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8/21/2019 Concrete Steps to Address the Crisis in Ukraine
1/21 WWW.AMERICANPROGRESS.O
Concrete Steps to Address
the Crisis in UkraineBy Ken Sofer March 2014
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Concrete Steps to Addressthe Crisis in Ukraine
By Ken Sofer March 2014
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1 Introduction and summary
3 Recommendations for U.S. action
3 Isolate Russia and press for a solution
6 Support the Ukrainian government
7 Reassure NATO allies
10 Establish a cost to Russia
14 Conclusion
16 Endnotes
Contents
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Introduction and summary
U.S., European, and Russian leaders have wached he poliical crisis in Ukraine
wih grea concern since las all when hundreds o housands o proesors rallied
in Kievs Independence Square. Te demonsraions were agains hen Ukrainian
Presiden Vikor Yanukovychs decision o rejec closer economic ies wih he
European Union. Bu wha sared as a domesic poliical crisis over he direcion
o Ukraines economy has now escalaed ino an inernaional miliary crisis wih
Russias subsequen blaan violaion o Ukraines erriorial inegriy.
Following he iniial proess in November, an escalaing spiral o violence
beween Ukrainian securiy services and he proesors evenually drove Russian-
leaning Presiden Yanukovych rom power in February o be replaced by govern-
men officials who avor a sronger relaionship wih he European Union. Less
han 10 days afer Yanukovychs ouser, he Russian governmen deployed several
housand roops ino he Ukrainian region o Crimeaa sraegically impor-
an peninsula on he Black Sea wih a majoriy ehnic Russian populaion and
a Russian naval base in he por ciy o Sevasopol. Russian Presiden Vladimir
Puin has deended he miliary incursion ino Ukrainian erriory under he
preense o proecing Crimeas large Russian-speaking populaion rom Ukrainian
auhoriies and righ-wing Ukrainian naionaliss. Te Russian governmen now
appears o be preparing o annex Crimea and incorporae i ino he Russian
Federaion, which would be a urher escalaion o he conflic and anoher signifi-
can violaion o inernaional law.
Te Ukrainian poliical crisis and Russias apparen willingness o annex Crimea
has raised several imporan sraegic quesions or U.S. policymakers as hey
coordinae a response wih allies in he European Union and he Norh Alanic
reay Organizaion, or NAO. When deermining he mos effecive course oacion, policymakers should assess ways o suppor various U.S. prioriies in he
crisis, including, bu no limied o:
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Finding a nonviolen soluion o he crisis ha reesablishes he sovereigny and
erriorial inegriy o Ukraine. Tis mus include he wihdrawal o unauhor-
ized Russian miliary orces rom Ukrainian erriory and he reurn o auho-
rized Black Sea Flee orces o heir base.
Esablishing a uncioning and democraic Ukrainian governmen and economyha respec he righs o minoriies and can manage a difficul period o ransi-
ion, including new naional elecions.
Mainaining he credibiliy and inegriy o ransalanic alliances and reay
obligaions.
Upholding inernaional rules, norms, and insiuions ha govern accepable
inernaional behavior.
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Recommendations for U.S. action
o suppor hese key prioriies and address he crisis in Ukraine, he Unied
Saes should ake a series o shor- and long-erm seps under he ollowing
broad banners:
Isolae Russiaeconomically and diplomaically, including by suspending isparicipaion in major inernaional orums such as he Group o 8, or G-8, and
press or a diplomaic soluion o he curren crisis ha resuls in he removal o
unauhorized Russian roops and reesablishes Ukrainian sovereigny.
Suppor he Ukrainian governmen hrough robus economic and poliical
assisance o sabilize is economy, implemen longer-erm economic reorms,
and advance poliical reorms ha promoe effecive democraic governance a
naional and local levels.
Reassure NAO ha he Unied Saes will abide by is securiy commimens
hrough a shor-erm, augmened securiy presence and a long-erm effor o
diversiy European energy sources.
Esablish a cos o Russia or violaing inernaional norms and reaies hrough
economic sancions, asse reezes, and ravel bans in coordinaion wih he
European Union.
Isolate Russia and press for a solution
Te inernaional communiy should srongly condemn Russias unlawul occupa-
ion o Crimea and make i clear ha i will rejec any effor o use miliary orceo annex erriory or esablish a proecorae. Isolaing Russia diplomaically and
suspending is paricipaion in major inernaional orums will undercu Moscows
atemps o rame Ukraine as an Eas versus Wes or neo-Cold War conflic. I will
also damage Moscows inernaional presige, which remains a significan acor in
Presiden Puins decision-making process.1
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Te Unied Saes, France, and he Unied Kingdom are all preparing o boycot
he upcoming G-8 meeing, scheduled o ake place in Sochi, Russia, his June.2
Secreary o Sae John Kerry said ha he oher members o he G-8a major
economic orum or he worlds key indusrialized naionsmay disinvie Russia
rom he group and all uure meeings i i mainains is aggressive posure in
Ukraine.3
Te Unied Saes is also reezing all aspecs o is miliary relaionshipwih Russia, canceling is paricipaion in exercises, bilaeral meeings, por visis,
and planning conerences.4
Tese effors are imporan firs seps. Bu Russia ulimaely needs o experience
he loss o suppor rom he bulk o he inernaional communiy, including re-
quen diplomaic allies such as China. Russia and China are ofen closely aligned
in he U.N. Securiy Council, blocking any resoluion ha appears o endorse
oreign inervenion or violaions o sovereigny, including effors o impose
ougher inernaional sancions agains Syria and Iran.5Bu China has ye o come
o Russias aid now ha Moscow is he one so blaanly violaing anoher counryssovereigny. Alhough China has no explicily criicized Russias acions, Chinese
Presiden Xi Jinping encouraged Russia o allow or mediaion effors o he iner-
naional communiy ha are conducive o reducion o ension.6
I is unlikely ha China will explicily break wih Russia over Ukraine. Bu i he
Unied Saes is able o pu a U.N. Securiy Council resoluion o a voe suppor-
ing Ukraines erriorial inegriy and calling or an inernaionally mediaed reso-
luion, and he resoluion is veoed only by Russia, wih China absaining, even
his suble shif in Chinas posiion would be a clear warning o Russia ha i is on
shaky ground wih ew riends.
