BACKGROUND BRIEFING: Senior Administration Officials On Ukraine (February 12)

Senior Administration Officials On Ukraine
February 12, 2015
Via Teleconference

MODERATOR:  All right.  Thank you very much, Operator, and thanks to all the participants in the call today.  We have a background call on Ukraine with two senior Administration officials.  This call will be on background, so no names or titles please, but I will tell you who we have with us just for your awareness.  We have with us [Senior Administration Official One] and we have [Senior Administration Official Two].  Again, these are senior Administration officials for the purposes of the call from here on out.

And with that, I will turn it over to our first speaker for some introductory remarks.  We don’t have too much time today, so we’ll let [Senior Administration Official One] get started. 

SENIOR ADMINISTRATION OFFICIAL ONE:  Thanks, [Moderator], and thanks to everybody for joining us.  What I thought I’d do is walk through the structure of the agreement and then talk a little bit about the challenges ahead, and then we’ll go to your questions.  I know there’s been quite a bit of confusion about what’s in this complex set of documents.

So first to say that it calls for an immediate and comprehensive ceasefire in the area of fighting beginning on Sunday night at midnight, then the withdrawal of all heavy weapons by both sides.  The Ukrainians are to withdraw from the de facto – the current line of contact, and the separatists are to withdraw from the September 19th Minsk line.  And these heavy weapons withdrawals are to start on the second day after the ceasefire and to be completed within 14 days.  They are to be monitored and verified by the OSCE beginning on day one.  Thereafter, assuming that’s complete, a political dialogue begins to establish the new politics and the new political arrangements and economic arrangements in the special status area.

There will be a dialogue both on local elections for that area to happen under Ukrainian law.  There will also be no later than 30 days after the document was signed – so 30 days from today – there will be implementation of interim self-government in the special status area that will look very much like the special status law that was passed by the Rada in September; basically, local decentralized power over the economy, local policing, et cetera.  There will be pardon and amnesty, as the Ukrainians also offered in September, and there will be a full and complete exchange of all hostages, an all-for-all formula, which is to begin five days after the heavy weapons withdrawal, in other words, ideally 19 days from today.

Also a commitment to allow safe access for humanitarian assistance; for socioeconomic ties to resume between the special status area and the central government, including pension payments, the banking system, et cetera; and then finally after local elections, starting one day after local elections are held, there will be – and a comprehensive political settlement is made,  there will be the beginning of the return of the international border, the Ukrainian-Russian border, to Ukrainian sovereignty, to be complete by the end of 2015, assuming that a final condition – constitutional reform across Ukraine, including deep decentralization – has been completed by then.

So those are the terms of the agreement.  As we said in both the White House and the State Department statements today, the very, very important first test of serious commitment to implementation, particularly by Russia and the separatists, will be upon us very, very soon.  We are going to judge disagreements by how the parties behave, not by the words on the paper.  So in particular, we have to have a complete and durable end to the fighting; we have to have withdrawal of weapons.  And in order for the agreement to be completely fulfilled, there has to ultimately be restoration of Ukrainian control over its state border.

Those of you who have followed the Ukrainian story can understand that the first thing is to have a real ceasefire and a real pullback, creating a broad zone of peace where the most fierce fighting has been that the OSCE can monitor.  But after that comes this very complex political process of special status amnesty and local elections.  And that will require a lot of continued work and a lot of continued negotiation among the various parties.

As we made clear in the State Department statement today, what we are looking for in terms of fulfilling the commitment that we have made that sanctions can roll back on Russia would be the implementation of this agreement and the full implementation of the September agreement, the two being cohesive.  So we will consider sanctions relief when this and the September agreement are fully implemented.  That’s separate and apart from the sanctions on – that we have imposed with respect to Crimea, which will be linked to progress on Crimea.

Let me say that the United States very much welcomes this agreement.  It is absolutely essential to get the fighting stopped in Ukraine.  We are very grateful for the efforts of Chancellor Merkel and President Hollande, who led this and put their own personal credibility on the line, working with the parties for more than 17 hours in what they all describe as very intense and difficult negotiations.  Meanwhile, even before we get to the ceasefire date on Sunday, we are concerned that the fighting continues, particularly around Debaltseve, which, as you know, is outside of the special status area in Ukrainian Government-held territory.  We are also concerned about reports of new heavy weapons transferred into Ukraine from the Russian side, including reports today.

