December 19, 2013
Transcript: Ukraine’s Opportunity Through Crisis: America’s Role in Europe’s East
President and CEO
Executive Vice President
Senator John McCain (R-AZ)
The Cold War seemed to have ended with the fall of the Berlin Wall in 1989 and the subsequent collapse of the Soviet Union and Soviet empire. Following that, both the European Union and the North Atlantic Treaty Organization enlarged. Next year at the Atlantic Council, and way beyond the Atlantic Council, we will be celebrating the 25th anniversary of the Berlin Wall’s fall – (audio break) – of NATO and EU enlargements. And indeed we’ll have a tribute to those enlargements at our annual awards dinner on April 30th, where we’ll be honoring Secretary of Defense Chuck Hagel, EU Commission President Barroso, among others.
Recent events in the Ukraine have underscored how far we remain from President George H.W. Bush’s dream of “a Europe whole and free,” one that ultimately could embrace Russia and its closest neighbors, former elements of the Soviet Union, in one form or another. And of course one of the best forms was the Eastern Partnership Agreement of the European Union.
The latest news from the region underscores further that the future is unlikely to be determined by tanks and troops in this new era of global competition that we have entered. Russian President Vladimir Putin on Tuesday said he had agreed to loan Ukraine $15 billion and cut the price of critical natural gas supplies. Ukraine’s Prime Minister Azarov called the deal “historic.”
In Brussels, a draft EU document reported this morning by the Wall Street Journal indicated Ukraine could have gained even more from the West, though with different conditions and perhaps not as plainly put. Had it signed the EU pact, it might have had $26 billion of loans and grants from the EU over the next seven years, and if it has also agreed to the IMF package.
While the Ukraine pivots economically eastward, hundreds of thousands of Ukrainians continue to pivot westward, standing together in protest for their continued desire to be part of EU whole and free. And it’s in that context that we welcome back a great friend of the Atlantic Council, Senator John McCain, who visited these protestors over the weekend with Senator Chris Murphy, and continues to play a consistent and leading and principled role in supporting democratic change both in Eastern Europe and around the world, and thinking through what role the United States should be playing in these challenging times.
For those reasons and many more, the Atlantic Council presented Senator McCain with its Freedom Award in 2011 at our Wroclaw Global Forum in Poland. He said then – and I quote – “Like the workers of Gdansk or the youth of East Berlin, young people across the Middle East and North Africa, and in many other places too” – now, Senator McCain, one could add the word “Ukraine” – “are peacefully demonstrating to change the character of their countries not by a hateful ideology of violence but by the indivisible longing for human rights and democracy,” unquote.
Senator McCain, we look forward to your opening comments and then to a discussion that will be moderated by Atlantic Council executive vice president, Damon Wilson, who has impressively led our team effort in trying to make sense of events in Ukraine. For those in the audience who have heard Senator McCain before on this set of subjects, this is on the record. Feel free to tweet. The hashtag is – hashtag is #ACUkraine.
Senator McCain, it’s an honor to have you with us. (Applause.)
SENATOR JOHN MCCAIN (R-AZ): Thank you very much. Well, thank you, Fred. Thank you for that kind introduction. Thank you for your wise advice and counsel that you always provide me on trans-Atlantic issues.
I want to thank Damon. I want to thank all of you at the Atlantic Council, which is now, I believe, one of the premier intellectual leaders in foreign policy and national security, not just on trans-Atlantic but global issues. I’m very happy to have those kind words. Thank you for not mentioning that I ran for president. (Laughter.) I appreciate that. As I’ve often said, after I lost I slept like a baby: sleep two hours, wake up and cry; sleep two hours, wake up and cry. (Laughter.)
I also thank you again for your warm words – given the approval rating of Congress. In case you missed it, it is now 9 percent – 9 percent. A line I use all the time: that we’re now down to paid staff and blood relatives. And that’s a pretty clever line, but I received a phone call the other day from my mother, who is 101 years old, and we’re now down to paid staff. (Laughter.) So anyway, thank you for – I’m pleased to have the opportunity to be here.
As Fred mentioned, last weekend I went to Ukraine with my friend and fellow member of the Foreign Relations Committee, Democratic Senator Chris Murphy. We met with senior government officials – President Yankovich (ph), the major opposition – Yanukovich and major opposition leaders; members of civil society, including the daughter of Yulia Tymoshenko; many of the so-called oligarchs; Ukrainian youth and students; and some of the hundreds of thousands of peaceful demonstrators in the Maidan.