In an effor o urher isolae Russia, U.S. diplomas can appeal o oher iner-
naional groups ha place a high prioriy on naional sovereigny and erriorial
inegriy. One avenue is a join saemen by he non-Russian BRICS counries
Brazil, India, China, and Souh Aricasupporing Ukraines sovereigny and
calling or inernaional mediaion o deescalae he conflic. Oher poenial
venues or inernaional opposiion include he Group o 20, or G-20a orum
or he worlds 20 larges economies o discuss he inernaional financial sys-
emand he Group o 77a group o developing naions ha have radiionallybeen srong advocaes or he imporance o naional sovereigny.7In addiion,
Kazakhsan, wih is own large ehnic Russian minoriy populaion, may be con-
vinced o make a public expression o suppor or Ukraines sovereigny, adding
o he chorus o close Russian allies, such as Uzbekisan and Belarus, which are
breaking wih Moscow over Ukraine.8
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Effors o inernaionally condemn and diplomaically isolae Russia are impor-
an seps oward reinorcing and deending he se o rules and norms wihin he
inernaional communiy ha govern he acceped behavior o saes. A significan
uproar by he inernaional communiy will undermine Russias inernaional
presige and negae Puins recen effors o rebuild Russias sanding in he iner-
naional communiyincluding hosing he 2014 Sochi Winer Olympics andRussias role in he Geneva II peace alks on Syria.
Diplomaic isolaion o Russia is as imporan as economic sancions o impose
a significan cos on such a blaan violaion o inernaional law. Te Russian
economy is highly dependen on is economic and diplomaic linkages wih he
res o he world, paricularly Europe. Russian rade was valued a $1.04 ril-
lion in 2012, roughly 52 percen o Russias gross domesic produc, or GDP.9
Wihou access o expor markes and he global financial sysem, he Russian
economy would collapse. Effors o diplomaically isolae Russia, consric is
bilaeral relaionships around he world, and limi is paricipaion in orums hashape he global economy, such as he G-8 and G-20 would all limi Russias abil-
iy o uncion as a modern economy.
Bu damaging Russias diplomaic and economic sanding is only a ool o influ-
ence Russias behavior and push Presiden Puin oward he ulimae goal o a
nonviolen, negoiaed soluion o he crisis in Ukraine. Russia has several key
ineress a sake in Ukraine, including he desire o preserve poliical influence in
he Ukrainian governmen; mainain srong economic and energy relaions wih
Ukraine; proec Russian ciizens living in easern Ukraine; and reain is naval
base in Sevasopol. Te Unied Saes should coninue atemping o convince
Russia ha he bes way o secure hese ineress is hrough a negoiaed soluion
o he crisis and ha coninuing down he pah o Crimean annexaion ulimaely
poses a risk o is oher ineress in Ukraine.
A negoiaed setlemen could include seps by he inerim Ukrainian governmen
o enshrine ino law he civil righs o he Russian-speaking minoriy; o uphold
he poliical auonomy o Crimea and open up a dialogue on increased auonomy;
and o reaffirm he 1997 Russia-Ukraine riendship reay, which esablished
Russias lease on he naval base in Sevasopol.10
Suppor or he righs o heRussian-speaking minoriy in Ukraine could be suppored hrough a ormal mis-
sion by he Organizaion or Securiy and Cooperaion in Europe, or OSCE. Te
OSCE has a hisory o supporing he civil and poliical righs o minoriy Russian
populaions in oher ormer Sovie saes, such as Lavia and Esonia in he mid-
1990s, and could provide a similar guaranee in Ukraine.11
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Tis would allow Presiden Puin o wihdraw Russian roops rom Crimea
while claiming o have successully accomplished his saed goal o proecing
he Russian-speaking populaion in Ukraine. As par o a negoiaed setlemen,
all paries would agree o deer or se period o ime on Ukrainian accession
o any regional organizaion, including NAO, he European Union, and he
Russian-backed Eurasian Union. Once Russia ends is miliary inervenion andrecognizes Ukraines erriorial inegriy, inernaional organizaions such as he
Unied Naions and he OSCEsuppored by he Unied Saes, Russia, and he
European Unionwould be able o assis Ukraine in making he poliical reorms
ha can ensure effecive democraic and represenaive governmen a boh he
naional and local levels. Tese seps would se he sage or a new round o elec-
ions in May moniored by inernaional elecion wachers ha will reesablish a
legiimae, democraically eleced governmen in Kiev.
