of war, while Putin said Russia may take action if it sees unrest in other Russian-speaking regions. Putin has no reason to use force against Ukraine as Russians aren’t under threat, Ukraine’s acting President Oleksandr Turchynov said. Efforts to speak with Russia’s Foreign Ministry were ignored, Ukraine’s government said.

The yen and the dollar gained today after Putin’s threat to invade Ukraine, with haven assets such as Treasuries and gold set to climb while emerging-market currencies retreat.

Ruble, Hryvnia

Rising tensions helped weaken the ruble 0.6 percent against Bank Rossii’s target basket of dollars and euros last week, closing Feb. 27 at a record-low 42.0712. The hryvnia tumbled to a record 10.7 per dollar on Feb. 27.

Ukraine, a key east-west transit nation for Russian energy, needs $15 billion in the next 2 1/2 years from the International Monetary Fund to keep its economy afloat, Finance Minister Oleksandr Shlapak said yesterday.

The U.S., the U.K. and Canada are suspending preparations for a meeting of the Group of Eight industrial nations in Russia in June. Russia may lose its membership of the G-8, while the U.S. is considering imposing sanctions, Secretary of State John Kerry said today.

If Russia doesn’t “step back” from its military incursion, “there could even be, ultimately, asset freezes, visa bans” and disruption of trade, Kerry said on NBC’s “Meet the Press” program.

Obama Update

Obama received an update from his national security advisers on the situation in Ukraine and planned to make calls to U.S. allies, White House spokesman Josh Earnest said today.

The UN Security Council held an emergency session to discuss the events in Ukraine. Following a request from Poland, the North Atlantic Treaty Organization met today for consultations on a potential threat to its security. Russia’s actions threatens “peace and security in Europe,” NATO Secretary General Anders Fogh Rasmussen said in a statement.

Russia doesn’t want a war in Ukraine and the situation “can normalize” if government in Kiev “starts to resolve domestic problems in accordance with international law,” Deputy Foreign Minister Grigory Karasin told Russian state TV today. About 150,000 Ukrainians are trying to flee for Russia, he said.

Crimea was given to Ukraine by Russia in 1954 by then-Soviet leader Nikita Khrushchev. People who identified themselves as ethnic Russian comprise 59 percent of Crimea’s population of about 2 million, with 24 percent Ukrainian and 12 percent Tatar, according to 2001 census data. Russians make up 17 percent of Ukraine’s entire population of 45 million.

No ‘Interference’

In the port of Odessa, west of Crimea, about 10,000 people marched today to vent their anger at Putin, while about 100 cars belonging to pro-Russia demonstrators sought to block access to the city’s army base, Ukraine’s Espresso TV reported. About 200 pro-Russian supporters gathered in Simferopol, Crimea’s capital.

“Today, tens of thousands of people rallied in eastern and southern cities to show Ukraine is united and doesn’t need any interference from another country,” UDAR Party leader Vitali Klitschko told crowds in Kiev’s Independence Square, the center of the anti-government uprising that toppled Yanukovych.

Klitschko said the new government remains committed to signing an EU association agreement, whose rejection by Yanukovych sparked the street demonstrations in November. Russia opposes the accord. Protesters carried British, French and German flags and held banners with slogans including: “Putin -- hands off Ukraine!”

Anatoly Shibiko, a pensioner who joined the demonstrators, called the Russian leader “crazy” and accused him of trying to rebuild his nation’s empire. “He’s from the KGB and it proves a spy should never rule any country,” he said.

Border Closures?

Ukraine may close borders after Russian citizens traveled to pro-Russia meetings in Ukraine’s eastern regions, Unian reported, citing First Deputy Premier Vitaliy Yarema.

About 50 people were detained today in Moscow for public disturbances at unsanctioned anti-war rallies around the center of the capital, Interfax reported, citing an unidentified Moscow police press officer. A Kremlin-sanctioned march backing intervention in Ukraine drew 27,000 people, Interfax said, citing the police.

“Ukrainians are our brothers and it’s painful to see this state coup threaten them,” said Dmitry, a 28-year-old businessman who declined to give his last name. “Ukraine is now a prisoner of its political situation, and Russia has taken a stand to counter the west’s geopolitical games.”

Australian Prime Minister Tony Abbott said Russia should pull back, warning that the international community is unlikely to approve of its actions.

“People right around the world will be thinking right now: hands off the Ukraine,” he said today, according to an e-mailed transcript of an interview on Channel 10’s “The Bolt Report.” “This is not the kind of action of a friend and neighbor and really, Russia should back off.”

To contact the reporters on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net; Volodymyr Verbyany in Simferopol, Ukraine at vverbyany1@bloomberg.net; Kateryna Choursina in Kiev at kchoursina@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net; John Walcott at jwalcott9@bloomberg.net; James M. Gomez at jagomez@bloomberg.net

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