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Russian Troops Fire Warning Shots; Kerry Remembers Slain Protesters In Kiev; Russia: No Talks With Ukraine; Russia: China Supports Its Actions

Aired March 04, 2014 - 10:00   ET

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

(COMMERCIAL BREAK)

WOLF BLITZER, CNN GUEST ANCHOR: Good morning. I'm Wolf Blitzer in Washington in today for Carol Costello. I want to welcome our viewers in the United States and around the world to our breaking news coverage of the crisis in Ukraine.

We begin this hour with Russia's invasion of neighboring Crimea. In Moscow, the president, Vladimir Putin, he is digging in on the front lines and tensions are ratcheting up. Russian forces fire warning shots as unarmed Ukrainian troops try to approach them. It's a fascinating and unsettling exchange. We want to show you exactly what was said.

Follow along with the subtitles. One Russian soldier warns he'll shoot. A Ukrainian response, America is with us. Another Ukrainian pleads would you shoot the Soviet flag and then asked to speak to the commander so they can negotiate. Frustrated Russians tell the Ukrainians to return to their base and accused them of stirring up trouble.

Even though the Ukrainians are unarmed, the Russians warned that they will shoot their legs if they keep advancing. Russian president, Vladimir Putin, says even though the action has been peaceful, force will, repeat, will remain an option. He says Russia has no plans to make Crimea a part of Russia.

Also new this morning, the Secretary of State, John Kerry, arrives in Kiev to discuss U.S. financial help for the beleaguered nation. And in Washington, it's sending a message to Moscow suspending planned U.S./Russian trade and investment talks.

All that coming up, but first U.S. stocks right now. They are in fact making a major comeback today. The S&P 500 just hit a new record high only one day after suffering major losses as a result of the crisis in Ukraine. Let's go to our chief business correspondent, Christine Romans.

Christine, what's behind the bounce back today? How do the markets look right now, nearly 200 points up for the Dow Jones?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: It's a very solid performance from the market even as it is still very troubling what's happening between Russia and the west, and what's happening in Ukraine. You laid out very nicely all of those developments, Wolf, to our viewers.

Let me tell you the two things that stock investors and markets around the world are really watching. First, the Russian troops were told after their military exercises, they could go back to their barracks. That was done. The military exercises over. That was what really spark triggered the beginning part of the rally.

And then in that press conference, when the Russian president, Vladimir Putin, addressed Russian reporters, about four or five hours ago, he very simply said, we have no plans to annex Crimea. That was the second trigger that sent markets up higher around the world. The Russian stock market recovering about half of yesterday's losses.

But really here in the U.S. is where you are seeing a lot of the actions and why. Well, a lot of money managers and a lot of market watchers and economists are telling me the more uncertain things get between say, Russia and China, China and Europe, if China were to become a player in all of this, between Ukraine and its neighbors, then you have a situation where the U.S. Is the best investment in town.

You will start to see instability around the world actually be just another reason to buy U.S. stocks if you are an international investor. So that's the story line today. Let me caution you. I expect it will be very volatile over the next few days.

We have a jobs report on Friday. If for example, diplomacy would take a different turn, you could see the market take another turn very quickly. Remember, this market has been up for five years almost straight. So there are some who say it feels a little long in the tooth here. But at least, for now, Wolf, look at that, the Dow up 177 points. A record high for the S&P 500. We have never been this high in the S&P 500.

BLITZER: As you correctly point out, the next few days, they'll could be a little bit of a roller coaster as we have seen yesterday and today. All right, strap yourself in. Christine Romans, thanks very much.

This morning, in Kiev, the secretary of state, John Kerry, toured Independence Square. That's the site of the anti-government protest that ousted Ukraine's president.

Kerry lit a candle. He laid roses at a memorial honoring the dozens of protesters who died in violent clashes with police. He is in Kiev to pledge U.S. support for the fledgling government there. CNN's Matthew Chance was on the scene for us. He is still there. He is joining us with more. So tell us how it went down -- Matthew.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: This was a pre-planned visit by John Kerry to this Independent Square where you can see the barricades that were once the scene of pitch battles between the protesters here in the Ukrainian capital, Kiev, and the authorities of President Victor Yanukovych, now ousted as the president. Have now been converted into these very emotional memorials, of the dozens of people, nearly 100 people, in fact, who were killed by snipers and other means by the authorities that tried to push for the overthrow of that regime. You can see people have laid flowers. Religious icons and emotional poems as well that have been left by various people.