Finally, let me just say that today also brought other good news for Ukraine in the form of an agreement with the IMF to provide Ukraine with $17.5 billion in financial assistance in support of the economic reform program.  And as you know, the United States is also looking to provide another $1 billion loan guarantee relatively soon and a second $1 billion loan guarantee later in the year, assuming reforms stay on track.

So with that, let me see if my colleague has anything to add.

SENIOR ADMINISTRATION OFFICIAL TWO:  Just one point, and then a broader remark.  My colleague, I think, said that it starts on Sunday night.  Just to clarify, I think it starts Saturday night, February 15,at one minute past midnight Sunday morning.  Is that correct with your understanding?

SENIOR ADMINISTRATION OFFICIAL ONE:  Sorry.  I meant Sunday morning.

SENIOR ADMINISTRATION OFFICIAL TWO:  Okay.

SENIOR ADMINISTRATION OFFICIAL ONE:  So Saturday night into Sunday.

SENIOR ADMINISTRATION TWO:  Okay.  Just wanted to make that clear.

On the – the only other comment I would make is that the ceasefire component of this should not be underestimated.  And I think that the U.S. Government, its partners in Europe, Ukrainians have all been deeply concerned by the trends over the last few weeks, which is a significant escalation in the fighting, more equipment coming across the international border, the separatists pushing far past the line of contact with a very serious situation developing along numerous locations, including in the environs of Debaltseve and also in the southeast toward Mariupol.  And as a consequence, there was a huge push to bring these negotiations to a successful conclusion, simply in terms of stopping the fighting.

And that is not only important in terms of preventing the loss of life and the further loss of Ukrainian territory, but also making good on the IMF package.  Because it is difficult for Ukraine to make the reforms that it needs to make; it is difficult to attract new foreign investment at a time when the fighting goes on.  And so the financial side of this and the security side of this go hand in hand.

That having been said, I think we have to proceed with eyes wide open.  The first Minsk agreement made good sense, but it was not implemented.  Now we have a second bite at the apple, and it offers a way forward toward a peaceful resolution of the conflict, but the proof will be in the pudding.  The words need to backed up by deeds.  And the United States and its partners, as well as the Ukrainians themselves, will be bending over backwards beginning at midnight on Saturday, Saturday evening into Sunday morning, to press all parties to abide by these agreements and to turn what is a good start into a durable ceasefire and a workable peace plan.

MODERATOR:  All right.  Thanks to our speakers.  Operator, if you wouldn’t mind reminding participants how to get into the queue to ask a question, please.

OPERATOR:  Sure.  Ladies and gentlemen, again, if you would like to ask a question, please press * then 1.  And if you are using a speakerphone, please pick up the handset before pressing the numbers.  Again, * 1 to ask a question.

MODERATOR:  Okay.  And with that, I think we’re ready to go to the first question, Operator.

OPERATOR:  Okay.  And that comes from the line of Arshad Mohammed from Reuters.  Please go ahead.

QUESTION:  Thanks for doing the call.  Two things.  One, the White House statement makes no reference whatsoever to the possibility of additional U.S. sanctions or additional costs being imposed on Russia should it not comply.  That’s in contrast to the readout of the call between Presidents Obama and Putin on Tuesday, when the White House made very clear that additional sanctions were a possibility.  And Secretary Kerry’s statement emphasizes the possibility of sanctions being removed if there’s full implementation.  But again, it says nothing on the kind of stick side of things.  Why the emphasis – or why the de-emphasis on the possibility of additional new sanctions?  Are you afraid that if you even talk about that at this stage that it will unravel the agreement?

And then second, you describe your concern about the reports of heavy equipment, including today, moving from the Russian side of the border.  Are you able to assess yourselves whether those reports are credible, and if they are, do they not suggest that Russia really isn’t particularly interested in implementing or that it’s trying to help the separatists make further land grabs before 12:01 Sunday morning?

SENIOR ADMINISTRATION OFFICIAL ONE:  First of all, just to say that our emphasis today was on supporting the implementation of this agreement.  That’s what we all want to see, as my colleague said, not only in the interest of peace and ending the loss of life but in the larger interest of a stable, secure, democratic, more European Ukraine.  That does not in any way undercut or change our longstanding policy.  If the violence continues, if this is not implemented, there will be more costs, but we were emphasizing the positive today.

With regard to reports of new influx of weapons, we have confirmed over the last month and a half, I would say, a relatively massive influx of additional Russian military equipment.  With regard to what is being reported overnight, we’re seeking to confirm that.  We are trying to send the message as strongly as we can that any effort to grab more land between now and Saturday night will be a – will seriously undercut this agreement and to warn against it in strongest terms.