In all of my many years and travels abroad, I have never seen anything like what we witnessed last weekend in Ukraine. On Saturday night, we stood in the Trade Union building overlooking the Maidan while roughly a quarter of a million Ukrainians cheered and jumped up and down in a sea of sparkling cell phones. On Sunday, when we addressed the crowd, it was estimated to be as many as a million people.
There were Ukrainians of all walks of life, men and women, young and old, from all parts of the country. There were Ukrainian veterans of the Soviet war in Afghanistan helping to protect the demonstrators and securing our passage through the crowd. As we spoke, thousands interrupted us with cheers of, “Thank you, USA!” It was one of the most moving experiences that I have had.
Senator Murphy and I did not go to Ukraine to interfere in its internal affairs, or to favor one leader or group or party over another, but rather to support the peaceful aspirations of all Ukrainians and to affirm their sovereign right to determine the future of their independent nation by themselves, in freedom.
Obviously, the major development since we returned was Russia’s decision to purchase about $15 billion in Ukrainian bonds, reduce the price of gas it sells to Ukraine – an estimated annual savings of 2 (billion dollars) to 3 billion (dollars). This was a big deal, to be sure, but I think we need to recognize a few things about Russia’s financial intervention.
First of all, all of this Russian money will not solve Ukraine’s structural, economic and political problems. It will at best postpone them, and in many ways likely exacerbate them. By most estimates, President Yanukovich has bought about a year before Ukraine is once again staring down the barrel of an economic crisis.
We can all hope he uses this time wisely to address the sources of this looming crisis – namely Ukraine’s mounting debt burden, unsustainable currency peg, and large distortive energy subsidies – as the IMF has insisted. Somehow I doubt it. More likely, President Yanukovich will just kick the can down the road, and when the Russian money runs out in a year Ukraine will again be facing all of the same problems it is now.
We also need to recognize the reality of how President Putin’s temporary bailout of Ukraine fits into his larger ambition toward Russia’s so-called “near abroad.” In recent months, President Putin has pulled out all the stops to coerce, intimidate and threaten Ukraine away from Europe. Russia has blocked large amounts of Ukrainian trade, especially chocolate.
It has threatened to cut off its gas supplies in the dead of winter, which it has done before. And according to Ukrainian officials we met in Kiev, President Putin threatened President Yanukovich with far worse economic retaliation if he signed the Association Agreement with the EU. President Putin stressed on Tuesday that Russia’s financial assistance to Ukraine is free of conditions. If you believe that, I have some beachfront property in Arizona to sell you. (Laughter.)
Russia’s bullying extends beyond Ukraine to the other so-called EU Eastern Partnership countries. In the past few months, Russia coerced Armenia into joining its Eurasian Customs Union. It sought to prevent Moldova from signing its own Association Agreement with the EU by blocking imports of Moldovan wine, threatening to cut off its supply of gas, and suggesting it would stoke separatism in Transnistria.
Russia has blocked Lithuanian trade and deployed Iskander missiles to Kaliningrad. It is working to establish hardened borders for Abkhazia and South Ossetia by building fences that encroach deeper into Georgian territory. And today we hear news that Russia will soon deploy new rail-based, nuclear-capable ICBMs.
This pattern of behavior amounts to a Russian bid for a kind of quasi-imperial dominance over its neighbors – a newfound assertiveness that has only grown in the void left by the administration’s absence of leadership in other parts of the world, especially Syria. President Putin has been emboldened by President Obama’s empty threats of red lines and the resulting loss of U.S. credibility.
We now have the bizarre situation in which we are working with Russia to dismantle chemical weapons in Syria while Russia is supplying Assad with conventional weapons to continue the slaughter and maintain his hold on power. President Putin has taken a clear lesson from all of this: If the United States is unwilling to stand up to him in the Middle East, he can do as he wishes closer to home. And he has.
The key to President Putin’s geopolitical ambitions is Ukraine. It is more populous than all of the other Eastern Partnership countries combined. It shares the same cultural, religious and historical heritage as Russia. And President Putin still does not accept that Ukraine is an independent country. He has said as much publicly.
For all of these reasons, the Russian-led Customs Union cannot be viable without Ukraine. Indeed, the idea of a modern, democratic Ukraine that is part of Europe is President Putin’s worst nightmare, because eventually Russian citizens would look at that flourishing Ukraine and ask: Why not us? That’s why President Putin will stop at nothing to thwart Ukraine’s aspiration to become part of Europe.
That’s the bad news. But we also need to recognize the good news: Regardless of the short-term pain that President Putin can inflict on Russia’s neighbors, history is not on his side. The Eastern Partnership countries want the benefits of European integration – a reality that was demonstrated clearly last month when Georgia and Moldova bucked Russian pressure and signed their own association agreements.