Support the Ukrainian government
Te Russian effor o annex Crimea hrough miliary orce remains he mos
pressing issue in he Ukrainian crisis. Wheher or no Russia can be persuaded
o roll back is occupaion, Ukraine needs assisance o become poliically and
economically viable.
In he shor erm, an inusion o aid can help manage he crisis. In he long-erm
response, he Unied Saes, he European Union, and oher naions such as Japan
will need o find he will and resources o suppor he Ukrainian governmen wih
economic and poliical assisance sufficien o sabilize is economy, implemen
longer-erm economic reorms, and begin poliical reorms ha promoe effecive
democraic governance. By surging o suppor a counry under atack, he Unied
Saes and is parners can demonsrae a clear commimen o inernaional norms.
So ar, he Unied Saes has offered a $1 billion loan guaranee o provide he
Ukrainian governmen wih much-needed emergency budge suppor.12Te
European Union has similarly pledged $15 billion in aid over he nex couple o
years in grans, credi rom he European Invesmen Bank, and loans rom he
European Bank or Reconsrucion and Developmen.13
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Tese iniial seps are posiive, bu hey pale in comparison o boh he immediae
and he srucural challenges acing he Ukrainian economy. Te Ukrainian gov-
ernmen is acing a major budge shorall due o a combinaion o an unreormed
energy secor and expensive energy subsidies, a bloaed civil service, and he ac
ha as much as hal o is GDP is esimaed o be in he shadow economy, where
much o i is embezzled or unable o be axed.14
Kiev says i needs $35 billionover he nex wo years o und is curren accoun defici and save off deaul.15
Under ormer Presiden Yanukovychs ime in power, an esimaed $37 billion in
loans were solen rom he sae, according o Ukrainian governmen officials.16
Any solen unds ha can be recovered should be immediaely poured back ino
he Ukrainian governmen or budge suppor, alhough he recovery o unds will
likely ake oo long o address Ukraines immediae budgeary shorall.
Since no aid package can dig Ukraine ou o is economic hole overnigh, he
Unied Saes should ully suppor he Inernaional Moneary Funds renewal o
negoiaions wih he Ukrainian governmen on a long-erm loan package ied oundamenal reorms o he economy.17
Te Ukrainian governmen will also need he inernaional communiys sup-
por as i begins he process o reconciliaion beween is poliical acions and
atemps o reurn o a normal poliical process wihin he bounds o he consiu-
ion. Regardless o wheher or no a negoiaed setlemen is reached, he OSCE
should esablish a ormal mission o Ukraine o monior he Ukrainian presiden-
ial elecions scheduled or May and o promoe human righs, good governance,
and reedom o he press. Te Ukrainian governmen has already invied in OSCE
miliary observers, bu Russian roops have repeaedly prevened he observers
rom enering Crimea o conduc heir mission.18
Reassure NATO allies
Even hough he Cold War is long over, several key NAO allies, such as Poland
and he Balic saes, sill view Russia as a major securiy hrea and see he cur-
ren crisis in Ukraine as a vindicaion o such ears. Poland and Lihuania called or
emergency alks on Ukraine wih oher members o he alliance, ciing Aricle 4 ohe 1949 Norh Alanic reay, which allows member saes o call or an alliance
consulaion i hey believe ha heir erriorial inegriy, poliical independence, or
securiy are under hrea.19Tis is only he ourh ime in he alliances hisory ha
a member has cied Aricle 4, reflecing he sense o hrea some NAO members
sill eel when hey look o he eas a Russia and see i seizing erriory no jus in
Ukraine bu also in Moldova and Georgia, as i did in he early 1990s and 2008.20
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While NAO members such as Poland, Slovakia, Hungary, Romania, or even he
Balic naions o Esonia, Lavia, and Lihuania are a less risk o a Russian inva-
sion han Ukraine and are proeced rom exernal atack under Aricle 5 o he
Norh Alanic reay, hey need o know ha he Unied Saes will abide by is
securiy commimens and preven any similar encroachmen on heir sovereigny
and erriorial inegriy.
One way o reassure our allies is hrough a shor-erm, augmened securiy pres-
ence in Easern Europe. Te Unied Saes is already increasing is paricipaion in
NAOs air parol mission in he Balics and will increase join raining hrough is
aviaion deachmen in Poland.21Te U.S. Air Force is sending six addiional F-15
figher jes and a KC-135 reueling anker o augmen he our U.S. F-15s ha are
regularly provided o Lihuania or he air parol mission.22
Te Unied Saes is also sending he USS ruxun, a guided-missile desroyer, ino
he Black Sea or a prescheduled naval raining mission wih NAO allies Romaniaand Bulgaria.23Alhough he USS ruxuns deploymen o he Black Sea is unre-
laed o he Ukrainian crisis, is presence is an imporan projecion o U.S. power
no ar rom Crimea and he Russian naval base in Sevasopol on he Black Sea.