This is a little ribbon of the European Union indicating the pro- European stance of these protesters. It underlines, of course, how much suffering and pain the protesters here in Ukraine went through in order to achieve the ousting of Victor Yanukovych.

Of course, the consequences of that are still being played out in Ukraine, in Crimea, rather. John Kerry, the U.S. secretary of state, came here to pay his respects. I had a chance to squeeze in a quick question with him. He was surrounded by reporters. Take a listen to what he said.

(BEGIN VIDEO CLIP)

CHANCE: What's your reaction to this scene?

JOHN KERRY, SECRETARY OF STATE: It's very moving, very distressing and inspiring.

CHANCE: Do you think that Ukrainians paid too high a sacrifice?

(END VIDEO CLIP)

CHANCE: He wasn't able to give me an answer on that. He was moved on by his press people to speak to members of the Ukrainian interim administration to discuss what concrete measures the United States is prepared to offer coinciding with his visit. The United States said it would give a billion dollars in credit to help the Ukrainian authorities deal with their immediate financial concerns.

It's also to give expertise to help the finance ministry and the central bank sort of plan the economy ahead of a much bigger sort of order of the country by the International Monetary Fund to see how much money the country needs, which is, you know, virtually bankrupt to get by the coming months -- Wolf.

BLITZER: Yes, the $1 billion in U.S. loan guarantees means that the Ukrainian government could go borrow the money if for some reason they weren't able to pay it back, then the U.S. would be on the hook to repay those loans, but the U.S. Treasury would be guaranteeing that those loans would be repaid.

All right, thanks very much, Matthew Chance, for that. We heard tough words from Putin this morning about the crisis in Ukraine. Breaking his silence, the Russian leader defended the invasion calling it a humanitarian mission. He says Russian lives are being threatened in the country led by an illegitimate president who only came to power as a result of a coup.

(BEGIN VIDEO CLIP) PRESIDENT VLADIMIR PUTIN, RUSSIA (through translator): Whether this is legitimate parliament, partly, yes, but the rest of them are not. The executive -- the acting president, of course, is not legitimate. The legitimate president is only Yanukovych.

(END VIDEO CLIP)

BLITZER: The illegitimate president. He says Yanukovych, the ousted president, that according to Putin. World leaders are slamming Putin's actions on the heels of the German chancellor reportedly saying Putin is living in, quote, "another world."

Former Secretary of State Madeline Albright called Putin an and I'm quoting her now, "delusional" when she was on CNN earlier today.

(BEGIN VIDEO CLIP)

MADELEINE ALBRIGHT, FORMER SECRETARY OF STATE: He is living in some other world. I think that either he does not have the facts, he is being fed propaganda or his own propaganda. It doesn't make any sense. There are no calls for assistance. There is this not kind of a crisis in terms of the way the Russian-speaking people are in some way being harmed. So this is all made up.

I think it is part of a much longer-term plan, that Putin has had, which is to try to recreate some form of relationship between Ukraine and Moscow. I think that is the tragedy that is going on. Putin, is, in many ways, I think, delusional about this.

(END VIDEO CLIP)

BLIZTER: Strong words from Madeleine Albright. CNN's Phil Black is our reporter on the scene in Moscow for us. Phil, you were listening to that lengthy news conference by the Russian president. Give us your take.

PHIL BLACK, CNN CORRESPONDENT: Wolf, this is the Putin view. He believes that new government in Kiev is illegal. He believes that they are supporting armed groups of ultranationalists who are violent and threatening. Ethnic Russian groups in the east of the country and he says Russia has the right to use military force to go in and crush those groups and protect the citizens if they need to do so.