There are also reasons for hope in Ukraine. No matter how much money President Putin commits, he cannot change the fact that a majority of Ukrainians – not just in the west, but in the south and east as well, especially amongst young people – see their future in Europe. Poll after poll confirms this, as does any time spent with young Ukrainians, who have no memory of the Soviet Union and who want everything Europe has to offer. For this reason, no Ukrainian president – not this one or any other – will ever be able to take Ukraine off the path to Europe. Doing so would be political suicide. And for Russia to insist on it would only engender the animosity of millions of Ukrainians.
The fact is, Russia is not 10 feet tall. It can’t bail out Ukraine forever. Russia’s economy is growing sluggishly, plagued by corruption and capital flight and dependent on hydrocarbons. Under these circumstances, I imagine many Russians are not too happy to see $15 billion of their natural resources heading to a foreign country in furtherance of President Putin’s selfish ideological ambitions.
So the question now is, where do we go from here?
First, we must continue to support the peaceful aspirations of Ukrainians for democracy, rule of law, uncorrupt governance, equal opportunity and integration with Europe. We must insist that the Ukrainian government uphold the human rights of all Ukrainians, especially the freedom of speech and association. And where Ukrainian citizens remain detained for peacefully exercising these basic rights, we should continue to call and work for their immediate release.
Second, we must continue to demand that all sides in the current political crisis refrain from violence, something that the Maidan demonstrators have done to a remarkable degree. Both the administration and the Congress have put Ukrainian authorities on notice that any further use of violence or other human rights violations against peaceful citizens will be met with targeted sanctions against those responsible. This is not an idle threat, and I hope we never have to make good on it. But we will vigilantly monitor events in Ukraine, and whether the demonstrations continue or not, we will be prepared to respond as necessary.
Third, we must support Ukrainian demands for accountability for those who ordered and carried out past acts of violence against peaceful demonstrators. President Yukanovych (sic) has initiated this process, and we should support Ukrainian efforts to see it through and to expand its scope where he evidence warrants.
Fourth, we must support popular Ukrainian demands for transparency on the terms of the agreement that was signed in Moscow last – this week. Many Ukrainians fear that President Yukanovych (sic) has made a decision that puts his own self-interests above the best interests of the country. And if he did, it wouldn’t be the first time. We think Ukraine’s citizens have a right to know the details of what Russia will get out of this deal.
Fifth, if Ukraine's political crisis persists or deepens, which is a real possibility, we must support creative Ukrainian efforts to resolve it. Senator Murphy and I heard a few such ideas last weekend—from holding early elections, as the opposition is now demanding, to the institution of a technocratic government with a mandate to make the difficult reforms required for Ukraine's long-term economic health and sustainable development.
Decisions such as these are for Ukrainians to make—no one else—and if they request our assistance, we should provide it where possible. Finally, we must encourage the European Union and the IMF to keep their doors open to Ukraine. Ultimately, the support of both institutions is indispensible for Ukraine's future. And eventually, a Ukrainian President, either this one or a future one, will be prepared to accept the fundamental choice facing the country, which is this: While there are real short-term costs to the political and economic reforms required for IMF assistance and EU integration, and while President Putin will likely add to these costs by retaliating against Ukraine's economy, the long-term benefits for Ukraine in taking these tough steps are far greater and almost limitless.
This decision cannot be borne by one person alone in Ukraine. Nor should it be. It must be shared—both the risks and the rewards—by all Ukrainians, especially the opposition and business elite. It must also be shared by the EU, the IMF and the United States. All of us in the West should be prepared to help Ukraine, financially and otherwise, to overcome the short-term pain that reforms will require and Russia may inflict. In short, the West must show Ukraine's leaders and people that they will not face short-term economic destruction in pursuit of a better future.
This is the challenge we now face with Georgia and Moldova, which have decided to deepen ties to Europe and the West. These countries must know that we will help them weather any loss of economic activity or energy supplies. In a sense, by helping Georgia and Moldova to meet their short-term needs during this transition, we in the West can convince Ukraine and others that they can count on us too. Ultimately, if we are committed to expanding the promise of the Euro-Atlantic community, we will have to stand up more forcefully to Russia. This is not the way it should be, and certainly not the way we want it to be.