NAO should emporarily augmen is join-raining exercises and parols in he
shor erm o reassure is easern members, which are all hreaened by he Russian
invasion o Ukraine. Neiher Russia nor he Unied Saes has any desire or a direc
miliary conronaion, bu such aciviies send an imporan signal abou he uniy
and resolve o he NAO alliance and is commimen o non-NAO parners.24
Alhough members o he Euro-Alanic Parnership Council, or EAPC, such as
Georgia and Moldova, are no ull NAO members, hey are imporan parners
or he Unied Saes and Europe. EAPC counries, mos o which are ormer mem-
bers o he Sovie-bloc, remain under coninued risk o Russian miliary acion.
Seps o reinorce he NAO alliance will also help reassure non-NAO parners
ha seek a closer relaionship wih he European Union.25
A emporary expansion o NAOs miliary presence will reassure allies and
parners in he shor erm, bu he only hing ha will ruly enhance European
securiy in he long erm is he coninued diversificaion o he coninens energyresources o reduce is dependence on naural gas impors rom Russia. Te
European Union has made a concered effor o diversiy is supply o naural gas
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since he mid-1990s when Russian naural gas expors represened 75 percen o
oal EU consumpion. Bu even oday, Russia sill supplies 34 percen o he EUs
needs and six European counries are sill 100 percen dependen on Russia or
naural gas supplies.26Tis energy dependence is a major sraegic vulnerabiliy
or he Unied Saes European allies.
Russia has used is energy leverage as a way o pressure European governmens
muliple imes in he pas, including in 2006 and 2009 when Russian sae-run
gas company Gazprom cu off supplies o Ukrainehe main condui or Russia
naural gas o he res o Europe. Germany, France, Poland, and oher Cenral
European counries repored significan gas shoragescrucial or heaing and
elecriciyin he dead o winer boh years.27And NAO member Slovakia
declared a naional sae o emergency in January 2009 due o he Russian gas
cuoff.28Russia can be blun abou is use o naural gas o pressure European
governmens. In response o Moldovas push or a ree rade agreemen wih he
European Union las all, Russian Depuy Prime Miniser Dmiri Rogozin omi-nously warned he Moldovan governmen ha Energy supplies are imporan in
he run-up o winer. I hope you will no reeze.29
o couner his sraegic vulnerabiliy, he Unied Saes should work wih
European governmens and he European Union on a coordinaed long-erm
sraegy o diversiy European energy resources, reduce naural gas impors rom
Russia, and insulae he coninen rom major energy shocks. Firs and oremos,
coninued U.S.-EU cooperaion on energy efficiency improvemens and renew-
able energy resourcessuch as solar, wind, and hydropowerwill help reduce
he percenage o European elecriciy ha comes rom burning naural gas. Te
European Union has already made progress expanding is renewable energy
producion, which accouned or 11 percen o European energy consumpion in
2011, bu significan room or growh sill remains.30
Europe can urher reduce is dependence on Russian energy supplies by expand-
ing is naural gas parnerships wih oher suppliers, mos noably Norway and
he Unied Saes. Since 1995, Norway has ripled is naural gas producion
and has become an increasingly large exporer o Germany and he Unied
Kingdom.31
Public-privae parnerships in he European Union should make aconcered effor o expand Norways role as a sable, reliable energy supplier o
naural gas o he coninen.
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Addiionally, he Unied Saes has an opporuniy o play an imporan role
down he road supplemening Europes naural gas supply hanks o he growh
o domesic American gas supplies. Te process o exporing liquefied naural
gas rom he Unied Saes o Europe is complicaed, and i will ake several years
beore he inrasrucure could be pu in place o make his possible,32bu he
Unied Saes and European Union should explore he possibiliy o an expandedU.S.-European naural gas parnership. Jus discussing his possibiliy will demon-
srae ha Europe and ormer Sovie saes can find alernaives o dependence on
a Russian governmen ha rades in coercion and inimidaion.
Resolving he challenges creaed by Ukraines energy relaionship wih he res o
Europe will also be criical. Fify percen o Russian naural gas is delivered o he
European Union hrough pipelines in Ukraine,33bu Ukrainian energy inefficiency
and is Sovie-era energy inrasrucure has made Ukraine one o he worlds big-
ges consumers o energy compared o he size o is economy. Ukraine used more
han 56,000 BUs o energy or every dollar o GDP in 2010, he ourh highesraio in he world and roughly 10 imes he European average.34Te European
Union should make significan invesmens now o modernize Ukraines energy
inrasrucure, which would be a boon o he Ukrainian economy in he shor
erm and would help o manage a key long-erm challenge.
Tis process o increasing Ukrainian energy efficiency and modernizing is energy
inrasrucure would also send a powerul message o Ukraine and oher ormer
Sovie saes abou he value o increased inegraion wih Europe. When com-
bined wih an ongoing EU anirus case agains Gazprom and he suspension
o discussions on he Souh Sream pipelinea Russian-backed gas pipeline o
Bulgaria hrough he Black Seahis effor will reduce he abiliy o Russia o
exploi Ukrainian energy vulnerabiliies and srong-arm Europe.
