Putin Cool to the Idea of Further Retaliation over Sanctions

Steven Lee Myers, Alan Cowell and Andrew Higgins — New York Times March 21, 2014

President Vladimir V. Putin of Russia on Friday formally completed the annexation of Crimea, signing into law bills passed by Parliament reclaiming the contested province from Ukraine. Hours earlier, the acting prime minister of Ukraine signed a political association agreement with the European Union. The pact has been bitterly opposed by Moscow, and its rejection in November by the Ukrainian president prompted the uprising that led to his overthrow in February.

As he cemented Russian control of Crimea, Mr. Putin declared a temporary cease-fire in a tit-for-tat battle of economic and political sanctions between Moscow and the West.

The European Union and the United States have frozen assets and limited the travel of a number of close associates of Mr. Putin’s for their part in Crimea’s annexation.

Mr. Putin responded to the moves by barring nine American officials and legislators from Moscow. But on Friday he said he did not see the immediate need for further reprisals, while leaving open the door for more later on.

With evident sarcasm, he also said in televised remarks that he would open an account at a Russian bank targeted by the American measures, even as the first effects on the country’s economy became clear.

Russia’s stock market opened sharply lower on Friday as a second rating agency, Fitch, followed Standard & Poor’s in warning that it would downgrade the country’s credit rating in the wake of the punitive American response to Russia’s move to annex Crimea.

Visa and MasterCard ceased operations with Bank Rossiya, the only corporation singled out on Thursday by the new sanctions because it served as a “personal bank for senior officials of the Russian Federation.”

Mr. Putin, meeting with members of his national security council, suggested in televised remarks that the government was still coming to grips with the impact of the sanctions, aimed at 20 people, including senior government officials and businessmen who have grown rich since Mr. Putin came to power more than 14 years ago.

Some of those attending the meeting were among those affected, including Mr. Putin’s chief of staff, Sergei B. Ivanov. “We should distance ourselves from them,” Mr. Putin joked, his face showing no emotion. “They compromise us.”

When Russia’s foreign minister, Sergey V. Lavrov, said that the ministry was prepared to draft unspecified retaliatory measures, however, Mr. Putin demurred. “I think we should refrain from taking steps in response for now,” he said.

Mr. Putin was speaking as the upper house of the Russian Parliament, the Federation Council, ratified a treaty signed this week to formally annex Crimea. The lower house, the Duma, took a similar step on Thursday and Mr. Putin was to make it final by signing the treaty later on Friday, ending a breathtaking six days of maneuvers that began with a hastily arranged referendum among Crimeans, who voted overwhelmingly in favor of secession on Sunday.

The formalities of Crimea’s annexation came after a stealthy, audacious campaign by Russian special forces to take over military installations, effectively forcing the Ukrainian authorities to capitulate by signaling the withdrawal of their 25,000 troops and dependents from Crimea.

The agreement signed in Brussels by interim Prime Minister Arseniy P. Yatsenyuk was part of an earlier deal abandoned by the deposed president, Viktor F. Yanukovych, in favor of a bailout by Russia. His action helped precipitate his downfall after weeks of protests in central Kiev.

Mr. Yatsenyuk signed the central part of a so-called association agreement with European Union officials and with leaders of the body’s 28 nations on the fringe of their summit meeting in Brussels. While the pact allows the two sides to deepen their economic and political collaboration, more detailed elements of the deal concerning free trade will be signed only after Ukraine’s presidential election, scheduled for May.

Herman Van Rompuy, the president of the European Council, said the agreement would offer Ukrainians a “European way of life,” and would recognize “the aspirations of the people of Ukraine to live in a country governed by values, by democracy and the rule of law, where all citizens have a stake in national prosperity.”

The juxtaposition of the two signing ceremonies on Friday in Brussels and Moscow, however, seemed to underscore the powerful forces pulling at Ukraine even as Western leaders seek to dissuade Russia from further advances in Russian-speaking areas in the east of Ukraine.

Russia last year put heavy pressure on Mr. Yanukovych to reject the original deal, fearing that it would torpedo efforts by Mr. Putin to form a Moscow-dominated customs union made up of former Soviet lands. Moscow also worried about Ukraine, a former Soviet republic of 46 million people, moving closer to Europe on security and defense, fears that could be heightened by Friday’s political accord, which calls for enhanced cooperation on foreign and security policy.

Steven Lee Myers reported from from Moscow, Alan Cowell from Berlin and Andrew Higgins from Brussels

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