G-7 Agrees to Exclude Russia, Increase Sanctions
World Powers to Meet in Brussels in June Without Russia
By Carol E. Lee,
Matthew Dalton and
Anton Troianovski
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Updated March 25, 2014 8:08 a.m. ET
On Tuesday, the Kremlin said it had no information on the Group of Eight nations canceling planned talks and that Moscow was still interested in continuing contacts with G-8 partners. WSJ's Anton Troianovski reports from The Hague. Photo: AP
THE HAGUE—The leaders of the world's largest advanced economies moved Monday to isolate Russia, severing a key link between Moscow and the Western world after nearly two decades.
The leaders of the Group of Seven, or G-7, nations effectively disbanded the larger G-8 by excluding Russia until it changes course in Ukraine. They also agreed to exert punitive sanctions on Russia's energy, banking, finance and arms industries unless Moscow begins to dial back plans to absorb the region of Crimea.
But the G-7 leaders, who met in emergency session, didn't specify how far they would go to isolate President
Vladimir Putin and hammer Russia's economy. While chastising Moscow in a joint statement, they also left the door open for Russia to one day return to its chair in the G-8. They also offered praise for Mr. Putin's decision to partially endorse an international observer mission to Ukraine.
"Russia has a clear choice to make," the leaders of the U.S., U.K., France, Germany, Japan, Italy and Canada said in the joint statement. "Diplomatic avenues to de-escalate the situation remain open, and we encourage the Russian government to take them."
President Barack Obama and German Chancellor Angela Merkel attend a meeting at The Hague on Monday. Yves Herman/Press Pool
Russian Foreign Minister Sergei Lavrov adopted a sanguine view toward his country's exclusion. "If our Western partners believe that this format has outlived its usefulness, then so be it," Mr. Lavrov said. "As an experiment, we can wait a year or year and a half and see how we live without it."
The U.S. welcomed Mr. Lavrov's decision to meet with his Ukrainian counterpart on the sidelines of the same Nuclear Security Summit in The Hague where the G-7 meeting occurred. The State Department had tried unsuccessfully for nearly a month to arrange such a meeting, viewing it as a possible channel to defuse tensions.
Afterward, the Ukrainian government said in a statement that the two sides had agreed on high-level emergency consultations "in the case of exacerbation of the situation." Mr. Lavrov said he told Ukrainian Foreign Minister Andrii Deshchytsia that Ukraine needed constitutional reforms to protect Russian speakers in the country.
President Obama, seeking to shift the trajectory of the crisis in Ukraine, will press U.S. allies to suspend Russia from the G-8 as G-7 leaders move the June summit to Brussels from Sochi. Jerry Seib joins the News Hub.
U.S. officials said that Secretary of State
John Kerry expressed alarm to Mr. Lavrov about the continued mobilization of tens of thousands of Russian forces along its western border with Ukraine—and the prospect that it could move to annex more territory in Ukraine or elsewhere, such as the breakaway Moldovan territory of Transnistria.
"We are deeply concerned about Russian movements along that border," said Ben Rhodes, a deputy White House national security advisor who traveled to the Netherlands with the president. "We are watching it very closely, as is NATO, as is the Ukrainian government."
The bulk of the G-7 statement took a heavily critical view of Russia and its intervention in Ukraine.
It denounced as illegal the Crimean referendum this month seeking to join Russia, and condemned Mr. Putin's decision to annex Crimea. The seven leaders formally agreed not to attend a long-planned G-8 summit in Sochi, Russia in June.
"This group came together because of shared beliefs and shared responsibilities. Russia's actions in recent weeks are not consistent with them," the U.S., U.K., Germany, France, Canada, Japan and Italy said in a joint statement. "We will suspend our participation in the G-8 until Russia changes course and the environment comes back to where the G-8 is able to have a meaningful discussion."
Related Video: Russian troops seized the marine base in the port of Feodosia, Crimea on Monday. They detained up to 80 Ukrainian servicemen and took two injured Ukrainians away by helicopter. (Image: Dmitry Serebryakov/Agence France-Presse/Getty Images)
Instead of going to Sochi, world powers said they would gather in Brussels in June—without Russia.
"We believe that there's no reason for the G-7 countries to engage with Russia going forward based on its behavior," said Mr. Rhodes. "We believe those broader sanctions are necessary."
Arriving in the Netherlands for the international gatherings, President Barack Obama was seeking stiffer sanctions from European allies and a formal move to indefinitely suspend Russia's participation in the G-8.
