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Russia Denies Ukraine Ultimatum; Global Stock Drop; Closed Due to Snow; Israeli Prime Minister Visits

Aired March 03, 2014 - 14:00   ET

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

WOLF BLITZER, CNN ANCHOR: I'll be back 5:00 p.m. Eastern in "THE SITUATION ROOM." Thanks very much for watching. "NEWSROOM" with Brianna Keilar starts right now.

BRIANNA KEILAR, CNN ANCHOR: I'm Brianna Keilar, in for Brooke Baldwin. And this is CNN's special coverage on the crisis unfolding in Ukraine.

Russia is denying reports it's planning a full military assaults if Ukrainian forces in Crimea don't surrender. That is according to Russia's state run media. Today, a naval commander reportedly promised a, quote, "military storm" if the Ukrainian military refuses to put down their weapons in Crimea. Crimea is the heavily pro-Russian sovereign state inside Ukraine. Now whatever (INAUDIBLE) are already there taking full operational control.

Today, President Vladimir Putin watched his troops in Russia practicing. And as he bears down on Ukraine, the world is waiting to see how President Obama will live up to his word. Remember just three days ago he spoke of, quote, "costs for any military intervention" in Ukraine by Russia. Secretary of State John Kerry is heading to Ukraine's capital, Kiev, tonight. And the U.S. has just announced it won't send a presidential delegation to the Paralympics in Sochi that start on Friday.

But Obama's critics say the U.S. response has not been fast or furious enough. Senator John McCain, for instance, he spoke to CNN last hour.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: Putin wants to restore the Russian empire, which Ukraine is the crown jewel. But let's go back to peace through strength. What kind of a message are we sending when we're slashing our military?

(END VIDEO CLIP)

KEILAR: Now, we are covering this international crisis from all angles, including retired General Mark Kimmitt on military strategy, as well as CNN's Phil Black. He is in Moscow.

Phil, to you first. Help us clear up the confusion here. The question we want to know, of course, is, did Russia issue an ultimatum and set this deadline on Ukrainians if they don't swear allegiance or surrender there in Crimea? You have Russian media quoting Ukrainian defense saying this happened, but you also have the Russian defense ministry saying, no, this didn't happen. Can you try and clear this up for us?

PHIL BLACK, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, conflicting reports, Brianna. Certainly Russian media reporting that according to Ukrainian defense officials, this deadline was set, 5:00 a.m. local time tomorrow, to effectively surrender or face a storm of Russian military force in response. We've spoken to Ukrainian defense officials who say, yes, there was an ultimatum, that the commander of Russia's Black Sea fleet bordered a military -- one of the Ukrainian vessels that is blocked in Sevastopol Harbor there in the Crimea, and was told that the Ukrainian forces have three choices, they can swear allegiance to the new authority in Crimea, they can surrender or they can face an attack.

And now a denial through Russian state media from the Black Sea fleet, the Russian Black Sea fleet, that there was ever any such ultimatum. But what we're being told by Ukrainian officials is that these ultimatums have been pretty regular and pretty constant since Russian troops first showed up in Crimea at various Ukrainian military bases and installations across that region. Russian forces, they say, have been coming in saying, you've got a limited time and if you don't give up we will attack. So far those deadlines have been passing and they have not been enforced just yet, Brianna.

KEILAR: And simultaneously, Phil, you have Russian lawmakers that are drafting a law dealing with annexation (ph) territory. Tell us a little about that.

BLACK: Yes. So a group of members of the Russian parliament are coming up with an amendment to the existing law about annexation. And what this is supposed to do is define the rules, the scenario, the process whereby another country or part of another country can seek to join the Russian federation. Essentially a reverse annexation, if you like, where a part of another country can say, we'd like to join Russia. And it describes a scenario where a central government has fallen apart, it's not protecting its citizens, where international law isn't working, there's no international consensus. Under that scenario then either the people of a country or of a region would be able to hold a referendum and if the vote said so they would be able to join the Russian federation.

At the moment it is just a draft. It's at committee stage in the parliament. Not quite sure just how much support it's got, but it is absolutely drawn up in response to the events that we're seeing in Ukraine.

Brianna.

KEILAR: Crimea, of course, predominantly Russian speaking, pro- Russian. So, obviously, very specific to that. Phil Black, thank you very much.

And here with us now as well, General Mark Kimmitt, United States Army retired. He's a CNN military analyst.

Let me ask you this. So we hear these conflicting reports about whether the Russian military or the Black Sea naval commander has said, look, you need to surrender here in Crimea to Ukrainian forces. Do you read this as a sign of confusion among the Russians or are you perhaps reading this as a sign of calculation?