Eastern European countries should not have to choose between good relations with the EU or good relations with Russia. That is not a choice we are asking them to make. It is a false choice, premised on an outdated, zero-sum view of the world. Unfortunately, this is exactly the choice that President Putin wants to impose on these countries. As long as this remains the case, there will be tension with Russia that no amount of happy rhetoric or resets in relations can rectify. For the past two decades, administrations of both parties have sought to cooperate with Russia where possible and compete with Russia where necessary.
The unfortunate reality is that despite our best intentions and efforts, there is more competition than cooperation. We must face this reality squarely. And we must be willing to support our partners when they face undue Russian pressure for making their own sovereign decisions. Now, many Americans will ask: Why should we care? Why should we care what happens to a country like Ukraine? Why does that affect our national interests?
Here is why: For the entirety of the last century, the United States and our friends and allies pursued the vision of a Europe whole, free and at peace. We sacrificed our resources and shed our blood for it, time and time again. And we did so not simply because this vision of Europe's future is just and right, though it is both, but also because it is the only path to lasting stability on the continent, because it benefits our people economically, and because ultimately it makes our nation safer.
Despite growing challenges in the Middle East, and Asia, and other parts of the world, we cannot forget that the work of a Europe whole, free, and at peace is not finished. This struggle continues today in Ukraine, and Moldova, and Georgia, and other countries in Eastern Europe. We must be no less committed now than before in pursuing our national interest of a Europe whole, free, and at peace—and supporting the right of all countries to share the benefits of it. That includes Russia.
This vision has always drawn Europeans and Americans, Ukrainians and Americans, together. And we see evidence of that all around us. Just a mile west of here, off Dupont Circle, is a statue of the great Ukrainian poet, Taras Shevchenko. It was dedicated nearly 50 years ago by President Eisenhower, who expressed his hope that the statue would, quote, "rekindle a new world movement in the hearts, minds, words and actions of men—a never-ending movement dedicated to the independence and freedom of peoples of all captive nations of the entire world."
After Eisenhower spoke, a Ukrainian chorus led the assembled crowd in singing one of Shevchenko's most famous poems, which concludes with this plea:
“Oh bury me, then rise ye up
And break your heavy chains,
And water with the tyrants' blood
The freedom you have gained.
And in the great new family,
The family of the free,
With softly spoken, kindly word
Remember also me."
America will always remember Ukraine. And we will always support the peaceful aspirations of her people, as we do on behalf of all people, in Europe and beyond. Thank you very much. (Applause.)
DAMON WILSON: Well, Senator McCain, thank you so much for that remarkable and very important speech, not only on Ukraine, but on Europe’s East and our strategy behind Europe, Whole and Free.
As Fred said, I’m Damon Wilson, executive vice president here at the Atlantic Council. We’ve got a few minutes to have a conversation about your trip – about the remarks that you just delivered. I want to remind everybody that they are free to tweet #acukraine, as Fred mentioned.
Senator, you’ve just delivered a speech – you laid out sort of six principles, if you will, to sort of guide our way forward as we think about Ukraine, but you offered broader remarks about Russia – about Russia’s strategy – about U.S. and European strategy and the Eastern partnership in general. And we’ve got many – (audio interference) – today, but let me bring you back to your trip for a moment.
You spent some time with President Yanukovych in Kiev with Senator Murphy. What’s he trying to achieve here? What did you take away from your conversation with him in terms of his motivation, his goals? President Yanukovych, in essence, was preparing his own country, over two years, for this process of concluding the agreement with the EU only to surprise them with this turnaround towards the end before the Vilnius summit.
How did your conversation leave you in terms of understanding, where do you think he’s trying to go? What is he trying to achieve?
SEN. MCCAIN: On Sunday night, we spent two-and-a-half hours – from 9:30 at night till after 11:00 with President Yanukovych. About 96 percent of the conversation was about the technicalities associated with the – any negotiations that he might have with Russia or with the EU. It was about one minutes’ worth of condemnation of the protestors in the square.
I got the distinct impression that President Yanukovych is either insensitive to or not concerned about or doesn’t understand the impact of a million or two, depending on what numbers you use – estimates of his fellow citizens demonstrating in a way that is peaceful, but certainly one which has to be viewed as very, incredibly impressive. I’ve never seen anything like it in my life.
I think he also, though, did realize that to out-of-hand reject membership in the EU would have been a catalyst that would have caused real disruptions, and he also, I think, realized that an announcement of agreement with the customs union would have also had that same effect. So I think he’s trying to kind of walk a middle ground here, accepting the money and a bailout, hoping that people would be satisfied with that.
