Tag Archives: Crimea referendum

Latest news on Ukraine

US fighter jets, Troops to Poland & lithuania Over Ukraine Crisis

Jennifer Svan and John Vandiver report for Stars and Stripes that on March 10, 2014, Polish government officials said the U.S. military was sending 12 F-16 fighter jets and about 300 service members to their country in response to the situation in Ukraine.

It’s the second time in less than a week that the Pentagon has ordered combat planes and personnel to countries in Eastern Europe amid mounting tensions over Russia’s incursion into Ukraine’s Crimea Peninsula. On March 6, the U.S. Air Force sent six F-15C Eagles and more than 60 U.S. airmen from RAF Lakenheath, England, to Lithuania to bolster NATO’s air policing mission over the Baltics.

The Baltic nations and Poland had requested the deployments, officials said.

UN Assembly declares Crimea referendum invalid

On March 27, 2014, by a vote of 100 in favor to 11 against, with 58 abstentions, the 193-member UN Assembly declared that the March 16 referendum in Crimea that led to the peninsula’s annexation by Russia “has no validity” and that the parties should “pursue immediately a peaceful resolution of the situation.”

The UN calls on all States, international organizations and specialized agencies not to recognize any alteration of the status of the Autonomous Republic of Crimea and the city of Sevastopol on the basis of the 16 March referendum “and to refrain from any action or dealing that might be interpreted as recognizing any such altered status.”

Russia adds more troops along Ukraine border

Jim Garamone reports for the American Forces Press Service, March 27, 2014, that Pentagon Press Secretary Navy Rear Adm. John Kirby said during a news conference Russia is continuing to reinforce units along the eastern and southern Ukraine border.

Russian Defense Minister Sergei Shoigu had told Defense Secretary Chuck Hagel last week that the Russian troops were massing for regularly scheduled exercises. Kirby said “The minister said it was exercises, no intent to cross the border. They need to live up to that word.”

The AFP reports on March 27, 2014, that Andriy Parubiy, chairman of Ukraine’s national security council, said via a webcast from Kiev that nearly 100,000 Russian forces have massed on Ukraine’s border — a number far higher than US military estimates.

Parubiy said, “Almost 100,000 soldiers are stationed on the borders of Ukraine and in the direction … of Kharkiv, Donetsk. Russian troops are not in Crimea only, they are along all Ukrainian borders. They’re in the south, they’re in the east and in the north.”

CHINA WON’T TAKE SIDES

Harriet Torry reports for the Wall Street Journal, March 28, 2014, that Chinese President Xi Jinping said China had “no private interest in the Ukraine question,” dashing hopes in the West that Beijing could turn more critical of its Russian ally.

~StMA

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Russia retaliates against Obama sanctions: pulls billions from banks & U.S. treasury

Obama vs. PutinBarack Obama and Vladimir Putin at the Group of 8 conference in northern Ireland, June 2013

On March 6, 2014, Barack Obama signed an executive order, and made good on his threat to impose sanctions on Russia over the latter’s “invasion” of Ukraine’s Crimean peninsula.

Crimea is an autonomous republic of Ukraine and has a 1997 treaty agreement with Russia, whereby the Russian Navy is allowed to station planes, armored vehicles, artillery systems, and up to 25,000 troops on the peninsula.

In addition to declaring a U.S. “national emergency” due to the Ukraine crisis being an “extraordinary threat to the national security and foreign policy of the United States,” Obama’s executive order, “Blocking Property of Certain Persons Contributing to the Situation in Ukraine,” also “authorizes sanctions on individuals and entities responsible for violating the sovereignty and territorial integrity of Ukraine, or for stealing the assets of the Ukrainian people.” (The term “entity” means a “partnership, association, trust, joint venture, corporation, group, subgroup, or other organization.”)

Actions have consequences. It now appears Russia has retaliated by dumping U.S. treasury bonds (as promised) and withdrawing billions of dollars from western banks with operations in the United States.

Patrick Jenkins, Daniel Schäfer, Courtney Weaver, and Jack Farchy report for the Finance Times, March 14, 2014, that Russian companies are pulling billions out of western banks, fearful that any US sanctions over the Crimean crisis could lead to an asset freeze, according to bankers in Moscow.

Sberbank and VTB, Russia’s giant partly state-owned banks, as well as industrial companies, such as energy group Lukoil, are among those repatriating cash from western lenders with operations in the US. VTB has also cancelled a planned US investor summit next month.

The capital flight comes as last-ditch diplomatic talks between Russia’s foreign minister and the US secretary of state to resolve the tensions in Ukraine ended without an agreement.

Data published by the Federal Reserve Bank of New York sparked speculation that the Russian central bank was also reducing its vulnerability to potential sanctions. The data showed a drop of $105bn in Treasuries held by foreign institutions for the week ending March 12.

“We can only speculate about who might have decided to move their securities out of the Fed and into a third-party custodian, but one obvious candidate is Russia,” said Lou Crandall at Wrightson Icap.

Russia held $138.6bn in US government debt at the end of December, according to the US Treasury.

At the same time, U.S. banks were already behaving as if Obama’s threatened sanctions were in place. Over the past fortnight, traders and bankers said US banks had been particularly heavy sellers of Russian bonds. According to data from the Bank for International Settlements, US banks and asset managers between them have about $75bn of exposure to Russia.

Joseph Dayan, head of markets at BCS, one of Russia’s largest brokers said: “It’s been quite an ugly picture in Russian bonds the last few days and some of it has to do with international banks reducing exposure.”

Although foreign banks have not yet begun cutting credit to Russian companies en masse, bankers said half a dozen live deals to fund some of Russia’s biggest companies were in limbo as lenders waited to see how punitive western sanctions would be. As an example, Barclays of the UK had withdrawn from a plan with Russia’s VTB jointly to fund an Essar Energy deal. Barclays declined to comment.

Alexei Kudrin, a former Russian finance minister and a member of Vladimir Putin’s economic council, warned that sanctions could drive an extra $50bn of capital outflows from the Russian economy per quarter.

UPDATE (March 17):

In a referendum on March 16, 2014, the people of Crimea overwhelmingly voted to secede from Ukraine and join Russia. The BBC reports that some 95.5% of voters in Crimea have supported joining Russia. Both Obama and the EU call the referendum “illegal and illegitimate and its outcome will not be recognized”.

~StMA