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Intervew with OSCE Ambassador; Crisis in Ukraine; Jobs Increase

Aired May 2, 2014 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, breaking news: deadly assault, a new offensive by Ukrainian forces triggering a fresh warning from Russia and growing fears of an all-out war. CNN is on the ground as the body count rises and this conflict threatens to tear a nation apart.

President Obama's promising to come down harder on Vladimir Putin unless the violence eases. I will ask top diplomatic insiders, will there be a dangerous showdown between the U.S. and Russia? Can this crisis be resolved?

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: And let's begin with the breaking news, the deadly violence spreading in Ukraine triggering threats and counterthreats between Russia and the West.

Dozens were killed today in clashes and a fire in one city that's become a flash point in this crisis. Tanks and troops are on the move. Two helicopters were shot down. The chaos is clearly spiraling right now.

Our senior international correspondent, Arwa Damon is standing by in Ukraine.

First, let's bring in chief national security correspondent Jim Sciutto for the very latest -- Jim.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, Wolf, today, at the same time we saw an escalation of the violence on the ground inside Ukraine, an escalation in the capabilities of the pro- Russian paramilitaries, and now an escalation in the response from the West, President Obama and Chancellor Angela Merkel vowing today that they will punish whole sectors of the Russian economy if this disruption which they charge is coordinated from Moscow does not stop before key elections May 25.

And, right now, events on the ground only becoming more alarming.

(BEGIN VIDEOTAPE)

SCIUTTO (voice-over): Every day, Ukraine looks more and more like a country at war. Here, residents cheered after two Ukrainian helicopters are shot down. Both pilots were killed.

And, here, pro-Russian militants crash with Ukrainian police. The new violence comes as Ukrainian forces launch their most intensive efforts so far to push pro-Russian militants from one eastern city that has slipped from their control.

But ethnic Russians resisted, blocking Ukrainian tanks and demanding they not advance any farther. Still struggling to devise a policy to de-escalate the crisis, President Obama met with German Chancellor Angela Merkel in Washington. Together, they set a new trigger for broader sector-based sanctions against Russia, any interference, they say, with crucial elections later this month.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If, in fact, we see the disruptions and the destabilization continuing so severely that it impedes elections on May 25, we will not have a choice but to move forward with additional, more severe sanctions.

SCIUTTO: Until now, such penalties against Russia's energy, arms, and banking sectors have been reserved for a full-scale invasion. Russia, however, remains undeterred.

Russian officials say Ukraine's military operations in the east effectively scuttle a deal reached in Geneva last month to defuse the crisis, and they called for an emergency session of the U.N. Security Council to highlight alleged threats to Russians inside Ukraine.

To reinsure the West's increasingly nervous Eastern European allies, NATO is now considering expanding and extending new military exercises in the region. Defense Secretary Chuck Hagel said, however, all members of the alliance, not just the U.S., must share the burden.

CHUCK HAGEL, U.S. DEFENSE SECRETARY: We must not squander this opportunity or shrink from this challenge. We will be judged harshly by history and by future generations if we do.

(END VIDEOTAPE)

SCIUTTO: Russia is showing no signs of the de-escalation that the West is demanding.

In fact, we are hearing and seeing the opposite. Today, Russian officials declared that agreement reached in Geneva last month to de- escalate the crisis officially dead, And the rhetoric we're hearing more and more rhetoric reminiscent to the Cold War, Russia accusing the U.S. and the CIA of being the real power behind the Kiev government, and Angela Merkel firing back that almost 70 years after the end of the Second World war, borders in Europe are again changed by someone pitting the law of the strong against the strength of the law.

And that's really the problem here, because what's happening in Eastern Ukraine is a bad precedent for the rest of Europe. Peace in Europe dependent since World War II on the sanctity of borders, you have seen that violated in Crimea. We're seeing it more and more now in Eastern Ukraine. And the stakes really high for the Germans, for NATO allies all around Ukraine and, by association, for the U.S. as well.

BLITZER: Yes, saw it back in 2008, when Russia took over parts of Georgia, still are there. That was a precursor clearly to what's going on right now.

SCIUTTO: Yes.

BLITZER: I want you to stand by, Jim. We're going to have much more on this.

But let's go to Ukraine right now for the latest on what's happening on the ground.

Our senior international correspondent, Arwa Damon, is there for us.