Now, I don’t think they’re going to be satisfied (with ?) that, and here’s why. Membership in the EU was not what got millions of Ukrainians to demonstrate. That’s – kind of, in some ways, you could view that as a kind of a technical matter. But what membership in the EU meant was an alignment with Europe rather than Russia. It meant an outcry against the corruption that now besets the entire country – you know, that the President of the country, Yanukovych, now lives in a home that’s estimated to be a hundred million dollars. It is estimated that his son, who is a dentist, is now a billionaire. Now, I know that dentistry is a lucrative business, but – (laughter) – so – and of course, the corruption that permeates the country is something that – and they look at their lives and their standard of living versus that in Europe versus that in Russia.
And so these demonstrations weren’t just, quote, to join the EU. They were demonstrations as to what the direction and correction of the path that their country is on. That’s the only way you get people in sub-freezing weather to stand and demonstrate the way that they – that they have.
So I don’t know exactly what’s going to happen next in the short term. I would think that President Yanukovych would now back and tell these citizens that they now have significant relief from the immediate breakdown of their economy because of their economic crisis they’re in, and maybe that may satisfy some of their citizens, but I don’t think it addresses the fundamental ambitions of most of the young people particularly – all people, but in young people that I saw, I mean, there is a degree of fervor that is – and passion that is quite remarkable.
But I know one thing I am confident of, and any economist or anyone who’s aware of the Ukrainian economy will tell you, and that is $15 billion is a Band-Aid. It’s not – it’s not stopping the bleeding. And they have to enact the fundamental changes in how their economy does business, and that means compliance with the IMF demands for the fundamental changes in their economy.
And second of all, I mean, the corruption – I mean, it has got to be addressed. The corruption has got to be addressed. And they don’t see that with this agreement with Russia, and in fact, the opposite.
MR. WILSON: All right, Senator, let me pick up on that and turn to the opposition. You also spent time with opposition leaders, the three principal opposition leaders, including Vitali Klitschko and others, civil society. You’ve talked about never seeing anything quite like the energy that’s on the Maidan. We have seen a version in 2004, in the Orange Revolution. How do folks watching Ukraine, how do the Ukrainians themselves not fear a déjà vu experience of an opportunity where, in 2004, a host of leaders came to power who brought the promise and the prospect of a democratic European Ukraine, but because of infighting, because of corruption that plagued their own administration, failed to deliver on that vision and in some respects brought us to Ukraine where we are today? How did you take away, in your conversations with today’s opposition leaders how this has the potential to be different?
SEN. MCCAIN: I think that the Orange Revolution was primarily aimed at their own leadership and Kuchma’s regime and all of the things that were undemocratic. I think this, quote, “revolution” is more against Russia and a desire to join Europe, and I think there is some difference there.
And I also think that this group of opposition – Vitali and others, and the other two that you mentioned – they are in favor of freeing Yulia Tymoshenko, as I am and all of us have been, but they want that to happen after they have replaced the government. And it is a demand to have her go to Germany for medical treatment – we all know her health is very poor – but that is not the central issue as far as what their agenda is concerned. And also they have a legitimate concern about the betrayal of the revolution that, frankly, took place in 2004 and 2005, and they don’t want that to happen again.
And I have great sympathy for them and I also see that this path to democracy is a very difficult one. And we’ve seen other countries go forward and then back and then forward again. So I think they have learned a lesson from the Orange Revolution.
MR. WILSON: Senator, you made the link that if you’re sitting in Moscow, you have to be concerned, quite concerned, scared of what might be happening in Ukraine, because ultimately what does this mean about the future of Russia?
Bring us back to – you had quite strong words about both President Putin’s strategy as well as the issue of U.S. leadership on this. If this is a broader – if there are broader dynamics here in play, what do we do? What do we do with a Russia right now led by a Putin that feels confident, that is ascendant in a way he hasn’t been in the Middle East in decades, is about to host the world community in Sochi, feels as if he has the upper arm in Ukraine?
The Senate has acted and spoken with things like the Magnitsky act and others, but in addition to just calling out and complaining and putting a spotlight on what’s happening in Russia, what’s a strategy vis-à-vis Moscow, vis-à-vis Russia, long term, medium term, that can take this in a different direction, that gives hope for more than just confrontation over countries like Ukraine?
SEN. MCCAIN: First of all, could I say I appreciated – far more importantly, Ukrainian people appreciated – the statement that Secretary of State John Kerry made? That was, I think, very welcome. Second of all, I think that Toria Nuland has done an outstanding job in this whole crisis, and our ambassador there has done a fine job.