In Crimea, there is a very clear Russian narrative now developing. Vladimir Putin denies that there are Russian soldiers in Crimea securing that region. His view is that these are local defense teams, effectively, local militias, who are concerned about what's happening in Kiev, rejecting the new government that is trying to hold the country together.

What you are seeing is a local grassroots rejection of all of this and a movement. We've heard from the local parliament, a design on whether to vote whether or not Crimea should go it alone. That points to a scenario, down the track, where the locals do vote to go it alone, do vote on greater independence. And in that situation, I think it is very likely that Moscow would then encourage the international community to respect, to understand and accept that democratically expressed will of the people to determine their own future and set up an independent state.

Today Vladimir Putin said this is not a land grab. He is not interested in annexing parts of Ukraine. That doesn't rule out an intention to effectively set up Crimea as something close to an independent state, albeit one that is heavily dependent and very closely aligned with Moscow.

BLITZER: Phil Black in Moscow for us with the latest on that front. Phil, thanks very much. We are getting some new developments right now. First here on CNN, Russia getting ready to saying it is declining, declining to participate in talks with Ukraine.

Our foreign affairs reporter, Elise Labott, is traveling with the Secretary of State John Kerry. She is on the phone with us right now. You are in Kiev, right, Elise?

ELISE LABOTT, CNN FOREIGN AFFAIRS REPORTER (via telephone): That's right, Wolf. I am with Secretary Kerry. He is meeting now with leaders of the Ukrainian government and the Rada, the Ukrainian parliament.

BLITZER: So give us the headlines, what are you learning?

LABOTT: Well, basically, you know, Wolf, the U.S. has been trying to get Russia to have a diplomatic solution to end this crisis. Now, what I'm told is the U.S. wanted to get together a meeting of this so- called 1994 Buddha pest amendment. They signed an agreement in which they would basically -- Ukraine would end its nuclear program and give up its nuclear weapons and Russia would guarantee Ukrainian sovereignty.

That's what the U.S. has been saying now. This agreement, Wolf, is not binding, but the U.S. has been saying that Russia is violating this agreement as part of international law. I'm told there will be a meeting in Paris. The U.S. had hoped that all four countries, the U.S., U.K., Ukraine and Russia would be taking part.

But I'm told that Foreign Minister Sergey Lavrov has declined the invitation citing a schedule conflict, but ironically, Wolf, Mr. Lavrov will be in Paris tomorrow for a donor's conference on Lebanon. The U.S. had also hoped that Secretary Kerry would be meeting with Foreign Minister Lavrov while they are in Europe.

So it remains to be seen whether Secretary Kerry will meet with Mr. Lavrov separately, but it doesn't look like Russia will be taking this diplomatic off ramp as part of the meeting. The U.S. hoped that Russia, Ukraine at the table would move things along. Doesn't look good -- Wolf.

BLITZER: It doesn't look at least for now. Elise Labott traveling with the secretary of state, John Kerry, in Kiev. Let's get some analysis now on what's going on. Joining us now, Ambassador Christopher Hill, he is a retired U.S. diplomat. He is now the dean of the Josef Korbel School of International Studies at the University of Denver.

Ambassador, thanks. What do you make of this latest development that Russia has declined this invitation, this recommendation, to go ahead and sit down with the government in Ukraine and see if there could some diplomatic solution?

CHRISTOPHER HILL, DEAN, JOSEF KORBEL OF INTERNATIONAL STUDIES, UNIVERSITY OF DENVER: Well, I think the problem right now is the Russians are calling the Ukrainians an illegitimate government. It is kind of problematic to sit down with them in the next day. I do believe that there is some real hope for diplomacy, especially between the United States, the European Union on one side and the Russians on the other.

I think what the Russians have done is put tress the forces of the Ukrainian nationalists. They have to be looking for a way out. The issue is whether they are going to try to make Crimea, what they gain from this whole mess. That's something we don't want to see. It is going to be tough in the days and weeks ahead especially if the Crimean go ahead with some type of resolution or referendum that would set them up to joining the Russian federation.

That's the real danger right now. I think we also need to bear in mind that there is a chance any minute that there could be some crisis in Eastern Ukraine. Then, we are in a whole new world of hurt.

