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Russia Facing Historic Economic Sanctions; Russia Shelling Ukraine. Aired 1-1:30p ET

Aired February 28, 2022 - 13:00   ET

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

[13:00:00]

ANNOUNCER: This is CNN breaking news.

ANA CABRERA, CNN HOST: Hello, and welcome to our viewers in the U.S. and around the world. I'm Ana Cabrera in New York.

ANDERSON COOPER, CNN HOST: And I'm Anderson Cooper in Lviv, Ukraine.

Crucial talks between Ukrainian and Russian delegates are now over, but the shelling and the bombings continue. Explosions and air raid siren sounded east of Kyiv's city center just as those discussions wrapped up.

A senior U.S. defense official says that Russia could start taking a more aggressive approach, in their words, towards the capital city. In Karine, a Russian rocket attack targeted a residential neighborhood, leaving one civilian dead and 31 injured.

Before the smoke even cleared, Russia's Vladimir Putin told France's Emmanuel Macron that the Russian military doesn't pose a threat to Ukrainian civilians. But we know that is not true, a senior U.S. defense official telling reporters that Russian forces are striking civilian targets.

We still have a lot to learn about those talks. But we do know that the pressure is building on Vladimir Putin from all sides, his forces facing fierce resistance on the battlefield and Russia's economy facing a financial meltdown.

We're covering this across the globe.

Fred Pleitgen is live in Belgorod, Russia. Alex Marquardt is in Kyiv for us at this hour.

Let's start with you, Alex.

What can you tell us about the loud explosions just outside the capital?

ALEX MARQUARDT, CNN SENIOR NATIONAL SECURITY CORRESPONDENT: Well, Anderson, after an unusually quiet day, we heard those explosions just as we got word that those talks were coming to an end.

Now I'm not saying that those are connected, but it was certainly notable. We heard from here three loud explosions. We have been able to pinpoint at least one of them coming from the northeastern part of Kyiv about 11 miles away, so 18 kilometers. That's pretty close in an area of town called Brovary.

We have been told, thankfully, no one was killed, but that there were six wounded. Now, at the same time, we have been able to verify new video from Ukraine's second biggest city, Kharkiv, where there has been heavy Russian shelling there today, that city just 20 miles from the Russian border up there in the northeastern part of the country.

And this was a residential neighborhood that was hit with multiple rockets. We're told that they landed near a supermarket in an area called Saltivka. So, Anderson, Russia clearly not letting up in their offense, but, at the same time, we have seen significant defense, of course, by the Ukrainian forces. Here around Kyiv, at least two Russian columns were torched and destroyed over the course of the past two days.

One thing that is increasingly worrying that we're keeping a very close eye on is this Russian convoy coming at Kyiv from the north that's about three miles' or five kilometers' long. They do appear to be getting closer, Anderson. Of course, Kyiv would be the top prize for President Putin, who is looking to, we believe, encircle this city and, of course, topple the government -- Anderson.

COOPER: And let's talk about the talks that took place along the border with Belarus.

Any indication that progress was made.

MARQUARDT: Well, progress was made in that they didn't fall apart. So that's good, right? I mean, these were five hours of talks. No one went there for the sake of it and then walked away.

This was not the two presidents meeting on this border. But they did send senior level delegations. An aide to President Putin was there, an aide to President Zelensky, as well as Ukraine's defense minister, both sides saying that they are open to new talks in the coming days, both sides saying that they mapped out areas for further discussion.

Ukraine went into those talks saying, what we are demanding is that there's an immediate cease-fire and that Russia withdraws their troops. Russia certainly did not agree to that just yet, so it's too soon to say that there was progress.

But there -- but there's no evidence that the fighting is going to stop in the meantime -- Anderson.

COOPER: Want to go now to Fred Pleitgen.

Fred, from your vantage point, on the Russian side, Russian forces, you have been seeing them advanced. Obviously, they're advancing much slower within Ukraine than they had anticipated, that they had planned. What have you been seeing today on the Russian side of the border?

[13:05:10]

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hi there, Anderson.

Yes, one of the things from our vantage point that we have here on the Russian side of the border, because we are very close to that front line in Kharkiv where a lot of the really heavy fighting really was taking place today, is you can see some of the moves the Russians are making there that then translate into some of the things that happen on the battlefield in Kharkiv.

