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QUEST MEANS BUSINESS

Update on Rusia/Ukraine Situation

Aired March 12, 2014 - 17:55:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(Majority of this program was preempted for simulcast of CNN coverage of Malaysia airliner.)

RICHARD QUEST, CNN HOST: Obviously you've been following our extended coverage on the development that Chinese satellite pictures are suggesting some form of debris floating in the South China Sea. Well, we'll be coverage that in the hours ahead.

So for the next few moments, allow me to just bring you up to day on the other business news that's happened around the world and we need to update you on how markets did trade in the midweek session. They were lower; it was a rocky session in Europe and in Asia. The Dow Jones is -- was off 11 points, barely a change really, frankly, in what was a fairly quiet session, 16,340 on the Dow.

The European markets were lower as well. Most major indices closed at their lowest level of the month. It was all the fears of a slowdown in China. The Xetra DAX losing the most of the day, down 1.25 percent.

The United States has approved a financial package for Ukraine. The Senate Foreign Relations Committee voted for a package of loans and aid. It also agreed on sanctions against Russia for its military intervention in Crimea.

Ukraine's interim prime minister has thanked President Obama for the support of the U.S. Arseniy Yatsenyuk has been meeting Mr. Obama at the White House. He's asking help for his fragile government only days before controversial referendum in Crimea on its future. Mr. Obama said Russia's incursion into Crimea violates Ukraine's sovereignty and international law.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Mr. President, it's somewhat a more pressing challenge that Ukraine faces.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: At the moment, however is the threat to its territorial integrity and its sovereignty.

We have been very clear that we consider the Russian incursion into Crimea outside of its bases to be a violation of international law, of international agreements of which Russia is a signatory and a violation of the territorial integrity and sovereignty of Ukraine.

(END VIDEO CLIP)

QUEST: CNN's Nick Paton Walsh has been to witness an extremely tense standoff between Ukrainians and Russians at a base in Western Crimea.

(BEGIN VIDEOTAPE)

NICK PATON WALSH, CNN SR. INTL. CORRESPONDENT: Stuck out in Crimea's windswept Northwest, these Ukrainian soldiers are edgy, weapons loaded, defenses laid. Here's why.

Two masked soldiers approach fast. They say nothing but:

UNIDENTIFIED MALE: (Speaking Russian.)

WALSH: The captain tells me the soldiers have told him they're Russian but haven't spelled out their demands.

A second truck of Russians moves in, its soldiers fanning out.

The base calls its soldiers to their positions, ready to defend.

Four Russians have moved along down the side fence near the base. Then the Russians make their clearest threat, placing a heavy machine gun in front of the gates.

Meters apart, weapons loaded, Ukrainians isolated from their leaders in Kiev; Russians, whose very existence here is denied by the Kremlin. Just the kind of standoff that everybody has been fearing in Crimea, Russian troops heavily armed with machine guns there now, meters away from Ukrainian soldiers, their weapons loaded, ready to defend the base.

Suddenly the Russians pull back. Some locals are more sympathetic to the Russian troops than the Ukrainians, many of whom actually live in the village. And these ask us to leave.

But the show of force isn't over yet. This helicopter has a red staff (ph) on it, consistent with Russian military markings. Increasingly bold as the referendum with the Crimea becomes part of Russian nears, the soldiers gather here beneath the Russian flag, probing the readiness of those beneath the Ukrainian flag to die so far so isolated from their cause and commanders in Kiev.

(END VIDEOTAPE)

QUEST: Nick Paton Walsh reporting.

I'm Richard Quest. We'll have more coverage on the developments in Malaysia Airlines 370 after the break.

(MUSIC PLAYING)

END