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The Situation Room

Warning Shots Fired In Escalating Ukrainian Standoff

Aired March 04, 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 on the crisis in Ukraine.

Warning shots are fired in the escalating standoff. Russian and Ukrainian forces stare across the barrel of a gun, while Vladimir Putin says he reserves the right to use force if need.

Secretary of State John Kerry delivers new help to Ukraine. He and President Obama are sharpening their warnings against Russian aggression and meddling, their words. And we're tracking all the military moves on both sides at sea, in the air and on the ground at this critical moment for the world. Will Putin blink?

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

Russian President Putin defiant and defensive, breaking a silence today in the crisis in Ukraine. He's facing new warnings from the U.S. and its allies to withdraw his troops and avoid a dangerous confrontation. Here are some of the latest developments.

Putin is denying that Russian forces are occupation the Crimea region of Ukraine, but he says he has the right to "take all measures" to protect ethnic Russians who live there. A senior Obama administration official tells CNN Russia declined an invitation to hold talks with Ukraine, the U.S. and Britain on defusing the crisis.

Despite the growing tension, Russia went ahead today with a planned test-firing of an intercontinental ballistic missile. President Obama says Putin's words don't match the facts on the ground in Ukraine and he's warning the Russian leader that he's -- quote -- "not fooling anybody."

Here's our senior White House correspondent, Jim Acosta.

(BEGIN VIDEOTAPE)

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Wolf, the war of words between President Obama and Vladimir Putin escalated today. While the president said he believes Putin is pausing and reflecting on what he's done in Ukraine, he also made it clear he doesn't trust the Russian leader.

(voice-over): Visiting a school in D.C., President Obama all but accused Vladimir Putin of lying about what he's up to in Ukraine. BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I know President Putin seems to have different set of lawyers making a different set of interpretations. But I don't think that's fooling anybody.

ACOSTA: Putin broke his silence on the crisis, insisting to reporters he had not sent Russian troops into the Crimea.

VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): They were self-defense teams. If I take the decision to use military force, it will be completely legitimate and correspond to the international law.

ACOSTA: The president responded by accusing the Russian leader of violating Ukraine's right to control its own destiny.

OBAMA: Mr. Putin can throw a lot of words out there, but the facts on the ground indicate that right now he's not abiding by that principle.

ACOSTA: The White House went further, saying it's obvious those troops in ski masks without insignias are Russian.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Where we have disagreements, we are very blunt about them. This would be one. It is a fact that Russian military forces have taken over Ukrainian border posts.

IVO DAALDER, SENIOR FELLOW, BROOKINGS INSTITUTION: He thinks perhaps because he's an old KGB guy that he can just lie his way out of this.

ACOSTA: Ivo Daalder, Mr. Obama's ambassador to NATO until just last year, said the U.S. and its allies should flex their muscles. His recommendation? Send NATO forces to Ukraine's neighbors.

DAALDER: In my view, the next step ought to be to have reinforcements to flown into Poland, to the Baltic states and perhaps to Romania, in order to demonstrate that our commitment to their defense is real.

ACOSTA: So far, White House officials have said military options would only escalate the crisis. The focus instead is on squeezing Russia through diplomacy, but the president's handling of Putin has touched off the latest angry partisan Washington brawl.

SEN. JOHN MCCAIN (R), ARIZONA: So after five years of believing that somehow Vladimir Putin was anything but what he is, we are now paying the piper. The chickens are coming home to roost.

SEN. CHRIS MURPHY (D), CONNECTICUT: Putin marched into Georgia in 2008, under a Republican president, who many of my Republican colleagues considered to be strong on foreign policy.

ACOSTA (on camera): The president once again met with his national security team on the situation in Ukraine today.

As for Putin's claims that he's just looking out for the interest of ethnic Russians in Ukraine, this administration from the president on down called that nonsense as well -- Wolf.

(END VIDEOTAPE) BLITZER: Jim Acosta at the White House, thank you.

The secretary of state, John Kerry, had even harsher words for Russia, condemning its -- quote -- "act of aggression." He spoke during an emergency visit to Ukraine earlier today.

Our foreign affairs reporter Elise Labott is traveling with the secretary. She's joining us now from Paris.

So, update our viewers on how this day went, Elise.

ELISE LABOTT, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, Wolf, it was really a mixed message from Secretary Kerry. He visited the Ukrainian shrine where the fallen -- so many people, Wolf, had died of the violence and then he also met with Ukrainian government officials and ordinary Ukrainians.

And it was a mixed message for the Russians. He said he really had an understanding of it's important interests that Russia had in Ukraine, particularly the Crimea, but he was absolutely brutal when he described how Russia was taking care of business. Take a listen.