SENIOR ADMINISTRATION OFFICIAL TWO:  And I’d just add, simply to reiterate, that our concern today was to emphasize the positive and to try to put more wind in the sails of good-faith efforts to bring this conflict to a negotiated solution.  But everything that was in play before the new Minsk agreement remains in play – that is to say, our policy instruments in the security assistance realm, as well as in the economic costs realm, are on the shelf and they remain operative if this agreement is not honored and if we see the parties fail to move in the direction of a diplomatic endgame.

MODERATOR:  All right.  Thank you.  Operator, we’re ready for the next question.

OPERATOR:  And that comes from the line of Michael Gordon from The New York Times.  Please go ahead.

QUESTION:  Those of us who were with Secretary Kerry in Munich over the weekend were told that the American position was that the issue of control over the international border shouldn’t be deferred for way off in the implementation phase, because then you’d have a situation where the Russians could continue to reinforce and the agreement wouldn’t be enforced as a whole.  In this agreement, it seems like that actually is what’s going on.  The control of the border is not to be restored until the end of 2015 – ten and a half months from now, if then – because it also depends on constitutional reform and local elections.  And also, there’s no deadline specified in the agreement for removal of foreign forces in paragraph 10.  Are these not critical weaknesses in the agreement, and do they not cause you some concern, particularly as you note that Russian forces are coming – Russian – at least some equipment appears to be coming across the border, and also because if you do have local elections and the borders are not controlled, that creates a possibility for Russian meddling?

SENIOR ADMINISTRATION OFFICIAL ONE:  Just to start by saying that obviously, as this agreement makes clear, the conflict doesn’t come to a complete end until the international border is restored to Ukraine.  There are, as you know, in negotiations always things that get negotiated.  In this instance, the agreement calls for the international border to be the last issue, but clearly, if there are continued transfers of weapons and equipment during the implementation of this agreement, that will constitute a clear violation of not only the letter and – not only the spirit of the agreement but the letter of the agreement as well, and would cause us and our partners to have to impose more costs.

So there is an opportunity here if this agreement is implemented in good faith for there to be an end to the fighting, which can then allow real politics in the special status area under Ukrainian law and full access by the Ukrainian Government and other supporting structures to have elections that are free and fair and monitored by ODIHR, as called for in the agreement – if there is interference with those from the outside, that would also constitute a violation – and thereafter, of course, to finalize closure of the border.  But the process doesn’t end until Ukraine has its sovereign border back.

SENIOR ADMINISTRATION OFFICIAL TWO:  And I’d simply add that everything else being equal, we would prefer that the border between Ukraine and Russia be returned to Ukrainian control tonight.  But what we’re seeing here is a process of negotiation that went on through the wee hours and led to a situation in which the withdrawal of foreign fighters and military equipment and mercenaries from Ukraine is a core part of the agreement; it will be monitored by the OSCE.  In the coming days, we will be examining how to ramp up the abilities of the OSCE so that they can enforce this aspect of the agreement in a timely and in a comprehensive fashion.

And also Minsk II, if you will, backstops Minsk I, and therefore the obligations that are stated here are in line with the obligations that were outlined in Minsk I, which call for the rapid exit of foreign fighters and military equipment.  And given what we hope will be a quickly ramped-up OSCE mission, we will be able to tell if the Russians are not in compliance with that stipulation.

SENIOR ADMINISTRATION OFFICIAL ONE:  Just to add here that we consider this document signed in Minsk today to be an implementation plan for the September Minsk agreements – September 5th and September 19th.  So together they form a full package:  the elements plus the implementation.

MODERATOR:  All right, thank you.  Operator, we’re ready to go to the next question.

OPERATOR:  And that comes from the line of Matthew Lee from the AP.  Please go ahead.

QUESTION:  Hello?  Sorry.  Anyone there?

SENIOR ADMINISTRATION OFFICIAL ONE:  We hear you, Matt.  Go ahead.

QUESTION:  Ah, okay.  Thanks.  Listen, I just want to know:  In terms of territorial issues, are you guys happy – if everything is implemented, and I know that that’s a big if, are you – is this a good deal, or do you wish that it had been a little bit more favorable to the Ukrainians?  And then I just want to put a fine point on the sanctions and arms thing.  Is it correct that until this deal falls apart, if it does, that any action on those possibilities is on hold?

SENIOR ADMINISTRATION OFFICIAL ONE:  Any action on what possibilities, Matt?

QUESTION:  The consideration of – any decision on possible arms transfers or new sanctions on Russia.