Establish a cost to Russia
Russias invasion and occupaion o Crimea represens a clear violaion o several
major inernaional agreemens. Tese include: Aricle 2(4) o he U.N. Charer,
which saes ha members shall rerain rom he hrea or use o orce agains heerriorial inegriy or poliical independence o any sae;35he 1994 Budapes
Memorandum on Securiy Assurances, in which Russia agreed o rerain rom
he use o orce agains he erriorial inegriy or poliical independence o
Ukraine;36and he Helsinki Accords o 1975, in which member saes pledged o
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respec he erriorial inegriy and poliical independence o all naions.37Afer
Russian roops occupied he local Crimean parliamen, hey handpicked a pro-
Russian prime miniser, who subsequenly pushed hrough a voe or he region
o secede rom Ukraine and join he Russian Federaion. A reerendum o approve
Crimeas unificaion wih Russia is scheduled or March 16 even as Russian roops
coninue o parol he regions srees.38
Te upper house o Russias parliamenhas already said ha i he reerendum is successul, Russia would invie Crimea o
join he Russian Federaion.39
Te planned reerendum and atemp o annex Ukrainian erriory while under
miliary occupaion is a clear violaion o he Ukrainian consiuionwhich
requires ha any changes in erriorial borders be pu o a naionwide reerendum,
no simply a regional voe. I is also a violaion o inernaional law, as Presiden
Barack Obama saed a a press conerence on March 6.40Te reerendum carries
no legal significance and will be rejeced by he Unied Saes and he inernaional
communiy. Te ciizens o Crimea have legiimae, legally recognized opionsavailable o hem o expand and guaranee heir auonomy hrough he process
idenified by he Ukrainian consiuion.
U.S. diplomas should make his argumen o naions around he world and
encourage hem o no recognize any atemp by Crimea o declare isel par o
Russia or o declare isel independen. Furhermore, he Unied Saes and he
European Union should insis ha he Russian governmen deer any decision on
he saus o Crimea o a legal, inernaionally mediaed negoiaion on sel-gov-
ernmen beween local auhoriies in Crimea and cenral auhoriies in Kiev.
I he Russian governmen uses he reerendum as an excuse o annex Crimea or
reuses o wihdraw is unauhorized orces rom Ukrainian erriory, hen he
Unied Saes should coordinae wih he European Union and is oher allies o
penalize violaors o Ukrainian sovereigny and erriorial inegriy. Te inerna-
ional communiy should make clear ha such a blaan violaion o inernaional
law comes a a seep cos o he belligerens.
Boh he Unied Saes and he European Union have several ools a heir dis-
posal o impose a cos on violaors o Ukrainian sovereigny, including ravel bans,asse reezes, and aggressive invesigaions o illici financial flows. For example,
he U.S. governmen has already aken several seps o impose a cos, including
an execuive order issued by Presiden Obama ha will place ravel resricions
and financial sancions on individuals and eniies involved in he occupaion o
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Crimea.41Te European Union roze he asses o ormer Ukrainian Presiden
Yanukovych and 17 senior members o his governmen,42bu i has ye o impose
any sancions on Russian officials in he hope ha he siuaion can be resolved
diplomaically. However, European leaders have said ha sancions remain on he
able. Te Foreign Miniser o he Neherlands Frans immermanswhich has a
close economic relaionship wih Russiasaid sancions will become ineviablei Russia does no change is posiion.43Briish Prime Miniser David Cameron
saed ha European sancions and ravel bans agains Russia governmen officials
could come wihin days.44
In addiion o preparing new, argeed sancions, he U.S. governmen can readily
impose sancions on exising violaors o human righs wihin Russia, as cov-
ered by he Sergei Magnisky Rule o Law Accounabiliy Ac o 2012.45U.S. and
European governmens can also more rigorously enorce exising laws agains
organized crime syndicaes and money laundering ha could ensnare many
Russian governmen officials and key business leaders who suppor he Puingovernmen.46Te subsequen damage o he economic ineress o senior govern-
men officials and Russian business leaders, who represen a vial consiuency or
Presiden Puin, could cause enough domesic poliical backlash o orce Puin o
ake a more conciliaory approach o he crisis.
U.S. and European governmens can also underake a campaign o aggressive
cases agains Russia in he World rade Organizaion relaed o any suspeced
improprieies and barriers in public procuremen. Tis would boh shine a brigh
ligh on he increasingly klepocraic patern o rule by he Puin governmen
and impose a real business cos or Puins elie supporers i WO cases were o
resul in proraced rade dispues. One example o a liigaion-based sraegy is
he European Unions ongoing anirus case agains Gazprom. Te case has he
poenial o impose major fines on he company and curail Russias influence on
he European naural gas marke.47
EU suppor or argeed economic sancions will be crucial o maximize he
impac o such measures because European-Russian economic relaions are sig-
nificanly more imporan o he Russian economy han U.S.-Russian economic
ies. EU-Russian rade was valued a $330 billion in 2012 compared o $38 billionor U.S.-Russian rade.48Paricular ocus should be paid o EU member-sae and
off-shore ax haven Cyprus, where Russian individuals and companies reporedly
deposied $34.6 billion49more han he size o Cypruss economyincluding
$31 million in sae axes embezzled by Russian governmen officials.50
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Righ now, U.S. and EU sancions should be argeed agains members o he
Russian governmen and organizaions direcly involved in he miliary occupa-
ion o Crimea and any atemped annexaion o Ukrainian erriory. Presiden
Obama and he U.S. governmen should make i clear o Russian officials ha
hese economic resricions are explicily relaed o he siuaion in Crimea and
will be lifed as soon as Russian orces wihdraw rom Ukrainian erriory andRussia recognizes Ukraines sovereigny.