BLITZER: How difficult will it be for the president, the American president shall the U.S. administration, to get all the allies, the NATO allies, the European allies, everybody on board the same panel?

HILL: The think the Obama administration has done very well about that. Today, the issue you has been more sort of should we participate in preparatory meetings for the G-8. What kind of level of sanctions should we seek, et cetera? This is fairly low-hanging fruit.

I think the issue would be if the Russians get into a kind of shooting war with the Ukrainians, if they start to objecting pay eastern Ukraine or worse yet, use the excuse that they are these militia groups, which, by the way, for those that went through the whole Bosnian scenario, this was classic Serb stuff.

One worries about that kind of talk coming from the Russians. This is quite a difficult proposition. I would like to make a couple of points. One, I think the Obama administration has done a pretty good job of internationalizing the issue and therefore, you know, some of the political critics might want to cut the president a little slack in the middle of this crisis. There will be plenty of time to go over this in the future. This is a full-blown crisis with a great power like Russia and our president and administration is trying to deal with it.

I hope we can dial it down a notch here in the U.S. I was very impressed with Eric Cantor's statement the other day coming out of the house majority leadership office to say that the Republicans there will work with the Democrats on sanctions, et cetera. I think we need a little more of that.

Secondly, I think the Ukrainians are going to have to step it up a little. You know, for 20 years, we have had Ukrainian dependence, which has been characterized by Ukrainian political crisis and economic crisis. So I think we need to see a little more from the Ukrainian side as well.

BLITZER: I take it you are less impressed by the comments of Senators Lindsey Graham and John McCain. But let me ask you about Madeleine Albright, you worked with her, the former secretary of state. Do you agree with her? You are no longer in government. You are a dean of a major school of international affairs at the University of Denver so you could be blunt. Do you agree with her that Vladimir Putin is, quote, "delusional?"

HILL: Well, I haven't met him. I haven't seen him in his state. But I can tell you when we used to deal with Milosevic, he would get his war paint on and there is nothing you could say to talk to him. He had this alternate sense of reality. I wouldn't be surprised if we are seeing a little bit of that from Putin.

Certainly, that was the message from Angela Merkel having talked to him to say that you know he seemed to be living in another world. This is what often happens with these guys. Their advisers are not known for giving them contrarian advice.

They get a call from someone in the west and they seem to be in an entirely different world. I think that might be an accurate, if not clinical, an accurate description of his state of mind.

BLITZER: Well, I know you are not a psychologist or a psychiatrist. You can't give us a clinical definition, but I get the point of what you're trying to say. Ambassador, as usual, thanks very much.

HILL: Thank you.

BLITZER: Chris Hill joining us from Denver. Still to come, the Obama administration under heavy scrutiny for its handling of the situation in Ukraine. We are going to the White House for the latest when we come back.

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BLITZER: A $1 billion loan guarantee to help try to shore up the Ukrainian economy, just one way the U.S. is stepping in to offer some financial aid amid the upheaval in the region. The offer comes amid heavy criticism for the Obama administration and its handling of overall the situation.

Our White House correspondent, Michelle Kosinski, is joining us now from the White House. What are you hearing over there?

MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: Hi, Wolf. We heard this morning, you know, Russian president, Vladimir Putin, caused quite a stir with that lengthy explanation of why he is doing what he is doing. So far the White House hasn't responded specifically to his words. The world has been watching the U.S. reaction to this crisis, debating what should the extent of it be and how will what the U.S. does or doesn't do affect foreign policy in the future?

(BEGIN VIDEOTAPE)

KOSINSKI (voice-over): These tense days, almost unbelievable to watch, Russian troops continuing their move into Ukraine, tough talk by the Obama administration.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: Russia is on the wrong side of history on this.

KOSINKSI: Followed by harsh criticism of the president's handling of the crisis.

SENATOR JOHN MCCAIN (R), ARIZONA: This is the ultimate result of effect less foreign policy where nobody believes in America's strength anymore.

KOSINSKI: It has also stoked anger over the red line Syria's Assad crossed last summer and his regime used chemical weapons killing hundred.