SENIOR ADMINISTRATION OFFICIAL ONE:  So first with regard to the territorial pieces, this agreement does not change the lines of the special status area that were agreed in September.  The geographic boundaries of the territory are the same as those that were agreed on September 19th.  In the heavy weapons withdrawal stage, the Ukrainians pull back from the current line, the separatists pull back from the Minsk line, but in designating the territory politically and constitutionally it remains according to September 19th.  So from that perspective, that was important for Ukraine and important for the international community.

I think you heard my colleague say that the tools at our disposal – sanctions and increased security support – stay very much on the table if this is not implemented.

MODERATOR:  All right, Operator, ready for the next question.

OPERATOR:  Thank you, and that comes from Julian Barnes from The Wall Street Journal.  Please go ahead.

QUESTION:  You mentioned that the ceasefire is an important element of this in and of itself.  What steps would the United States want to see Ukraine take during the ceasefire period, especially if it is that is short-lived?  And what is the expectation of the kind of Russian support that might occur?  Obviously, the heavy weapons are banned, but if the border remains open until the end of the year, is there a sort of certain level of support that the Russians can support – give to the separatists under this agreement?

SENIOR ADMINISTRATION OFFICIAL ONE:  I think we want all sides to follow the spirit and the letter of the agreement with regard to the ceasefire; so first of all to end the firing at midnight on Saturday night into Sunday, but then to work with the OSCE to begin the pullback of weapons in each category, as specified in the agreement.  That will create, if it’s fully implemented, a very broad swath where the worst fighting has been that will be peaceful and will be heavily monitored by the OSCE.

Obviously, the whole point here is to end the fighting, get the weapons out, so that during the political period Ukraine again has access to the full territory so that there can be – assuming there will be elections, that there can be real campaigning by real candidates under Ukrainian law, that there can be monitoring of that election period, and that there can be calling out of any efforts to manipulate the politics or any efforts to manipulate the security situation from the outside.  And that would be our full expectation, that peace would be restored and that there would be full access by any Ukrainian and international monitors to the full area in the context of elections.

So that would be what we would be looking for and what the agreement would call for.

SENIOR ADMINISTRATION OFFICIAL TWO:  And as I alluded to at the outset, the – obviously, what happens on the battlefield and the pullback of weaponry and the standing down of troops that have been engaged in combat is the first order of business, but after that happens, then the 90-plus percent of Ukraine that is still under the direct control of Kyiv has a lot more breathing space to do the things that it needs to do to make the country a success, right.  It can kind of pull back from being on a war footing.  It can move forward with the reforms, some of which have already passed through the parliament, but they need to be implemented; others still need to move through the parliament.  And that also gives them the breathing room that they need to do more outreach for those people who are in the separatist-controlled areas.  And that is political outreach.  It means trying to restore the banking functions and pension functions and de facto re-attaching these regions to the rest of Ukraine.

And so in that respect, in some ways, the most important tasks that lay ahead after the initial cessation of fighting are on the reform front, the outreach front, and making sure that the Ukraine that we have before us is one that successfully makes the transition to stability, democracy, and is back on the path toward prosperity.

MODERATOR:  All right, thanks.  We don’t have too much time left, so we’ll try to get through a couple more questions quickly.  Operator, the next one, please.

OPERATOR:  And that comes from the line of Jo Biddle from AFP.  Please go ahead.

QUESTION:  Hello.  Thank you very much indeed.  Just a couple of questions.  Following up from what one of you said about the OSCE and trying to look at ways of trying to reinforce their mission, have you any idea how many more numbers might be needed?  And what other practical things will the United States be doing to try and ensure that this deal actually sticks?

And some observers are saying that in many ways the Americans have been quite happy to delegate this negotiation, this very difficult negotiation to the Europeans.  Would that be a correct characterization of what’s been happening the last few days?  Thank you.

SENIOR ADMINISTRATION OFFICIAL ONE:  With regard to the number of OSCE monitors, I think the OSCE is going to have to work with the parties now to evaluate whether the 500 monitors we currently have in country will be enough, or whether we’ll need to recruit more and what kinds of monitors will be most effective.  We are also looking at a full suite traditional technical means for monitoring and ensuring ceasefires.  They’re – a couple of those are mentioned in the document: drones, sensors; those kinds of things that we might be able to bring to bear.  The U.S. will obviously do its part, both in terms of fielding monitors, supporting this financially, and looking at what we can do technically.