The formal communiqué adopted by the seven world leaders didn't specifically exclude Russia, however, agreeing instead to jointly refrain from participating in any G-8 events with Mr. Putin's government.
U.S. and Western officials explained later that consensus rules governing international organizations such as the G-8 necessitated that approach. Unless all members agree, the group is unable to act. Officials stressed there was no disagreement among national leaders about whether to remove Mr. Putin from future gatherings.
"In short, Russia is suspended from the G-8, pending its current activities in Ukraine," a senior U.S. official said.
The leaders walked a fine line in a bid to avoid Cold War overtones in what has become the most acute East-West confrontation since the fall of the Soviet Union. For instance, they met on the seemingly neutral turf of the Dutch prime minister's residence, avoiding either the U.S. embassy or U.S. ambassador's residence, even though the U.S. had initially called for the G-7 meeting.
Canadian Prime Minister
Stephen Harper, speaking after the G-7 meeting, said the international reaction to Russia's occupation "isn't going to be brief."
"This is going to be an ongoing pressure to indicate that a large part of global community is simply never going to accept this, because this is a precedent that's just too dangerous for global peace and security," he said.
His comment, like others at the summit, pointed to a rupture in relations that likely won't mend unless Russia decides to backtrack on its Crimean annexation.
U.S. President Barack Obama and Chinese President Xi Jinping meet at the U.S. ambassador's residence in The Hague on Monday. Agence France-Presse/Getty Images
Russia began formally taking part in G-8 events in 1998, after Western officials allowed post-Soviet leaders to ease their way into international gatherings and planning sessions. The potential costs to Russia of being indefinitely cut off from the G-8 aren't easily measurable. While the G-7—before Russia joined the group—was envisioned as a group concerned with economic matters, the G-8 was framed more in terms of international security. But without membership in the G-8, Russia still will find itself more isolated from the world's two largest economies—the U.S. and the EU.
Asked whether Russia can be trusted not to launch a military incursion into eastern Ukraine, Mr. Lavrov harangued the West for failing to keep promises after the collapse of the Soviet Union.
"We are not forcing anyone to believe us," Mr. Lavrov said. "We for a long time believed our Western partners, starting with the collapse of the Soviet Union, when all kinds of spoken and written promises were made."
The U.S. and Europe have begun instituting sanctions against Russia, freezing assets and banning travel rights. The measures have begun to bite because some of those sanctioned are wealthy Russian business executives. The U.S. targeted a well-connected Russian bank, as well.
Monday's summit, called by Mr. Obama, didn't yield backing for immediate economic sanctions on Russia. The European powers—Germany, France, the U.K. and Italy—have said that step will come if Russia escalates the situation in Crimea.
German Chancellor
Angela Merkel said any decision to place economic sanctions on Russia would need the approval of all 28 EU nations.
"We are a group of large industrial countries, but we are simultaneously members of, for example, the European Union," Ms. Merkel said.
The G-7 agreed on the possibility of sanctions on large sectors of Russia's economy unless Moscow moves to de-escalate the military situation in and around Ukraine. Potential targets include Russia's energy, finance, banking and arms sectors, the senior U.S. official said, a move sought by Mr. Obama.
The leaders discussed that moving to sectorial sanctions would have economic consequences on the global economy but agreed that Russia has more to lose economically and the "cost of inaction" was greater, the senior official said. There was concern among leaders that if Russia wasn't penalized, it would set a global precedent for aggression by other nations.
"The biggest hammer that we can drop is sectoral sanctions," the senior U.S. official said.
The crisis in Ukraine overshadowed what until recently was one of the most urgent U.S. foreign policy priorities—its relationship with China and the stability of the waterways of Asia, where Beijing has confronted U.S. allies in the region politically, economically and militarily.
Mr. Obama met Monday with Chinese President
Xi Jinping, discussing the regional issues, but also touching on the crisis in Ukraine. The U.S. leader stressed the importance of nations respecting the sovereignty of others, U.S. officials said.
"We would find it as a constructive step for them to refrain from supporting Russia's action," Mr. Rhodes said. He added that Mr. Xi told Mr. Obama in their meeting that principle is fundamental to China's approach and Beijing wants a political solution in Ukraine. "It matters if traditional friends of Russia cannot express support for [its] position," he said.
—Paul Vieira, Jay Solomon
and Maarten van Tartwijk contributed to this article.
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