Specifically, today, what happened is that Kharkiv, some of the civilian areas there were apparently shelled. And what we saw on our side of the border, again, directly close to the front line, was multiple rocket launchers firing a lot of salvos there. And then we also saw some of those multiple rocket launchers -- they're called the Uragan rocket launchers -- being moved closer to the front line, closer towards Kharkiv.

Now, we ourselves saw and filmed at least three of these very large rocket launchers moving closer towards the border area and also a loading vehicle moving closer to the border area as well. The other thing that we're also seeing, Anderson, we also have to say, is, the Russians are moving a lot of forces around on the Russian side of the border, but some of their gear seems to be breaking down.

We actually saw one Russian rocket launcher that seems to be broken on the side of the road with the crew trying to fix it, and even a howitzer that seemed to have toppled over on the side of the road, almost like it had fallen into a ditch. Those are the kind of things that we actually see quite frequently, Russian gear that seems to be breaking down before it even reaches the front lines, a lot of trucks, for instance, that also need to be towed as well.

But one thing that we definitely need to point out, Anderson -- and that is really important -- is that the Russians still have a lot of gear on the side of the border. They are still able to escalate the situation, if that's what they choose to do, especially in the sort of villages that are around that final checkpoint.

As you get towards Kharkiv, towards that very hot front line, there certainly are still a lot of tanks, there are a lot of armored vehicles there, howitzers and other very heavy equipment as well, Anderson.

COOPER: Yes.

International condemnation and sanctions have been growing against Russia. For that, let's get back to Ana Cabrera in New York -- Ana.

CABRERA: Anderson. Thank you. Thanks to our reporters there. We will check back with all of you there in Ukraine in a moment.

But I do want to talk about what is happening off the battlefield as well, this economic war that is raging. A short time ago, notoriously neutral Switzerland took the remarkable step, adopting the same sanctions as the European Union, targeting Russia, which means freezing the assets of several Russian oligarchs that are held in Swiss banks.

And also, today, the White House has gone after what it describes as Russia's rainy day fund. The Kremlin claims Vladimir Putin himself is -- quote -- "indifferent" to personal sanctions.

CNN's Phil Mattingly is joining us to break down the costs that are piling up for Russia.

Let's start with the administration's aggressive move on Russia's Central Bank, Phil. What exactly does that do?

PHIL MATTINGLY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yes, Ana, this is the most dramatic step yet. There's no question about that.

And the fact a coalition of Western countries, as well as some Asian countries, Japan in particular, all coming together to agree on the most dramatic sanctions that I think, if you were to talk to officials just five or six days ago, weren't viewed as on the table underscores the significance of this moment when it comes to financial markets and the repercussions.

I want to start, as you noted, with the Central Bank, the decision today by the U.S. and the E.U. to freeze all assets from the Russian Central Bank, either in dollar denominations, E.U. denominations, or in U.S. or E.U. countries, any transactions with those countries as well in the -- in dollars or E.U.s is significant.

It further isolates Russia from the financial system. Think of the Russian Central Bank as kind of the heartbeat of the Russian financial system. Primarily -- and I think this is, when you talk to officials, what they're pointing to most -- over the course of the last several years, President Putin has built up the fourth largest foreign currency reserve in the world, 630-plus billion dollars.

And part of the reason that decision was made was to try and insulate from Western sanctions. Essentially, this would allow them to prop up their own currency. This would allow them to provide liquidity to their banks. This would allow them in some quarters to be viewed as sanctions-proof.

No longer, when you go directly at the Central Bank and start to freeze assets across the globe. Now, when you want to figure out how rare this is, to target a country's Central Bank, look at the countries that have been targeted before, Venezuela, Iran, Syria, all viewed as malign actors.

The difference here perhaps more than anything else, no country the scale of Russia's economy, $1.7 trillion, or the integration of Russia's economy has ever been targeted with sanctions like this before. It just underscores the moment we're in right now and the scale of the response, Ana.

CABRERA: The economic impact continues to pile. As we mentioned, this is on top of the growing list of other sanctions and restrictions. What are some of those other sanctions and the impact that they're

having so far?

MATTINGLY: Yes, I think this is a great point, because as dramatic as the Central Bank actions were, it can't be viewed in isolation.

It's almost part of a quilt of a sanctions regime that is really taking a full-blown bite out of the Russian economy. You obviously have the Central Bank actions. You 'have export controls, not just by the U.S., but by a coalition of countries.

What that does is that basically shuts the door to what certain technology that is critical for Russian industries, like defense, like aerospace, like biotech. Russia is a low-productivity economy. They don't make these things. If you cut off access to those things, over time, it will atrophy the industrial base.