Jo, I would not describe our role the way you did.  We have been working, as you know, in lockstep with the Europeans throughout this very difficult (inaudible) month on Ukraine, but especially in this intensive period of negotiations.  As you know, on Thursday Secretary Kerry was in Kyiv.  He was, if you want to call it this, an advance party before Chancellor Merkel and President Hollande arrived.  We then supported the negotiations with presidential calls to President Poroshenko, to President Putin.  As you know, in Munich the Vice President and Secretary Kerry met trilaterally with President Poroshenko and Chancellor Merkel to support the deal.  And all through the night we were getting reports from the Europeans and supporting their efforts.  And obviously our role will be key in ensuring implementation.

So this is – this has been a partnership and a very good one at that, and a real testament to the strength of the transatlantic relationship in support of a democratic Ukraine.

SENIOR ADMINISTRATION OFFICIAL TWO:  I’d add that I think one of the real strengths of our policy from the get-go has been solidarity across the Atlantic.  And whether it’s on the diplomatic front, the sanctions front, the support for Ukraine front, there really has been no daylight between the United States and its European partners, and we intend to keep it that way.

And as my colleague was just saying, from the perspective of Washington – and I can speak from the perspective of the White House – I think it would be inappropriate or a misperception to say that we have not been in the game, whether it was the Vice President’s engagement at Munich with Poroshenko and Merkel, then Merkel was here Monday, and we had a very intense set of meetings, then the President spoke with President Poroshenko and President Putin the following day; we were directly engaged with the Europeans after those phone calls and right through the night in Minsk.  So I think it’s safe to say that the United States has been present and accounted for right through the process.

MODERATOR:  Operator, we’re ready for the next question.

OPERATOR:  And that comes from Jim Sciutto from CNN.  Please go ahead.

QUESTION:  Hey.  Thanks very much for doing this, guys.  Just very quickly:  One, in light of Russia’s frequent public denials of having sent in any weapons, yet this deal calls for the withdrawal of heavy weapons, did Russia cop to having sent in those weapons as part of this deal?  Did they acknowledge it so that you could then move on to how they get the stuff out?

And just as a follow-up, although I know this is fairly big picture, I’m just curious:  What new leverage do you believe the West, the parties at hand, have to implement this agreement where the previous September agreement failed?

SENIOR ADMINISTRATION OFFICIAL ONE:  I don’t think there’s any doubt in any minds anywhere in the transatlantic community or in Kyiv that there are Russian weapons, Russian fighters, Russian command and control in the east of Ukraine.  You’d have to ask the negotiators in the room whether President Putin admits this, but clearly the reference to foreign fighters and foreign equipment leaving Ukraine is a reference to Russian equipment and Russian fighters.  So there’s no question there.

Jim, I just lost your second question.  Can you remind me?

SENIOR ADMINISTRATION OFFICIAL TWO:  Do we have more leverage now?

SENIOR ADMINISTRATION OFFICIAL ONE:  Oh.  Well, look, we have the same tools that we’ve had throughout.  There is the option to increase the pressure either through sanctions or through other kinds of support for Ukraine, including security support.  And as we said twice already, those remain on the table if we have to use them.

SENIOR ADMINISTRATION OFFICIAL TWO:  And I’d add that the – this – conditions in Russia have deteriorated in a secular fashion, partly because of declining oil prices, partly because of the sanctions, partly because of Russia’s political and economic isolation overall.  Now is this a sign that – this Minsk agreement a sign that Putin is changing course, and finally taking the off-ramp?  Only time will tell.  But there’s no question that he faces new incentives to try to find a diplomatic resolution to the conflict in Ukraine.

What we’ve seen unfold over the last 24 hours in Minsk I think suggests that we should hold out a glimmer of hope.  But again, I think the key issue in the days ahead will be implementation, implementation, implementation.  Do the separatists and the Russians abide by the terms of these two Minsk agreements?  And we will find out in the coming weeks.

SENIOR ADMINISTRATION OFFICIAL ONE:  And just to remind you of some of the numbers with regard to the threats to the Russian economy: 10 to 15 percent inflation across Russia now; $150 billion in capital flight from the country just last year; 130 billion has disappeared from Russia’s foreign currency reserves, money that they’ve spent propping up the ruble; Russia’s credit rating downgraded to junk and reports of layoffs and unemployment on the rise.

MODERATOR:  All right, thank you.  Participants, our speakers have to go, and so that will have to be the last question.  We want to thank everyone for joining us.  Once again, I would remind this call was on background attributable to senior Administration officials.  We thank our speakers and we thank all of you for participating and for your questions.  And until next time, goodbye.