Arwa, what are you seeing and what are you hearing?

ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, events most certainly have been moving very quickly over the last 24 hours, Wolf, in the city of Slavyansk, the Ukrainian military beginning their operations there around 24 hours ago at this stage, at least two military officers killed when the pro-Russian militants managed to shoot down two helicopters.

According to the self-proclaimed mayor of Slavyansk, five pro-Russian militants were killed in clashes, plus two civilians, conflicting death tolls throughout all of this, the Ukrainian forces at this stage seeming only to want to move to the outskirts of the city itself, and then hold those positions, but as that was happening just a short while ago, coming under attack by the pro-Russian militants.

According to officials, at least two more Ukrainian soldiers were killed just in the last few hours. And then, of course, you have the violence that began raging in the southern city of Odessa that had been relatively quiet up until now, but earlier in the day, clashes breaking out between the pro-Russian camp and the pro-Ukrainian camp, and then a building catching on fire.

Now, during the clashes, at least three people were killed, but that building fire, Wolf, absolutely devastating, over 30 people dead, the vast majority of them because of smoke inhalation, others because they tried to jump out of the building. Unclear if that fire was as a direct result of the clashes that broke out there, Wolf.

BLITZER: Any indication, Arwa, when or if the Russians will make good on their public promises to help Russian interests, Russian speakers in Eastern Ukraine more formally, shall we say, as opposed to clandestinely or through special operations forces?

DAMON: Well, a lot of people are watching that border, Wolf, at this stage. We have not been hearing about any significant troop movement on the Russian side of it.

On the Ukrainian side, Kiev has been trying to bolster its forces, both beefing up the border guard. It's sending in additional troops. Great concerns, though, that if the Russian do decide to come across, what can the Ukrainians actually do? They most certainly will not have the military upper hand at this stage.

And that's why, of course, there are such great concerns about the troop buildup that Russia has on its side of the border. Should it decide to send its forces across, the Ukrainians are going to find themselves pretty much at the mercy of the Russian military.

BLITZER: Arwa Damon on the ground for us, be careful over there. We know some Western journalists already have been detained, Arwa Damon reporting.

Still ahead, what can the United States do to stop the violence and rein in Vladimir Putin? Two veteran U.S. diplomats, they are standing by to share their inside knowledge of the crisis and President Obama's response.

(COMMERCIAL BREAK)

BLITZER: We're back with the very disturbing breaking news out of Ukraine, the government launching a deadly new offensive to reclaim areas seized by pro-Russian militants.

According to reports out of the region, a top militant leader says the assault is delaying the release of observers from the Organization for Security and Cooperation in Europe, the OSCE.

We're joined by the U.S. ambassador to the OSCE, Ambassador Daniel Baer, along with the former U.S. Ambassador to Ukraine Steven Pifer. He's here in Washington. And our chief national security correspondent, Jim Sciutto, is still with us as well.

Ambassador Baer, what's the latest with those OSCE, those international monitors that were sent in there to do really important work, but who are now effectively being held hostage by pro-Russian militants?

DANIEL BAER, U.S. AMBASSADOR TO THE ORGANIZATION FOR SECURITY AND COOPERATION IN EUROPE: That's absolutely right, Wolf.

The latest is just that there continue to be ongoing negotiations on the ground. The deputy head of the monitoring mission, the OSCE special monitoring mission, which is separate from these Vienna document monitors under the OSCE, has been negotiating day-by-day with the self-appointed mayor of Slavyansk.

And those efforts continue. And we remain very concerned about their welfare, not only their welfare, but of the Ukrainian escorts who are with them. And we remain hopeful that they will be released in the very near future.

BLITZER: These are mostly, I take it, Germans. Is there any formal demand for their release that has been put forward?

BAER: Well, there have been a number -- they are Germans, as well as several others, Poles, Danes, several other nationalities. Czechs are involved. And there have been a number of countries that have made clear calls for their release and have been working assiduously behind the scenes to make sure that every effort is being exerted, as is it, to get their unconditional release as soon as possible.

BLITZER: Ambassador Pifer, we heard the president say and Angela Merkel, for all practical purposes, that these elections that are scheduled in Ukraine for May 25, if the Russians do anything to interfere with those elections, that would trigger more severe sanctions. Is that going to make a difference to the Russians, a threat like that?