[13:10:13]

As you noted, President Putin, Sergey Lavrov, the foreign minister, all sanctioned on an individual basis, as well as top Putin allies and some of their family members. Russian banks will be expelled from SWIFT.

Now, it's not the entire Russian economy taken off of this kind of backbone of global markets and trades. It's a messaging system. But taking banks off, in coordination with the bank sanctions that have been applied over the course of the last couple of days, will essentially decimate those financial institutions inside of Russia, and they no longer have the lifeline in the Russian Central Bank. As it attempts to prop up its own currency, the ability to deploy liquidity is severely limited.

Obviously, state-owned companies, they're banned from financing on the U.S. side of things, on the E.U. side of things as well. Outside investment is critical to their survival. And, also, we're seeing Russian aircraft banned, the E.U., Canada, potentially other countries in the days ahead.

You get a full sense of why the effect has been so dramatic, the ruble just cratering over the course of the last couple of days. Obviously, increasingly isolated from the world economy, Russia had its lowest day on record in the stock market on Friday. Today, it's closed.

The potential for run on banks. We have seen the lines in Moscow of people trying to get their money out. That is expected to only increase in the days ahead as the sanctions fully are implemented, Ana.

CABRERA: And the Kremlin, again, trying to sort of brush off this idea that Putin himself is sanctioned.

But we are starting to hear some grumbling from Russian oligarchs, who are very powerful in the country. Tell us more about that.

MATTINGLY: With good reason. And here's why. When you sanction an individual, obviously, Vladimir Putin doesn't have a J.P. Morgan account and a 401(k), necessarily, right? And so the actual impact from an individual country unilaterally sanctioning or freezing the assets of a world leader or some of the top oligarchs has been questionable.

Their finances are opaque, buried in specific places. Now, when you put together a full coalition of countries who are making clear they will go after yachts, they will go after apartments, they will go after property, you have major problems if you are one of the Russian oligarchs who has planted a lot of your money in those types of assets. Those are now all in play.

Today, we have heard over the course of the day Mikhail Fridman, the chairman of Alfa Bank, one of the richest men in Russia, was born in Western Ukraine, sent a note out to his company, his overall net worth, $11.4 billion, calling for an end to the bloodshed with the war that's ongoing right now.

Oleg Deripaska, another Russian billionaire, who was actually sanctioned in the Trump administration, those sanctions were removed off him and his company, aluminum mogul, $28 billion, now calling for peace, clarifications of economic policy.

There's no sense right now when I talk to U.S. officials, Ana, that oligarchs feeling pain is going to dramatically change President Putin's behavior. However, these are critical individuals with real money, real assets inside Putin's inner circle. The more they start to voice their concerns, obviously, the more impact it may have on how Russia operates, Ana.

CABRERA: Phil Mattingly, thank you.

And now to a video that really drives home the horror of what's happening in Ukraine today. This is on a bridge outside Kyiv. Ukrainian forces ambush a Russian column, reducing the Russian military vehicles to rubble

And CNN's Matthew Chance was there in the immediate aftermath of this ferocious battle.

And I have to warn you, some of the images are quite graphic.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: And this is one of those Russian Soviet era vehicles which is completely burned out.

You can see this is a bridge, actually is an access point to the northwest of Kyiv, the Ukrainian capital. And the Russian column that has come down here has been absolutely hammered. Obviously, we are still in a very exposed situation right now, but if we can just bring you along here, there's the debris everywhere, the twisted metal of these vehicles. This is obviously just the truck carrying supplies. We saw the armored

vehicle in front there. I mean, looking around, absolutely -- look at this. I mean, what kind of munitions does it take to do that to a car, to a vehicle?

I know that I have just been to the local Ukrainian commanders here. They have been saying that they were using Western anti-tank missiles to attack these columns. Look, so recent the battle, this vehicle is still smoking. There's still smoke coming out the back of that.

So I don't want to show you this too much, but there's a body there. That's a Russian soldier that is lying there dead on this bridge, lying there dead on this bridge, as his column has attempted to drive in and been thwarted.

Ukrainian officials and Ukrainian soldiers who I have been speaking to over the past couple of hours are absolutely enthused by this victory they say that they have scored.

(END VIDEO CLIP)

CABRERA: So, small victory there, but the battle continues.

Let's bring in Colonel Cedric Leighton.