BRIG. GEN. MARK KIMMITT, CNN MILITARY ANALYST: Well, I think, like most military operations, there's a lot of confusion on the ground. The fact remains that the Russians have really won this chapter. They're on the ground. They virtually control everything they needed in the Crimea. I hope that they, at this point, are not going to ratchet up the situation by starting an armed conflict. That would be number one unnecessary because they have what they want and, number two, it would lead to senseless loss of life and possibly, three, escalate the situation even further.

KEILAR: So whose move is it now? And talk specifically about the U.S. when it comes to President Obama? What does he need to do? Is it his move?

KIMMITT: Well, first of all, President Obama has been very clear on two things. Number one, this is an international problem, this is not an American problem. He's trying to internationalize this problem by going to NATO, by going to the EU, by trying to bring in OSCE (ph) monitors. He doesn't want this to be his problem. He wants it to be Europe's problem. Number two, he, in my mistake -- in my view a mistake, has taken the use of military force off the table. It could very well be that military force would never be used. But why you preemptively concede that point, it's just a gigantic opening to the Russians and just says to the Russians, what you've done has been validated because nobody's going to stand up to you or even threaten to stand up to you.

KEILAR: One of the things that struck me was when President Obama and President Putin spoke on the phone. They talked for an hour and a half. That is a very long phone call, even if you're dealing with translation. What do you read into that?

KIMMITT: Well, I didn't hear the phone call, so I don't even want to begin to speculate what was said. But I think the president probably had a set of talking points prepared for him by his national security staff expressing his outrage and his concern, but also probably making it very clear to President Putin that he was not willing to put American troops on the line. And as I said earlier, that probably was just the ticket in the mind of President Putin to continue this operation without worry or concern that the international community was going to intervene to stop it.

KEILAR: Yes, your -- you consider that to be sort of opening the door and saying, sort of, come on in. You know, one of the things that we've seen, as President Obama really tries to make this more about, I guess, accountability coming from Europe and not just from the U.S. "The New York Times" is reporting that German President Angela Merkel also talked to Putin and that she came away saying that Putin has lost touch with reality. This move into Ukraine, into the Crimea, do you see it as irrational, either politically or militarily?

KIMMITT: Yes, I really do. I don't think that there's anything irrational about it. If you take a look at Russian and before that Soviet activity since World War II, they've been very specific. Any time they see a threat on their borders or they're near aboard, remember, Ukraine means the border, they've taken action. They did that in Afghanistan in '79, Georgia in 2008.

KEILAR: Georgia.

KIMMITT: They're now doing it inside of the Crimea. They did it in Hungry in the '50s. They did it in Czechoslovakia in the '60s. This is very logical and very consistent with Russian history. If their borders are threatened, they're going to take action.

KEILAR: So you don't think that he's -- the way you hear Merkel sort of state it, it's as if he's -- he's sort of had a break. He's not operating in the same reality as Germany or the U.S. Do you -- do you read it in that way?

KIMMITT: Well, what I read is that there's a belief among this administration, and possibly other administrations worldwide, that somehow we've taken a break from history. That somehow the 21st century is going to be a different century than the 20th and the 19th. I believe that Putin is acting as a pragmatist, as a realist, as the nationalist that he has been for years and years. And, to him, these activities are completely rational. And the response to him of the international community has been weak and (INAUDIBLE) and as a result he's going to move his pieces on the chess board and take those blocks.

KEILAR: General Mark Kimmitt, thanks so much for your time. Really appreciate it.

KIMMITT: Sure.

KEILAR: Now, the Ukraine crisis is triggering a global stock market tumble. You may wonder why Ukraine, a country roughly the size of Texas, matters so much to the world economy. Well, Ukraine is strategically important to the economic health of many countries. Russia's economy is very dependent on energy prices. Well, Russia supplies much of Europe's gas through pipelines that crisscross Ukraine. Now during previous disputes, Russia has cut off those pipelines causing gas prices to soar. Russia's stocks took the steepest dive in five years.

And let's take a look now at how the U.S. stocks are doing. The Dow down a little over 160 points. And let's bring in Richard Quest, host of "Quest Means Business," in London.

So, Richard, how are the stocks reacting there in London where you are?