But I think that the first thing we need to do is understand who and what we are dealing with. Tell Vladimir that I’m going to be more flexible – I mean, that’s going to go down in history, along with, tell Bashar Assad the strike will be unbelievably small – that will be right up there – and, if you like your health insurance, you can keep it. Those are three – (laughter) – those are three of my favorite of recent years.
So, you know, and it isn’t just this administration. The last administration too: I looked into Putin’s eye – his eyes and saw his soul. This is not a man with a soul. (Laughter.) This is – this is a KGB apparatchik colonel who has risen to the top of a greasy pole. And we must understand who we are dealing with. All these years so that Medvedev was the guy? Didn’t anybody know that he was the puppet? Didn’t anybody know who, really, he was? The dictator for life in Russia?
And so we have to have a fundamental understanding of who we’re dealing with. That doesn’t mean confrontation. It doesn’t mean reignition of the Cold War, but it means speaking up and it means supporting people – like in Georgia right now – you know, every few months, the Russians move the fence from Abkhazia and South Ossetia further and further into Georgian territory? And what do we say? Nothing.
Do we know that Moldova is being pressured enormously – this tiny little country – and most of all, we have to understand that Ukraine – which was where Russia began in Kiev – is the key – the crown jewel to the near abroad. So what happens in Ukraine is incredibly vital. So we need to speak up for these people, as John Kerry did, and we need to make sure that they – that we’re there to assist as they make this very difficult transition, and so it’s not, again, a confrontation; it’s not tanks on the border. It’s not – but for us to believe that Vladimir Putin is going to give up Ukraine to the West without a fight and exercise many options, I think, is sheer foolishness.
So we have to understand what we’re dealing with here, and we’re dealing with an individual who wants to restore the near abroad. Ask the Lithuanians. Ask the Latvians, the Estonians, Moldovans, Georgia. Ask any of those countries in the periphery, and they will tell you that they are under nearly constant pressure from Russia and from Vladimir Putin.
So what would he do? There are many scenarios. You know, Crimea is very pro-Russian; Sevastopol is there. You could see problems there. You could see problems in the east. You could see – I don’t think it could have – obviously, Putin is not going to send in tanks, but he certainly can cause great difficulties and unrest in that country. And the best antidote is solid Western support, assistance with the IMF loans and receipt of their application – an open door to an application to join the EU.
MR. WILSON: Thank you, Senator. I don’t want to monopolize the conversation, so I’m going to turn to the audience. We’ve got, in fact, our ambassadors from Moldova and Georgia – the two countries you’ve mentioned – we’ve been focused on the pressure they’re now under and doing programming here at the Atlantic Council with them.
SEN. MCCAIN: I’m sure the ambassador from Moldova will say, buy Moldovan wine please, and next time you’re at the grocery store, buy Moldovan wine. (Laughter.)
MR. WILSON: Hear, hear. As a nonpartisan –or rather, bipartisan place, I’m going to start with the first folks I saw – a Republican and Democrat – let me turn and ask if we could have a mic up here for Bruce Jackson. Please identify yourself for our T.V. audience and keep your question brief, and then I’ll turn to Mike Hotzl (sp), who I saw second, to follow up.
Q: Bruce Jackson, Project on Transitional Democracies. Senator, in addition to the opposition and the administration, you also met with the business leaders on both sides of the issue in Kiev. You and Senator Murphy probably met with more business leaders than any senior Americans have ever done. Is there a future in Europe? Or is there a future in Russia? What was your impression of these men that play such an impact in Ukrainian politics?
SEN. MCCAIN: Thank you, Bruce. I probably should have mentioned that in my remarks. It sort of varies to the degree of which they have been affected by Russia. Now, one of the oligarchs who has had – his empire was based originally on chocolate and then, since that has been cut off – embargoed by Putin and the Russians, that has had more of an effect.
I got the impression that they’re very smart men. I got the impression that they are watching carefully the flow of events, and there have been guarded remarks supporting the demonstrators but not calling for a change in government and – or even, specifically, a change in government policy.
So I think they are going to – that they’re going to primarily weathervane as to how the course of events take place. I also think that on the one hand, they would view economic reforms as a threat to the virtual monopolies that they have in certain aspects of Ukrainian economy. But on the other hand, they see the economic benefits to being part of the EU, which dramatically are better than the economic ties to Russia. So they’re kind of balancing that out.
Do not underestimate how smart they are. We think of oligarch as some big fat guy smoking a cigar. They are not. They’re – they are – they are smart; they’re intelligent; they’ve gotten to the top of the – of the economy with fierce competition and I think that at least four of the five that I met with will go when they see which way the wind is blowing. And right now, they are not really sure.
MR. WILSON: All right. Pick up mic, please.
