President Obama and German Chancellor Angela Merkel said Friday that broad new economic sanctions would be imposed on Russia if its threat to eastern Ukraine disrupts the country’s presidential election later this month.
The warning, delivered during a White House news conference, provided for the first time a specific threshold that Russia must not cross if it is to avoid further sanctions from Europe and the United States.
Those measures could include sanctions against Russia’s lifeblood energy sector, banking system and mining industries, moves that would hurt Europe primarily but also ripple through the U.S. economy.
For weeks, the Obama administration has declined to specify what, short of a Russian invasion of eastern Ukraine, would trigger the most severe sanctions to date in response to Russian President Vladimir Putin’s seizure of Crimea and support for pro-Russian militias in eastern Ukraine.
But both leaders expressed reluctance to carry out the threat, a reflection of the deep European uncertainty over the costs of doing so.
“The idea that you’re going to turn off the tap on all Russian oil or natural gas exports, I think, is unrealistic,” Obama said during the Rose Garden appearance. “But there are a range of, you know, approaches that can be taken not only in the energy sector but in the arms sector, the finance sector, in terms of lines of credit for trade, all that have a significant impact on Russia.”
Standing next to Obama, Merkel acknowledged that “further sanctions will be unavoidable” if Ukraine is unable to hold the May 25 presidential election, although she added that this is “something we do not want.”
But, she said, “we are firmly resolved to go down that road.”
The vote is expected to help resolve the nation’s constitutional crisis that began with President Viktor Yanukovych’s flight from Kiev, the Ukrainian capital, in February amid protests over the corruption and pro-Russian policies of his government.
The leaders met as the crisis in eastern Ukraine worsened, raising fears of Russian military action despite the threat of further U.S. and European economic sanctions.
The Ukrainian government launched its most aggressive push to date against pro-Russian groups occupying government buildings in several eastern towns. Two government helicopters were shot down, and Putin warned that the U.S.-brokered agreement reached last month in Geneva to reduce tensions had collapsed.
Putin has already seized and annexed Crimea, a move the Obama administration does not recognize but acknowledges it can do little about. Obama has sought to prevent Putin, who has about 40,000 Russian troops on the Ukraine border, from pushing into the former Soviet republic through the threat of sanctions against whole sectors of the Russian economy.
White House officials say such sanctions would have an adverse effect on the U.S. economy, although Germany and other European nations would feel the impact far more severely. How effective the threat of so-called sector sanctions is depends primarily on Europe’s willingness to impose them, a focus of Obama’s meeting with Merkel on Friday.
Obama said planning for sector sanctions has been “stepped up.” He also condemned as “disgraceful and inexcusable” the detention of monitors from the Organization for Security and Cooperation in Europe, including a German citizen, by a pro-Russian group in eastern Ukraine.
In recent weeks, Obama and Vice President Biden have traveled to Europe to reassure NATO allies that the United States would honor the pact’s collective defense commitment, known as Article 5, should Russia enter a member country. But Obama has also warned NATO member nations that, given Russia’s ambitions, each must also contribute fairly to the group’s defense, including more spending and new commitments of military resources.
Echoing that message, Defense Secretary Chuck Hagel said Friday that NATO members will be “judged harshly” if they do not increase defense spending in response to the new Russian threat.
“For decades — from the early days of the Cold War — American defense secretaries have called on European allies to ramp up their defense investment,” Hagel said in a speech at the Wilson Center.
One of the biggest obstacles, he said, has been a sense that the age of aggression in Europe was over. “Russia’s actions in Ukraine shatter that myth and usher in bracing new realities,” Hagel said.
Only a handful of NATO’s 28 members meet the agreed budget target of 2 percent of their gross domestic product.
“We must see renewed financial commitments from all NATO members,” Hagel said.
Obama and Merkel have had a tumultuous relationship, with each at times accusing the other of missteps, mostly over issues related to the world economic recovery.
Even in the early afterglow of Obama’s 2008 election, Merkel was unafraid to call on the popular new president to begin winding down stimulus spending long before others. Obama later urged Merkel to help bail out flagging euro-zone nations to revive Europe’s economy, then a drag on the U.S. recovery.
Last year, however, the two fell out after disclosures by Edward Snowden, a former contractor for the National Security Agency, that included a “head of state” collection program that monitored Merkel’s personal cellphone. Obama said he was unaware that Merkel, who was raised in the East German police state, was a target and announced later that it would no longer continue.
Obama said Friday he was “pained” that the disclosure had upset Merkel, calling her one of his “closest friends” among international leaders.
The two did not reach agreement on a deal to stop surveillance of each other’s governments — something Merkel had hoped to secure. At the news conference, she said the deal would continue to be discussed in the weeks ahead.
Karen DeYoung contributed to this report.