STEVEN PIFER, FORMER U.S. AMBASSADOR TO THE UKRAINE: Well, I think it could.

These elections are really important in terms of giving Ukraine a president who's going to have democratic legitimacy, without the sort of shadow overhanging the current acting government. I think the Russians want to disrupt that election because they don't want to see a stable democratic government in Kiev. So, you're going to see the Russians causing a disturbance in Eastern Ukraine.

And that should be something that the West pushes back against, and making clear that there will be additional sanctions is one way to do it.

BLITZER: Is there real serious daylight when it comes to sanctions between the Germans and the U.S., between Angela Merkel and President Obama?

SCIUTTO: Well, I think, today, we saw less daylight than we have seen before.

There appeared to be some, because in the run-up to this most recent round of sanctions, there was talk of more severe steps than were actually taken, going after some of the more significant companies like Gazprom, the main natural gas provider. That didn't happen. Now it seems like they have come together, because, remember, as you have said and we have said many times, Germany pays the real price economically for sector sanctions.

The other point that struck me is that way it's framed now, previously, Russia had a negative obligation to avoid sector-wide sanctions. The West has said, do not invade Ukraine. If you do, we will have them. Now they have a positive obligation. They have to stop disrupting the situation on the ground, which is arguably a tougher thing to get them to do.

(CROSSTALK)

BLITZER: Ambassador Baer, you're there and you represent the United States at the Organization for Security and Cooperation in Europe.

Do you really believe, given the current circumstances, the violence that's going on, the deaths, the bloodshed, the warfare, if you will, at least in a preliminary stage, there can be free and fair elections in Ukraine on May 25?

BAER: I do, Wolf. You know, the violence or the confrontations have been fairly localized. They're obviously in a number of places. But they're absolutely necessary. And part of the message all along has been that there are certainly grievances all over the country. Everybody in Ukraine has been robbed blind by the Yanukovych government for the last few years, tens of billions of dollars.

Everybody wants a good job, a fair shake in life. And the right way to start to turn the page on the Yanukovych era and to build a new Ukraine together is through these elections. These are a first step. And so, you know, I think it is -- as Ambassador Pifer said, it's crucially important that the people of Ukraine have the opportunity to move forward together in these elections, and certainly the international community, including the Russian Federation, should do everything possible to support that opportunity for the people of Ukraine.

BLITZER: Ambassador Pifer, you were the U.S. ambassador in Ukraine. You know the country. If there were free and fair elections -- and let's hope there are -- what percentage of the Ukrainian citizenship would actually vote to split from Ukraine and become part of Russia?

PIFER: Yes, it's interesting when you look at Eastern and Southern Ukraine, which is where most Russians live.

And that's where the polls show that people are uncomfortable with the government in Kiev. But they also show that by majorities of 70 percent to 75 percent, they want a single, unitary Ukraine. They don't want to split off, they don't want to join Russia, they don't want the Russian army.

So, there's a chance, if this election can be held without interference by armed thugs in Eastern Ukraine, the Ukrainians will have a chance to express their opinion and express their vote, and that could lead to a situation where again you have a more stable government that has renewed authority.

BLITZER: And tell our viewers why you call the Ukrainian capital "Keev," as opposed to Kiev, which we have all grown up calling it.

PIFER: "Keev" is the transliteration of the Ukrainian. Kiev is the transliteration of the Russian.

BLITZER: But it's a political statement you're making by calling it "Keev."

PIFER: It's "Keev."

BLITZER: Ambassador Baer, what do you call it?

BAER: I call it "Keev" as well.

BLITZER: All right, so you're calling it "Keev" and then you're making a political statement. You're representing the United States in Europe.

Ambassador Pifer is a former U.S. ambassador. He is calling it "Keev" as well. Thanks very much for that.

Jim Sciutto, as usual, thanks to you.

Just ahead, President Obama and the new jobs report. How much credit can he claim for the credit for the strongest growth in several years?

But, first, Chris Cuomo shows us how an Olympic skier is impacting your world.

(BEGIN VIDEOTAPE)

BODE MILLER, OLYMPIC ATHLETE: Do you want it signed in a different color?

CHRIS CUOMO, CNN CORRESPONDENT (voice-over): Bode Miller was inspired to start Turtle Ridge Foundation after a close friend suffered an accident that left him paralyzed from the chest down.