Q: Thank you. Mike Halso (sp), Johns Hopkins, SAIS Center. First of all, thank you for your leadership in foreign affairs, not just this past weekend but in general.
Senator, I’d like to pick up on what you said about standing up to Putin and your answer to Damon’s question and ask you to comment on a suggestion or two.
First suggestion, work with the EU for the United States and the EU jointly to bring a suit before the World Trade Organization against Russia for violating the cardinal principle of the organization; namely, that a country’s not allowed to use its economy as a political weapon.
Secondly, make clear to Putin that there’s a price to be paid for these sorts of behaviors and at least temporarily block their application to join the OECD.
Third, within environmentally acceptable bounds – and this is more of a medium-term suggestion – continue to stimulate shale gas exploration so that over time, the Russians’ chief economic weapon will be undercut.
And fourth, and this goes to a different part of Europe, but it does have to do with Russia’s behavior as a neighbor, quietly make clear to our good friends and de facto allies, Sweden and Finland, that the best way to guarantee stability in the north of Europe is to join NATO.
If you could comment on these, I’d be very grateful.
MR. WILSON: Thanks, Mike.
SEN. MCCAIN: I think on the – on the suit in the EU and OECD, I think we would have to use some powers of persuasion amongst our European friends, although they are becoming more and more concerned, as we are, when they see the events that we’ve already been talking about taking place on the so-called near abroad.
I think you touched on something really important on the, (quote ?), shale gas. We all know that the United States of America is now a net exporter of energy. We are seeing the entire equation of energy, thanks to fracking and shale gas, reversed. And this has profound impacts throughout the world, including how dependent we are on the Middle East for our energy supplies. But more importantly, I know of every expert that I’ve talked to has said that if the price of a barrel of oil goes down below $80 a barrel, then the Russian economy is in very serious trouble, that it’s hydrocarbons that are propping up Mr. Putin. And so – and I’m curious what the average Russian is thinking today about giving the Ukrainians $15 billion, which I’m sure they’re impressed with his generosity. But the – and as far as the NATO issue is concerned, I don’t think Sweden would ever contemplate such action, but I do believe that Georgian membership in NATO would have a – progress towards that would have a very significant impact, particularly in light of the new government, the peaceful transition, although not without problems, but the transition that has been made in Georgia if they renewed their application as far as NATO is concerned. I think that would have a very significant effect – Moldova the same way.
MR. WILSON: We just have a few minutes left. I want to pick up these two ladies right here, if I may – the young woman, please, first, and then Nadia.
Q: Thank you so much. Tatiana Vorozhko, Voice of America, Ukrainian Service. Thank you so much for coming to Ukraine. It’s very helpful for Ukrainian people to know that U.S. is standing by – by its side.
You mentioned the sections on those individuals who will engage in future violence. And what people in Maidan are hoping for right now – and it’s really important for them – is that EU and U.S. would be able to introduce sanctions on those individuals who are already engaged in violence and in repressions, which might be not necessarily criminal, but pressure on the business of those individuals who participate in Maidan.
And also if EU and U.S. would be able to go after the money of regime, those money which were obtained in a corrupt way in the framework of anticorruption investigations. It’s estimated that annually Yanukovich family is obtaining about 8 (billion dollars) to $10 billion from the budget.
SEN. MCCAIN: Dentistry is a very lucrative profession, yes. (Laughter.)
Q: So are there hopes – can something be done – can people – what would the answer to those people who are hoping for that?
MR. WILSON: Thank you. And let me just pick up a second question right here with Nadia back to back.
Q: Nadia McConnell, U.S.-Ukraine Foundation. Two quick points following on this about the sanctions. I’m sure you’re aware the whole issue of scapegoating. Some of what we’re seeing I think is reminiscent of what we saw under President Kuchma when our government would talk about corruption, and the answer would be that they fired some lower-level employee or mayor. That’s one.
The second is we are – there’s a lot of hand-wringing about what Russia is doing in pressuring Ukraine, but on the other hand what are we doing to express our concern about this when we hear about us purchasing Russian helicopters?
MR. WILSON: Thank you.
All right, we’ll bring both of those back to you, Senator.
SEN. MCCAIN: Good point.
Q: I know it’s been cancelled – (off mic).
SEN. MCCAIN: It was only cancelled because of Congress, not because of the administration, the purchase of the Russian helicopters, as you know.
On the issue of the demonstrators, we have been assured that those demonstrators who are under detention will be released. If there is further violence against the demonstrators, I am confident that the – that the administration and the Congress would move forward with a Minisky (ph) style of legislation if there’s further violence.