I he crisis in Ukraine were o expand, he Unied Saes and Europe should be
prepared o impose a wider se o sancions argeing Russian oligarchs, inerna-
ional business ineress, and oreign financial ransacions. Te acions should be
subsanial enough ha Russia will ear acing a sancions regime similar o he one
acing Iran, including resricing purchases o Russian naural gas, cuting Russia off
rom he inernaional paymens and SWIF syseman inernaional nework
or encoding and ranserring financial inormaionand oher narrow avenues o
disproporionae leverage. Such seps will cos significan poliical capial and willdamage no only he Russian economy, bu also he enire global economy.
Tese ypes o broad sancions will likely also resul in Russian obsrucionism on
a range o key areas o curren cooperaion wih he Unied Saes, including he
norhern disribuion nework or Aghanisan; nuclear negoiaions wih Iran and
Norh Korea; effors o end he civil war in Syria and remove chemical weapons;
and nuclear nonprolieraion aciviies relaed o he SAR and New SAR
reaies. Tese seps o enac a broader sancions regime should only be aken i
Moscow makes i clear ha i is preparing or a permanen occupaion o Ukraine
and coninuing is patern o abusing inernaional law.
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Conclusion
For he Unied Saes, he crisis in Ukraine is abou more han jus Crimea.
Resolving his crisis and reinorcing he Ukrainian governmen is abou uphold-
ing several inernaional agreemens ha Russia is currenly violaing, including
he Helsinki Accords and he Budapes Agreemen. I is also abou reinorcing
he inernaional communiys bedrock principle ha erriorial annexaion under
hrea o miliary orce is an unaccepable pracice in our modern inernaional
sysem. U.S. and European policymakers have he ools available o hem o
impose a cos on Russia or any atemp o illegally and unconsiuionally annexUkrainian erriory or o illegally esablish i as an independen proecorae. Bu
righ now he ball is in Presiden Vladimir Puins cour. Wih he reerendum in
Crimea scheduled or March 16, Puin mus decide wheher or no he wishes o
escalae his inernaional crisisand accep he economic, diplomaic, and polii-
cal coss o doing so.
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About the author
Ken Soferis a Policy Analys wih he Naional Securiy and Inernaional Policy
eam a he Cener or American Progress. Soer graduaed wih a bachelors
degree rom he Universiy o Souhern Caliornia, where he sudied poliical
science and inernaional relaions wih a ocus on U.S. oreign policy. He sudiedArabic and Middle Eas poliics in boh Cairo, Egyp, and Amman, Jordan.
Acknowledgments
Te auhor would like o hank Cory Wel, John Norris, Caroline Wadhams, and
Vikram Singh or heir guidance and edis o he paper.
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16 Center for American Progress | Concrete Steps to Address the Crisis in Ukraine
1 Deborah Welch Larson and Alexei Shevchenko,Prestige Matters: Chinese and Russian Status Concernsand U.S. Foreign Policy (Cambridge, MA: Belfer Centerfor Science and International Affairs, 2010), available athttp://belfercenter.hks.harvard.edu/publication/20090/prestige_matters.html?breadcrumb=/publication/701/future_of_uschina_relations.
2 Jon Swaine, Russia G8 status at risk over incredibleact of aggression in Crimea, says Kerry, The Guardian,March 2, 2014, available at http://www.theguardian.com/world/2014/mar/02/john-kerry-russia-putin-crimea-ukraine.
3 Ibid.
4 Eli Lake, Pentagon Freezing Its Relationship With Rus-sian Military, The Daily Beast, M arch 3, 2014, availableat http://www.thedailybeast.com/articles/2014/03/03/pentagon-freezing-its-relationship-with-russian-mili-tary.html.
5 Rick Gladstone, Friction at the U.N. as Russia andChina Veto Another Resolution on Syria Sanctions,The New York Times, July 19, 2012, available at http://www.nytimes.com/2012/07/20/world/middleeast/russia-and-china-veto-un-sanctions-against-syria.html;
Ariel Zirulnick, China, Russia resist US push for stifferIran nuclear sanctions, The Christian Science Monitor,November 10, 2011, available at http://www.csmonitor.com/World/terrorism-security/2011/1110/China-Russia-resist-US-push-for-stiffer-Iran-nuclear-sanctions-video.
6 Colum Lynch, Beijing and Moscow Part Ways OverUkraine, Foreign Policy, March 5, 2014, available athttp://thecable.foreignpolicy.com/posts/2014/03/05/beijing_and_moscow_part_ways_over_ukraine.
7 The Group of 77 at the United Nations, About theGroup of 77, available athttp://www.g77.org/doc/ (lastaccessed March 2014).