(BEGIN VIDEO CLIP)

JOHN KERRY, U.S. SECRETARY OF STATE: It is not appropriate to invade a country and at the end of the barrel of a gun dictate what you are trying to achieve. That is not 21st century, G8, major nation behavior.

(END VIDEO CLIP)

LABOTT: But at the same time, Wolf, he really emphasized and he said he couldn't emphasize enough that he, President Obama, the United States does not want a confrontation, wants a de-escalation with Russia, wants to calm this down, get a diplomatic process going, and that's what he's going to be talking about to Sergei Lavrov, the Russian foreign minister, when they meet tomorrow in Paris.

BLITZER: What about the message he was trying to send? It wasn't just a message to Russia. It was also a message to the people of Ukraine, right?

LABOTT: Absolutely, Wolf.

The whole day was kind of totally with symbolism. First, he started at the Shrine of the Fallen. Then Secretary Kerry met with ordinary Ukrainians. They told him about their story.

And then he met with new government officials, this brand-new government, and offered U.S. support to the tune of a $1 billion loan guarantee, other types of technical advice, and had these harsh words for Russia, but then came to Paris. The new Ukrainian foreign minister hitched a ride on his plane, showing the U.S. support for this nation.

And the Ukrainian foreign minister said to us, Wolf, we know we aren't as strong as Russia, but when we have the international support behind us, when I'm flying possibly to meet the Russian foreign minister in Paris on the secretary of state's plane, that sends an important message to Ukrainians that we're a strong nation, and we have the international support behind us. We don't need to shoot a gun, because we have the world's support -- Wolf.

BLITZER: Elise Labott joining us. She's traveling with the secretary of state. He's now in Paris. Thanks, Elise.

Let's go to Ukraine right now. The naval commander there said at least 10 military bases are currently blocked by armed men. The showdown with Russia is driving home some of the deep divisions within the country itself, especially in the Crimea region.

CNN's Diana Magnay is there.

(BEGIN VIDEOTAPE)

DIANA MAGNAY, CNN CORRESPONDENT (voice-over): This is where two worlds collide, on the one side, an unmarked army. The Russian president says they're not his men. Telltale signs suggest otherwise.

On the other, Ukrainian troops trapped in their bases. In between the two, army wives anxious to avoid war, who feel Crimea's new pro- Russian leader, Sergey Aksyonov, has put their husbands in an impossible situation.

LINA LEVITSKAYA, RESIDENT OF UKRAINE (through translator): If they do not take the oath to the new Crimean authorities, then there will be fighting. And if there's a drop of blood spilled on either side, then our husbands will be held responsible.

MAGNAY: Relations between the two sides seem cordial. It's us they dislike.

(on camera): Are we able to talk to the Ukrainian soldiers? Because you are clearly from Russia.

UNIDENTIFIED FEMALE: They will refuse to talk to you.

MAGNAY: OK. So you are all taking orders from Aksyonov?

(voice-over): This man has come to bring food to the Ukrainian soldiers. He says he wants Russian forces out of Crimea.

"I'm Russian," he says, "and I want to say I don't need any protection from any brother nation or anyone else on my land. We will solve our problems through talks, not fights."

Blocking food deliveries at the gates, this self-organized band of brothers, staunchly pro-Russian, they hope this month's referendum gives them a clean break from Kiev. It will mean either we have full autonomy or we disconnect and join fully with Russia," this man says. "That can only be positive."

Only the young have no agenda, no idea their playgrounds have become an international flash point.

Diana Magnay, CNN, Perevalne, Ukraine.

(END VIDEOTAPE)

BLITZER: Tense standoff indeed.

Still ahead: The German chancellor suggests Vladimir Putin may have lost his mind. Is the Russian leader in touch with reality right now? We will discuss.

And a dramatic standoff between pro-Russian and Ukrainian forces, and it's all captured on video.

(COMMERCIAL BREAK)

BLITZER: Russian and Ukrainian forces engaged in a dramatic face-off at an air base in Crimea, in the Crimea region of Ukraine earlier today while a camera was rolling. The Russians fired warning shots in the air as the unarmed Ukrainians approach. Take a listen to some of the confrontation, and you can read the translation on the screen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE (through translator): I will shoot.

UNIDENTIFIED MALE (through translator): America is with us.

UNIDENTIFIED MALE (through translator): The Soviet flag, would you shoot the Soviet flag?

UNIDENTIFIED MALE (through translator): Please get the commander.

UNIDENTIFIED MALE (through translator): We will have a negotiation, no question.

UNIDENTIFIED MALE (through translator): Stop the crowd and have them behave properly.