Now, as far as the reforms are concerned, I think we would – I think – I’m not sure that that would be sufficient reason to generate sanctions early enough. You pointed out that they fired the mayor of Kiev, and the mayor or Kiev had nothing to do with the violence against the demonstrators, and that’s true.
I think – I think we need to proceed carefully. We need to proceed with measured steps. We need to make sure that we are not giving the Russians propaganda that we are now intervening in the internal affairs of a country. I think we have to be very careful and measured in the steps that we take and not react in an emotional fashion.
Look, I am absolutely appalled by what Putin has done and I’ve pointed out those factors, but I think we have to be very careful that we are not appearing to be just seeking confrontation. We all know Americans are tired because of Iraq and Afghanistan, so we’re going to have to display a firm but in some ways patient addressing of our relations.
And by the way, I just want to mention again, just in the last few days literally, we now hear of missiles in Kaliningrad and we hear of a Russian decision to put missiles on rail, which obviously is a strategic move which they had rejected a short time ago. So watch – many of the things Putin is doing is extremely aggressive, not to mention Mr. Snowden, which as we know is sticking a thumb in our eye.
So I think we just have to understand who and how we’re dealing with it, but I don’t think we can portray that we’re the world’s policeman and we’re going to go around and put out every fire. But we do have to be firm and take measures, preferably – most preferably – with our allies that they support and we support, and that obviously in this case is the European community.
So I know that some people have accused me of being a, quote, “defense hawk” and all that, but I don’t – I think when we look back at other presidents, both Republican and Democrat, who have been very firm in their positions and have taken actions that are both measured and effective, that is the best way to deal with this. And I think there are some people that said that the reason why Putin is behaving like he did is because there’s no penalty for it. There should be penalties – measured and appropriate penalties – for actions that Putin takes particularly in this so-called “near abroad.”
So I really was inspired by these young people. And if there’s any doubt about how you think they feel about Russia – the leader of the demonstration, when they all turned on their cellphone lights, it was an amazing thing to see. And then the guy said, if you don’t like Russia, jump, it’s interesting to see a quarter-million people all jumping – (laughter) – jumping up and down in freezing – in freezing weather.
And we think of Ukraine – maybe some Americans think of Ukraine as kind of a far-off country. Look, they are a Western nation. These young people, they like the same lousy music. (Laughter.) They have the same atrocious attire. They are – as our young people have, they are – they are aligned with the West. They are aligned with Europe. They are not – they see Russia and they don’t want to be part of that society.
And so that’s why I am optimistic that at the end of the day we are going to see a free and democratic Ukraine, but I think right now, at this particular juncture, it might be good for us to continue our message of support for these people who are seeking a government that is free of corruption that they think truly represents them. And I don’t think that’s an outrageous stand for the United States of America to take.
And could I also – I see a lot of old friends and enemies here – (laughter) – so I want to thank all of you for being here today. And I thank you for engagement. And if there’s one thing I would like to do – and my effort is to alert the American people how important a far-away country is to America and the things we stand for and believe in.
MR. WILSON: Well, Senator McCain, if I can say, I think you accomplished just that by going to Ukraine at a critical time as developments are unfolding. We can’t thank you enough for coming back here to the council to continue to help shine a spotlight on these issues.
As Fred mentioned, we’ve had the honor of hosting the senator several times, and I will say each time you’ve done something with the Atlantic Council –
SEN. MCCAIN: Without compensation. (Laughter.)
MR. WILSON: – you’ve delivered pretty important messages, whether it’s been on the future of the alliance, in Syria, on democracy promotion itself, and now in Ukraine and Europe’s East. And for that we’re grateful. We’re grateful for your strong voice on these issues, for your principled leadership on them, and for focusing on what the trans-Atlantic community can still do together to help advance our common interests and our values here.
It sounds like you had a chance to meet Ruslana while you were Ukraine’s pop star, from the Eurovision Song Contest. As you exit –
SEN. MCCAIN: I love her music. (Laughter.)
MR. WILSON: Yeah, love – love the music. We’re playing live stream of the Euromaidan on our screens in the lobby, so if you – as you exit, take a look at what’s playing out in Kiev right now. And on this screen we’ve got some of those amazing shots of you, Senator, looking out across those hundreds of thousands of protestors with those cellphones on. So please join me in thanking Senator McCain for his time and his leadership. (Applause.)
SEN. MCCAIN: Thank you.
MR. WILSON: Thank you so much. It was wonderful.
SEN. MCCAIN: Thank you, Fred. Good to see you.