8 The White House, Readout of the Presidents Call withPresident Nazarbayev of Kazakhstan, Press release,March 10, 2014, available at http://www.whitehouse.
gov/the-press-office/2014/03/10/readout-president-s-call-president-nazarbayev-kazakhstan; UZNews.net, Uzbekistan expresses support for Ukrainessovereignty, March 5, 2014, available at http://www.uznews.net/news_single.php?lng=en&sub=top&cid=31&nid=25372; Belarusian Telegraph Agenc y, Belarussupports Uk rainian independence, territorial integrity,February 28, 2014, available at http://news.belta.by/en/news/politics?id=741448.
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11 The Economist, Max van der Stoel, minority man,September 9, 1999, available at http://www.economist.com/node/238513.
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john-kerry-arriving-in-kiev-offers-1-billion-in-loan-guarantees-to-ukraine.html.
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14 The Economist, Whys Ukraines economy in sucha mess?, March 5, 2014, available at http://www.economist.com/blogs/freeexchange/2014/03/ukraine-
and-russia; Marc Schleifer, Shadow Economy inUkraine Nearly 50% of GDP, CIPE Development Blog,December 8, 2009, available at http://www.cipe.org/blog/2009/12/08/shadow-economy-in-ukraine-nearly-50-of-gdp/#.Ux3DVPldWSo.
15 Carol J. Williams, Ukraine needs $35 billion in aidto avert default interim leaders say, Los AngelesTimes, February 24, 2014, available at http://www.latimes.com/world/worldnow/la-fg-wn-ukraine-aid-default-20140224,0,7587311.story.
16 Natalia Zinets and Timothy Heritage, Ukraine PM says$37 billion went missing under Yanukovich, Reuters,February 27, 2014, available at http://www.reuters.com/article/2014/02/27/ukraine-crisis-economy-idUSL6N0LW44M20140227.
17 Reuters, Ukraine hopes for first trache of IMF loan in
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19 Reuters, Poland requests more NATO consultationsover Russia, March 3, 2014, available at http://www.reuters.com/article/2014/03/03/us-ukraine-crisis-nato-meeting-idUSBREA221VS20140303.
20 Oren Dorell, Russian moves in Ukraines Crimea afamiliar pattern, USA Today, March 1, 2014, avail-able at http://www.usatoday.com/story/news/world/2014/02/28/russia-ukraine-crimea-pat-
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21 Phil Stewart and David Alexander, More U.S. jets onNATO patrol in Baltics amid Ukraine crisis: source,Reuters, March 5, 2014, available at http://www.reuters.com/article/2014/03/05/us-ukraine-crisis-pentagon-idUSBREA242D320140305.
22 U.S. Air Force, 6 F-15s, KC-135 to augment NATO mis-sion in Baltics, March 5, 2014, available at http://www.af.mil/News/ArticleDisplay/tabid/223/Article/473483/6-f-15s-kc-135-to-augment-nato-mission-in-baltics.aspx.
23 Reuters, U.S. Navy destroyer heads to Black Sea for pre-planned exercises, March 6, 2014 , available at http://www.reuters.com/article/2014/03/06/us-ukraine-crisis-usa-navy-idUSBREA250Z920140306.
24 North Atlantic Treaty Organization, Partners, available
athttp://www.nato.int/cps/en/natolive/51288.htm(lastaccessed March 2014).
Endnotes
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25 European Union External Action, Initialling of theEU-George Association Agreement, available at http://www.eeas.europa.eu/top_stories/2013/291113_eu-georgia_association_agreement_en.htm(last accessedMarch 2014); European Union External Action,Initialling of the EU-Republic of Moldova AssociationAgreement, available at http://www.eeas.europa.eu/top_stories/2013/291113_eu-moldova_associa-tion_agreement_en.htm(last accessed March 2014).
26 Pierre Nol, Beyond Dependence: How to Deal WithRussian Gas (Berlin: European Council on Foreign
Relations, 2008), available at http://ecfr.eu/page/-/ECFR-09-BEYOND_DEPENDENCE-HOW_TO_DEAL_WITH_RUSSIAN_GAS.pdf;Jon Henley, Is Europes gassupply threatened by the Ukraine crisis?, The Guardian,March 3, 2014, availablehttp://www.theguardian.com/world/2014/mar/03/europes-gas-supply-ukraine-crisis-russsia-pipelines; Michael Ratner and others, EuropesEnergy Security Options and Challenges to Natural GasSupply Diversification, (Washington: CongressionalResearch Service, 2013), available at http://www.fas.org/sgp/crs/row/R42405.pdf.
27 Henley, Is Europes gas supply threatened by theUkraine crisis?
28 Reuters, Slovakia to call state of emergency over gas-agency, January 6, 2009, available at http://uk.reuters.com/article/2009/01/06/russia-ukraine-gas-slovakia-idUKPRA00229520090106.
29 The Moscow Times, Rogozin Warns Moldova on Rela-tions, September 5, 2013, available at http://www.themoscowtimes.com/business/article/rogozin-warns-moldova-on-relations/485526.html.
30 European Commission, EU Energy in Figures: StatisticalPocketbook 2013 (2013), available at http://ec.europa.eu/energy/publications/doc/2013_pocketbook.pdf.
31 Energy Information Administration, Norway(U.S.Department of Energy, 2012), available at http://www.eia.gov/countries/cab.cfm?fips=NO .