MCCAIN: When the president of the United States says that that president is going to take military action and does not, that sends a message.

KOSINSKI: And anger over President Obama's efforts to cut defense spending. Other members of Congress on both side of the aisle. The House majority leader, the chairman of the Senate Foreign Relations Committee are looking for possibilities for taking matters into their own hands, to sanction Russia now, hit Putin where it hurts in the Ruble, which continues to sink steadily.

An aide to Republican Senator Bob Corker says he wants by partisan work this week to develop legislation that will support an urgent, forceful U.S. Response, forceful politically and economically that is. Even McCain can see there isn't a military option right now.

But that the most powerful nation in the world should have plenty of options. Some feel what that is being done in steps, cancel meetings, now ending trade engagement with Russia, and still is not enough. Others like Senate Majority Leader Harry Reid, stress a united front.

SENATOR HARRY REID (D), MAJORITY LEADER: What I'm going to recommend is that anything that we do would be in coordination with our allies.

(END VIDEOTAPE)

KOSINSKI: Last night, President Obama met for more than two hours with Secretary of State Kerry, the secretary of the Treasury, chairman of the Joint Chief of Staffs. We've been hearing for days this buzz about sanctions. You know, that's still just a possibility at this point, but one that the White House has been actively preparing for. Even in the White House summary of what happens during that meeting, the administration emphasized that Putin still has a chance to de- escalate the situation before he does face more repercussions. Although at this point, there seems to be no sign of de-escalation -- Wolf.

BLITZER: No, if anything, it's the opposite direction at least for now. Michelle, thanks very much. Michelle Kosinski reporting for us from the White House. Let's turn to international security analyst right now. Jim Walsh is a research associate at MIT Security Studies program. Thanks so much for joining us. So deploying sanctions as a tool, as a potential weapon, would this work in this current crisis?

JIM WALSH, INTERNATIONAL SECURITY ANALYST: So who would call for greater sanctions, which I would certainly support, unilateral sanctions, the U.S. doing it lean, won't mean very much. It has to be a collective action. As you can see some of the Europeans are a reluctant about this.

And finally concert with our allies, Germany and others. Some of the Europeans are a bit reluctant. The urge is to push back and to punish. That's reasonable and good policy but how can we take advantage of it? It is not always hitting them with a stick.

Sometimes it is taking advantage of the errors. They are going to want to be drawn toward the U.S. They are going to want to be drawn towards the European Union. We can take advantage in a way that helps us. That's a whole separate avenue of policy making.

BLITZER: What are you recommending? How should the U.S. do that?

WALSH: I would think, we had an op-ed. There was an opinion piece yesterday in the "Washington Post" by former ambassadors to Ukraine. I thought it was very wise. There are several things we can do. We can begin to step up conversation between the E.U. and NATO and the Ukraine. We have to do that delicately, but we can do that.

Help Ukraine consolidate. Western Ukraine has to be very angry about what's happening. That's an opportunity politically to get that government consolidated. The ambassador has recommended inviting international monitors along the border. I think that's a terrific idea. The Ukrainian government needs to issue a statement saying no Ukrainian of Russian dissent or who speaks Russian, they don't fear anything.

Everyone in the Ukrainian society is equal. We are going to treat them with respect. Each of those steps makes it more difficult for the Russians and increases the possibility that we can get a Ukrainian government consolidated. I hope there is not a war or more conflict. The reality is, it may be military that fights them but it is government that wages them. This government is a week old.

It is in no position to carry an armed conflict. Job one is trying to help the Ukraine consolidate the government. That's the most important task right now. BLITZER: What do you make of the Russian statement that China supports Russia's actions in Ukraine? China, like Russia, a permanent member of the United Nations Security Council.

WALSH: You know, I think China is going to try to stay out of this one. It brings different competing interests for Chinese foreign policy. On the one hand, China has always had this long standing policy of non-interference in other country's affairs. Don't bother us and we won't bother you. That's been very convenient for them and an excuse not to get involved when there is an international crisis. But let's also be clear that during the history of China. They have been happy to intervene militarily on their borders.