MILLER: I was trying to help them get re-involved in sports. And just to watch him go through that, I saw how hard it was and how little support there was for him.

People who are in a wheelchair or handicapped, we provide the sporting equipment for them and sort of the environment that allows them to participate in whatever sport that is.

CUOMO: Once a year, skiers flock to BodeFest on Bode's home turf of Cannon Mountain, New Hampshire, for a day of fund-raising and chance for kids to race the ski icon.

UNIDENTIFIED FEMALE: He's really cool and really fast.

MILLER: These are my super-G skis. For those of you who watched the World Cup this year, that super-G for me was the best I skied all year.

CUOMO: It's also a chance to test out the latest equipment the foundation has helped develop.

UNIDENTIFIED MALE: The program has really changed my life. I never thought that I would be able to ski, but this program's really changed my opinion on the depth of sports.

MILLER: When we build some of our ski equipment and you give it to a kid who had never had the chance to go up and experience what it is to ski down a giant mountain, and you watch how life-changing that can be for them, I think it's really -- it's pretty incredible.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: New gains for the jobs market. A new report out today shows 288,000 positions were added in April. That's the strongest month for growth in two years. The unemployment rate fell to 6.3 percent, in large part because some fewer Americans are out there looking for work.

But, still, these are hugely impressive numbers.

Let's bring in our White House correspondent, Michelle Kosinski. She's joining us.

So, what does this mean for the president, Michelle? What is he saying?

MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: Hi, Wolf.

Yes, this was interesting. President Obama started his press conference today with German Chancellor Angela Merkel by talking about American job growth. But he also had a caveat.

(BEGIN VIDEO CLIP)

OBAMA: The grit and determination of the American people are moving us forward. But we have to keep a relentless focus on job creation and creating more opportunities for working families.

(END VIDEO CLIP)

KOSINSKI: Now, that is because even though those numbers look fantastic, I mean, 288,000 private sector jobs added just last month, that's enough to lower the unemployment rate overall to 6.3 percent, down about a half-a-percentage point, and those are big numbers.

But a reason for that is because so many Americans, nearly a million of them, have actually left the labor force, either leaving their jobs or giving up looking for one. So that is enough to wipe out some of the gains in the first quarter. I mean, 800,000 Americans left the labor force.

Another reason many economists are not so thrilled is because wages have also been pretty flat. Overall, though, many do see this as positive. And when you look at the bigger unemployment numbers, which include those people who have given up looking for a job, or people who have been working part-time, but want to work more, those numbers are the lowest they have been in some 20 years.

And President Obama also took an opportunity today to hit out at Congress for not acting to raise the minimum wage -- Wolf.

BLITZER: You know, Michelle, you think of that one number, 288,000 jobs added in April. They revised the numbers for February and March. Another 30,000 additional jobs were added in those months, and both of those months had pretty impressive job creation as well.

And, you know, you got to go back and think, five, six years ago, in 2008, 2009, when President Obama took office, and we were going through that major, major recession. Hundreds of thousands of jobs were being lost every month. You look at these numbers, and you say to yourself, at least it's going in the other direction.

KOSINSKI: Right, absolutely. And these are the lowest numbers we have seen, in fact, since President Obama did take office in 2008.

So economists say, you know, you always have to temper it. You have to look at a lower unemployment rate by those huge numbers of people who were just giving up because they can't find a job. But then you look beyond that, and it's the overall numbers, that slow engine that is driving some growth -- Wolf.

BLITZER: Michelle Kosinski, our White House correspondent, thanks very much.

Take a look at this video that we just are getting into THE SITUATION ROOM, a building collapse right here in Washington, D.C. Look at this. That's pretty dramatic. It's actually happened only a few blocks away from our Washington bureau here, no injuries, fortunately, reported so far, no indication anyone was inside, but obviously a seriously, serious issue indeed.

Finally, I want to say thanks and so long to our longtime producer Peter Lanier, our good friend, terrific utility player here in THE SITUATION ROOM. He's leaving us. We will miss him. We wish him, obviously, only, only the best.

Remember, you can always follow us on Twitter. Go ahead. Tweet me @WolfBlitzer. Tweet the show @CNNSITROOM.

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That's it for me. I'm Wolf Blitzer in THE SITUATION ROOM.