And I just have to wonder, Colonel. We see images like that, and I think there's this collective sigh around the world that at least Ukrainians are holding on here.

[13:15:06]

But if the Russian invasion keeps meeting strong resistance, where do you see this headed?

COL. CEDRIC LEIGHTON (RET.), CNN MILITARY ANALYST: Well, Ana, it's very possible that, given the types of weapons that we're seeing coming into Ukraine from Russia, that the Russians will increase their military efforts and redouble what they're doing.

That could mean increased airstrikes. Could mean increased artillery strikes. And I think we're beginning to see that in Kharkiv, the second Ukrainian city -- the second largest Ukrainian city. I think that's precisely what is happening.

And, of course, we also heard some bomb blasts. Alex have heard some block bomb blasts in Kyiv. So, this is something that is going to, I think, continue. And it seems to me that it may very well be part of a pressure campaign, both militarily and diplomatically, on the part of the Russians against the Ukrainian government at the moment.

CABRERA: Even as the negotiations were happening between Ukraine and Russia today, there were those explosions happening in Ukraine.

Do you, I guess, give any credit to the negotiations? Do you expect anything to come from these talks?

LEIGHTON: I'm kind of with President Zelensky at this point on that issue.

If it does happen, if something good occurs, in other words, that there's a cease-fire or something of that type to limit the suffering, I'm, of course, all for that, provided that it doesn't impede Ukraine's ability to remain an independent nation.

So I don't really hold much stock in the negotiations. I think the Ukrainians are well aware of whom they're negotiating with. And I think it's going to be a long road, either diplomatically or militarily, for the Ukrainians in this case.

CABRERA: The U.S. has ruled out enforcing a no-fly zone for now. Ukraine says that's what is needed here.

What else can be done by the U.S. or by NATO militarily, short of boots on the ground or in the air?

LEIGHTON: Yes, so that's going to be a difficult thing.

With a no-fly zone, Ana, you would need to actually establish air supremacy over that area. And, of course, we would have to bring our assets in over Ukraine to do that. So, short of that, short of boots on the ground, basically, it amounts to resupplying the Ukrainians and making sure that those supply lines to the Ukrainian front lines are not interdicted, not impeded by anything that the Russians are doing.

So, it's a dicey situation or could potentially be an even dicier situation. But I think that that would be the key thing, is both you have that kind of military support, provide them with weapons systems that they can use, and munitions, of course, to go with those weapon systems, and then, in addition to that, of course, intelligence support to give them a real-time view of exactly what's going on, from our perspective, and they can integrate it with their perspective then.

CABRERA: Colonel Cedric Leighton, I really appreciate your insights. Thank you so much for your guidance throughout all of this.

His back is against the wall. His own people are turning against him, but he is not showing any signs of stopping. So how do you get Putin to back down? We will discuss.

Plus, Ukrainian officials say those soldiers who famously stood up to a Russian warship and were feared dead are actually -- quote -- "alive and well."

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: I am Russian military ship. Propose to put down arms, or you will be hit. Acknowledge.

UNIDENTIFIED MALE: (EXPLETIVE DELETED) it as well.

UNIDENTIFIED FEMALE: Just in case.

UNIDENTIFIED MALE: Russian warship, go (EXPLETIVE DELETED) yourself. (END AUDIO CLIP)

(COMMERCIAL BREAK)

[13:23:08]

(BEGIN VIDEO CLIP)

GEN. DAVID PETRAEUS (RET.), FORMER COMMANDER, U.S. CENTRAL COMMAND: We have to start thinking through, how do we provide Russia an out? I mean, you never want to put a guy who has nuclear weapons truly in a corner, where he feels that he has nothing left to lose.

(END VIDEO CLIP)

CABRERA: That's General David Petraeus, the former head of U.S. Central Command, warning that the West needs to give Vladimir Putin options.

Susan Glasser is a CNN global affairs analyst and a staff writer at "The New Yorker." She also spent many years as a journalist in Moscow covering Russia and Vladimir Putin. And also with us, Norm Eisen. He is a former U.S. ambassador to the Czech Republic. He's also a senior fellow at the Brookings Institution and a CNN legal analyst.

Ambassador, let me start with you.

Do you see anything Ukraine and the West can put on the table right now that would give her a diplomatic way out of this?

NORMAN EISEN, CNN LEGAL ANALYST: Ana, thanks for having me back.