RICHARD QUEST, HOST, CNN'S "QUEST MEANS BUSINESS": I think in all the markets you're seeing very sharp, heavy sell-offs, particularly in Germany, where the DAX index closed down 3.5 percent. Germany, of course, has huge business relations. A lot of economic interests with Russia. So if there looks to be any form of sanctions and economic effect between the west and Russia, Germany is one of the first economies that will certainly feel the pinch on this side of that. London was down 1.5 percent. Paris similarly. What you're seeing -- look, Ukraine as such economically is not materially significant in the global sense, but both because of those pipelines and because any form of economic standoff between Russia, the United States, the European Union is absolutely so serious, that is why if we look under the hood of this, Brianna, if we look under it, we're seeing all the usual effects. Gold up 2 percent. Oil up 1.5 percent. U.S. Treasuries, those last bastions (ph) of safety, the yield on that has also started to rise. So, Brianna, yes, most definitely we are seeing effects of this crisis in the economic sphere.

KEILAR: Are you thinking, Richard, that this is going to be short- term, or do you think we'll be seeing a long-term stock sell-off?

QUEST: Oh, this stock sell-off or this -- it's not -- it's not just limited to stocks. It's bonds, it's gold, it's oil, it's currencies. The ruble fell to an all-time low against the U.S. dollar. So let's call it this market volatility. Even the VIX (ph) index, which looks at volatility, was up 15 percent. This volatility will continue until there is some form of serenity and some sort of sanity. Until the markets get an idea of what's going to happen. But as the bellicosity continue to rise and the tempers and tensions get ever higher, then you're going to see more of this flight to quality, the dollar, gold, bonds, all the usual suspects, they will benefit from the uncertain nature of what's happening.

KEILAR: Richard Quest, thank you, as always, for braking it down for us.

Now, coming up, much, much more on this fast moving situation. We'll talk about what's going on inside of Vladimir Putin's head and why Crimea is so important to him. We'll be speaking live with an expert about Putin's motivations.

Now, plus, millions of Americans right now getting hammered by a nasty winter storm. We will take you live to one of the hardest hit places.

And the trial begins for the man known as the blade runner accused of murdering his girlfriend. Hear what a neighbor says she heard from Oscar Pistorius's home.

(COMMERCIAL BREAK)

KEILAR: We'll go back to our breaking news out of Ukraine in just a moment.

But first, back here in the U.S., when will it be over? That is what winter-weary folks like myself are asking. Check out this satellite picture from NASA and you can see why. You've got about 90 million people from the Midwest to the northeast dealing with yet another round of snow, ice, and freezing temperatures.

We've got a live look for you of the U.S. Capitol. Beautiful, but very cold. And this storm could bring up to a foot of snow to some areas on the East Coast. New Jersey, Delaware, Virginia, Mississippi and Tennessee, they have all declared states of emergency and school districts from Dallas to Philadelphia are closed. Two people have been killed in weather related accidents. This morning, crews had to plow Baltimore-Washington International Airport in Maryland, not far outside of Washington, D.C., and more than 2,400 flights across the country have been canceled because of this. Most are in D.C. and Philadelphia.

But the snow, it didn't stop this guy from jogging in D.C. I don't think that -- I just don't think that's a good idea. He's not really wearing enough clothes. The federal government closed here in Washington, D.C. Erin McPike joining us from this sort of snowy, cold paradise, but also it's pretty chilly out there.

Erin, Washington, we're expecting to get this trifecta of rain, ice, and snow. How long do you think this storm is going to last?

ERIN MCPIKE, CNN CORRESPONDENT: Well, Brianna, hopefully not much longer. It's been snowing off and on all day. But as you mentioned, we got rain last night, so that's why we have this slick, thick layer of ice underneath all this snow. So that's made the roads around here very slick. We've seen a lot of cars sliding on this road out here right in front of the Capitol.

As you mentioned, the federal government is closed. Monday is a very busy day in Washington. You've got lots of commuters from all over the country trying to get into Washington for the week's business to start, but that has been slowed down. Also, the White House briefing was canceled and obviously there's a lot of news going on out of Russia and Ukraine. So it's too bad that the briefing has been canceled.

But tomorrow is another big day in Washington, as you know. The president's budget will be delivered to Capitol Hill tomorrow morning at 8:00 a.m. And there's a big photo opportunity at the Dirkson (ph) Office Building. Well, we hope that they can get the entry ways to Dirkson cleared by 8:00 a.m. tomorrow so that everyone has a chance to review the budget, Brianna.

KEILAR: A lot of important stuff going on this week. We need to get that snow cleared out of Washington. Erin McPike, thank you very much.

And up next, we'll have more on our breaking news. Russia denying reports of an ultimatum that Ukraine's forces in Crimea surrender by tonight or else, or face military action.