32 For a primer on some of the issues and opportunitiesin U.S. natural gas exports, see Gwynne Taraska, U.S.Liquefied Natural Gas Exports: A Primer on the Processand the Debate (Washington: Center for AmericanProgress, 2013), available at http://www.american-
progress.org/issues/green/report/2013/11/05/78610/u-s-liquefied-natural-gas-exports/.
33 Elena Mazneva and Stephen Bierman, Russia GasThreat Shows Putin Using Pipes to Press Ukraine,Bloomberg, March 3, 2014, available at http://www.bloomberg.com/news/2014-03-02/russia-gas-threat-shows-putin-using-pipelines-to-press-ukraine.html.
34 U.S. Department of Energy, Energy Intensity Total Pri-mary Energy Consumption per Dollar of GDP, availableat http://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=92&pid=46&aid=2(last accessed March 2014).
35 United Nations, Charter of the United Nations: ChapterI: Purposes and Principles, available athttp://www.un.org/en/documents/charter/chapter1.shtml(lastaccessed March 2014).
36 Council on Foreign Relations, Budapest Memoran-dums on S ecurity Assurances, 1994, December 5, 2014,available at http://www.cfr.org/arms-control-disarma-ment-and-nonproliferation/budapest-memorandums-security-assurances-1994/p32484.
37 Human Rights Library, The Final Act of the Conferenceon Security and Cooperation in Europe, August 1, 1975,available at http://www1.umn.edu/humanrts/osce/basics/finact75.htm.
38 Carol Morello and Anthony Faiola, Crimea sets refer-endum on joining R ussia, The Washington Post, March6, 2014, available at http://www.washingtonpost.com/world/crimea-sets-referendum-on-joining-rus-sia/2014/03/06/d06d8a46-a520-11e3-a5fa-55f0c77b-f39c_story.html.
39 Stuart Williams, Russian parliament vows to backCrimea referendum result, Yahoo News, March 7, 2014,available at http://news.yahoo.com/russian-parliament-vows-back-crimea-referendum-result-094655980.html.
40 Presidency of Ukraine, Constitution of Ukraine TitleIII: Elections. Referendum, available at http://www.president.gov.ua/en/content/chapter03.html(last ac-cessed March 2014); Edward-Isaac Dovere and JenniferEpstein, Obama: Crimea referendum would violateinternational law, Politico, March 6, 2014, availableat http://www.politico.com/story/2014/03/barack-obama-crimea-referendum-international-law-104363.html?hp=t1_3.
41 The White House, Executive Order BlockingProperty of Certain Persons Contributing to theSituation in Ukraine, Press release, March 6, 2014,available at http://www.whitehouse.gov/the-press-office/2014/03/06/executive-order-blocking-property-certain-persons-contributing-situation.
42 Tara Brady, EU names 18 Ukrainians whose assetswill be frozen including ousted President Viktor Yanu-
kovych, his son and countrys former Prime M inister,The Daily Mail, March 6, 2014, available at http://www.dailymail.co.uk/news/article-2574484/EU-names-18-Ukrainians-assets-frozen-including-ousted-Pre-sident-Viktor-Yanukovych-son-former-Prime-Minister-Mykola-Azarov.html.
43 Peter Baker, Top Russians Face Sanctions by U.S. forCrimea Crisis, The New York Times, March 3, 2014, avail-able at http://w ww.nytimes.com/2014/03/04/world/europe/top-russians-face-sanctions-by-us-for-crimea-crisis.html?_r=2.
44 Matthew Holehouse, Ukraine crisis: Im preparedto hit City to punish Putin, says David Cameron,The Telegraph, March 10, 2014, available at http://www.telegraph.co.uk/news/worldnews/europe/ukraine/10688532/Ukraine-crisis-Im-prepared-to-hit-City-to-punish-Putin-says-David-Cameron.html.
45 Sergei Magnitsky Rule of Law Accountability Act of 2012, 112th Cong., 2nd sess. (December 14, 2012).
46 Anders Aslund, Why Putin Is Likely to Lose His WarOver Crimea, Peterson Institute for InternationalEconomics, March 5, 2014, available at http://blogs.piie.com/realtime/?p=4245;Sergei Magnitsky Rule of LawAccountability Act of 2012.
47 Charles Recknagel, Endgame Nears In EUs AntitrustShowdown With Gazprom, Radio Free Europe RadioLiberty, February 11, 2014, available at http://www.rferl.org/content/eu-gazprom-antitrust-show-down/25260390.html.
48 RT, Who will threatened sanctions hit most? US-EU-Russia trade in numbers, March 4, 2014, available athttp://rt.com/business/us-eu-russia-sanctions-590/.
49 Brian Parkin, Russia-Cyprus Money Flows Imply Laun-dering, Schaeuble Says, Bloomberg, January 21, 2013,available at http://www.bloomberg.com/news/2013-01-21/russia-cyprus-money-flows-imply-laundering-schaeuble-says.html.
50 Adam Taylor, Sergei Magnitsky uncovered Russia-to-Cyprus money laundering, and look what happened tohim, Financial Post, March 22, 2013, available at http://business.financialpost.com/2013/03/22/sergei-mag-nitsky-uncovered-russia-to-cyprus-money-laundering-and-look-what-happened-to-him/.
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