No, I think it is early days now for an actual offer. I'm extremely dubious, like President Zelensky, about the negotiations that have started. But I do think that, over time, particularly as -- remember, we're only five days into the conflict. I think as the situation the ground evolves, there will be opportunities over time for off-ramps, things like discussing a Ukrainian pledge never to be a part of NATO.

As much as it pains me, Ana, because I have written about the history of European appeasement, these territories that have been invaded by Russia, there are concessions to be made there. And the other thing to remember is, there's room for an off-ramp. Putin is not yet in that corner, because, as powerful as sanctions are, there's miles to go in that area.

So there will be room.

CABRERA: Susan, I want to get your thoughts, having covered this region for many years.

[13:25:00]

We know the talks between Ukraine and Russia ended without a concrete deal or plan moving forward, but basically saying they're going to go back and have their own consultations amongst their officials and then perhaps proceed with further negotiations.

But we know President Putin talked to French President Macron today. And in the readout from that conversation, Russia's still demanding a demilitarization of Ukraine. That doesn't appear likely to happen. So what is a potential off-ramp? Your thoughts about Putin being backed into a corner?

SUSAN GLASSER, CNN GLOBAL AFFAIRS ANALYST: Yes, thank you so much.

I would say that Vladimir Putin in a corner is an even more dangerous Vladimir Putin. And I think what you're hearing from General Petraeus is increasingly what I'm hearing, concern from experts who follow this closely, which is that, if you look at Vladimir Putin's history, his history is one of escalation when pressed.

And we have now pressed Vladimir Putin with some pretty enormous tools at the disposal of the United States and the West, which we haven't resorted to in the past. We are essentially waging economic warfare on the Russian economy. That increases enormously the pressures on Putin and his regime from the inside.

And that's always been at the core of Putin's political concerns, is about the stability and the maintenance of his own power and his own time in office. So, we have ratcheted it up. And rather than coming to some instant diplomatic resolution, I think, unfortunately, what it very likely means is an escalation by Vladimir Putin inside Ukraine and in the military campaign, because, as a number of experts have cautioned me, we have in a way only seen the beginning of this war and of Russia's military capabilities inside Ukraine.

So I think the great fear is more attacks on civilian areas, more horrific bombings like we have seen in Grozny, in Aleppo, and other places by the Russian military.

CABRERA: Ambassador Eisen, Vladimir Putin, he's often seen as a leader who carefully considers possible outcomes before making a move.

And we are seeing an unprecedented, an almost unified international reaction, the U.S. and the E.U. sanctioning the Russian Central Bank, the E.U. for the first time ever financing the purchase of weapons to a country under attack, thousands in Russia risking their lives in protest.

You have Turkey and Hungary, countries typically more supportive of Russia and Putin, now supporting Ukraine and its allies. Even Switzerland, traditionally neutral, says it's going to implement the same sanctions as the E.U.

Do you think Putin was really prepared for this reaction?

EISEN: Ana, I don't think he was prepared for this.

As of Friday, I know the other analysts who I confer with at Brookings and elsewhere thought that the response was tepid and that Europe was somewhat dragging their heels in response to the urgings of the Biden administration and the United States to do things like the SWIFT system crackdown.

But what a difference 72 hours make. It's a surprise, and it's a pleasant surprise, to see Europe come up to that level, the subtle leadership, but powerful, the Biden administration giving room, the European leaders responding to Zelensky's emotional plea, and the European public supporting that.

It's heartening to see that element of humanity emerging, particularly when you look at European history. So it's a surprise, a bad one for Putin, a pleasant one for the rest of us.

CABRERA: Real quickly. Susan, what about these oligarchs now grumbling inside Russia? Do you think they will have any kind of impact?

GLASSER: Well, I think that if Vladimir Putin had listened to the oligarchs, he wouldn't have launched this war in the first place.

I think what we have seen is a President Putin who's extremely and increasingly isolated, who appears to be taking the counsel of few, if any, of his former advisers, really in the thrall of a small number of security services and their leadership right now.

And so I think that's part of the problem. You see it in those images of Vladimir Putin refusing even to get near his own advisers, never mind foreign emissaries. And so I'm afraid that the voices of the oligarchs are not going to be the thing that, at least in the short term, ends this war.

CABRERA: Susan Glasser and Ambassador Norm Eisen, thank you both.

And stay with us for all news out of Ukraine, where long lines forming outside supermarkets in Kyiv after a 36-hour curfew was lifted, store shelves emptying fast.

We're going to stay on top of all the latest. You're live in the CNN NEWSROOM.

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