Plus, as we speak, Israeli Prime Minister Benjamin Netanyahu meeting with President Obama and the conversation, if we've learned from the past, could get testy after an infamous interview. That's next.

(COMMERCIAL BREAK)

KEILAR: As if President Obama didn't have enough on his plate, he's hosting a very important visitor at the White House today. Israeli Prime Minister Benjamin Netanyahu, a close ally, but a leader who has never seen eye to eye with the president. That's putting it kindly, I would say. Their relationship could be even rockier after a recent interview Mr. Obama gave to Bloomberg. He left no doubt, when it comes to the Palestinian peace process, the ball is in Israel's court, saying, "when I have a conversation with Bibi, that's the essence of my conversation, if not now, when? And if not you, Mr. Prime Minister, then who? How does this get resolved?"

The two leaders are meeting right now. We should be hearing from them any moment. And the president knows that time is running out if he hopes to close a Mideast peace deal before he leaves office. Our chief political analyst, Gloria Borger, joining me now to talk about this.

Gloria, this meeting comes as the president is really facing this huge test in Ukraine.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Sure.

KEILAR: What's at stake for his legacy in that crisis and the Palestinian conflict?

BORGER: Well, you know, if you read his words that he said to Jeff Goldberg (ph) of Bloomberg, you sense a real impatience on the part of the president. You know, Secretary Kerry has been very involved in trying to jumpstart any kind of agreement here. And you get the sense that not only is he talking about Bibi Netanyahu when he says if not you, who, that he's also talking about himself and that this is a president who, you know, whose presidency has been sort of all about Islamic extremism, civil wars and he would like, as part of his legacy, to at least get something started in the intractable Mideast. So I think he's going to push Netanyahu, as you point out, they're not best of friends and I'm sure Bibi Netanyahu wasn't thrilled by that interview because it sounded like, you know, the president was giving him an ultimatum, which nobody likes. But the -- you know, it's clear the president sees the clock is ticking on his presidency.

KEILAR: And to that point, I mean we're seeing what's going on with Russia right now as a major test, Gloria.

BORGER: Sure.

KEILAR: But if you read "The Washington Post" today, the opinion section, it talks about President Obama's foreign policy, even just leading up to this point, it says that his foreign policy is based on fantasy. I mean the (INAUDIBLE) at "The Washington Post" just slams him. They say he thinks the -- he bases his foreign policy based on how he thinks the world should operate rather than on reality.

BORGER: Well --

KEILAR: The stakes here are so high.

BORGER: Well, the stakes here are hugely high. And that would be -- that would be the same complaint that John McCain is offering when he says that the administration has had effectless foreign policy. I think this all goes back to the vacillation on Syria when one day it seemed as if we were ready to intervene, and the next day the president said never mind.

Now, nobody can say with certainty what's in Vladimir Putin's head and why he did what he did. We know he has his own geopolitical reasons for doing what he did, whether there was a certain amount of willingness to do it because he thought the president wasn't going to be a strong leader or that, by the way, our NATO allies would not be strong. You know, who knows if that's a part of it.

But let me say something about domestic politics here, which is that when the president gets ready to propose a list of very strong sanctions, which I believe he's going to do, I think you can be sure that you're going to see a united Congress behind President Obama, which is something that we actually haven't seen hardly ever. And so I think what's ironically is going to happen here is that Congress and the president are going to want to be on the same leadership page here when it comes to what you can do about Russia's intervention in Ukraine. And I think that it will be conservative and it will be liberals who are going to join behind him for these strong sanctions that are actually going to have some teeth.

KEILAR: And we've heard, obviously, some criticism from people like Senator McCain but where --

BORGER: Sure.

KEILAR: As you mentioned, Gloria, also hearing from Republican Senator Rob Portman saying that there needs to be one voice here between Congress and the White House.

BORGER: Exactly.

KEILAR: So we'll see if that does play out.

Gloria Borger, thank you.

BORGER: And then it's a test -- it's a test for the president, Brianna, because then the president has to go to our allies, which he's been trying to do, Angela Merkel apparently reluctant, and get them on board. So that's a -- that's another test for his leadership here.

KEILAR: It sure is. Gloria Borger, thank you so much.

BORGER: Thanks.

KEILAR: And up next, as Russia denies setting an ultimatum for the military in Ukraine, what kind of precedent could this set around the world if countries decide to invade and conquer?

Plus, we'll take you inside of Vladimir Putin's thinking best that we can and the chess battle that he is waging right now. You're watching CNN's special coverage.

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