UNIDENTIFIED MALE (through translator): You are causing a provocation on purpose.

UNIDENTIFIED MALE (through translator): We are unarmed. What provocation?

UNIDENTIFIED MALE (through translator): I said stop. I am fulfilling my orders. I'm serious. I will shoot at your legs.

(END VIDEO CLIP)

We're joined now by Julia Ioffe, the senior editor for "The New Republic," along with our chief national security correspondent, Jim Sciutto.

Julia, you speak Russian, so you understood that exchange. It was very tense, very dramatic. Are we exaggerating?

JULIA IOFFE, SENIOR EDITOR, "THE NEW REPUBLIC": Exaggerating what?

BLITZER: The intensity of what's going on?

IOFFE: No, no. I mean, he's threatening to shoot people in the legs. And also what is curious is, he's saying, I'm following orders. Who is he taking orders from? Are these more of the unmarked gunmen we see strutting around Crimea? Or who do they answer to? Who do they get their orders from?

BLITZER: This could have ended differently. Fortunately, no one was injured, but look at the intensity of their faces, what they're saying. There could have been some blood.

IOFFE: I don't know. You often encounter this kind of person, be it a cop or a special forces operative, for example, at protests in Moscow. They might not have guns on them, but they can be really intense and they might not actually want to spill blood, but they're scary.

BLITZER: Jim, show us where we're -- we're talking right now this region of Crimea. We have highlighted the area, a sovereign part of the Ukraine, although some Russians probably would not like it to be a sovereign part of Ukraine, but this is a key military strategic area for the Russians.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Right here, this is Sevastopol, headquarters of the Black Sea fleet, Russia's only warm water port. We have talked about that.

The other one is way up here, where they're not going to necessarily have access during winter, and gives them access from the Black Sea, connected to the Mediterranean, connected to the Atlantic. That's essential. This is -- you know, this seems to be Putin's endgame here, to establish and demonstrate and send a message about his interest in this area, and his control, his continued control over it.

You know, you can argue that he's already reached that goal, right, regardless of what happens next. He's made it clear things went too far with this government, he wasn't comfortable with the government, doesn't think it's representative, and he sent his message.

BLITZER: You wrote a piece today -- and I read it, very powerful -- you suggest Putin has, in your words, lost it.

Explain.

IOFFE: Actually, there was a piece in "The New York Times" on Sunday where Peter Baker reported on a conversation that Angela Merkel had with Barack Obama, in which he said she tried to talk some sense into Vladimir Putin, but said that his touch -- that he was no longer in touch with reality and that he was in another world, as she said.

Today's press conference really proved it. He has started to believe his own propaganda.

SCIUTTO: And some of those things he's saying are truly dangerous, right?

In the press conference today, he's talking about fascists, and anti- Semites among the protesters, not just among them, but in fact leading them. And this is the kind of thing. You have such a volatile mix of emotions and history in all of these places here, and now you have guys with guns. Right?

And you see that confrontation today. And he says he's following orders, but he is far away from headquarters there, and all it takes is one bad decision and the thing could spiral out of control.

BLITZER: He may be delusional, may be out of control, lost it, living in another world, but he got what he wanted, which is basically Crimea. For all practice purposes, without a lot of blood, if any blood being shed in Crimea, he's in control.

IOFFE: Yes, it's interesting. This was not a problem before. The Russian Black Sea fleet was based there, no problem.

He always managed to find a way to build good relations with whoever was in power in Kiev, with Yanukovych, with Tymoshenko. He was fine. I think it was just that when the opportunity presented itself that he went ahead and took it, because, you know, it's better not to be dependent on another country to base your fleet in.

SCIUTTO: Could I ask you a question? Because one thing we have talked a lot about is, how does the U.S., how does the West demonstrate its commitment to its NATO allies, the ones here all along the western border, Poland, Slovakia, Hungary, Romania, and then you have the Baltic states up there.

If the U.S. were to send a military signal and, say, hold exercises, right -- Russia is holding exercises over there just off the eastern border -- hold some exercises here with Polish forces, how would Moscow react to that?

IOFFE: I think they might blow a gasket. I don't know what that would look like, but look at how they're reacting at the mere mention of just economic sanctions by the U.S.

The U.S. is not even a big trading partner for Russia. It does far more business with Europe, and the Russian elite have all their money and real estate in Europe, not in the U.S., and yet the mere mention of the U.S. imposing economic sanctions is driving them crazy. I mean, you have people at the highest levels of the foreign ministry, of the Kremlin, of the government just...

BLITZER: Because what I have been told that what Putin cares the most is about money. He has got a lot of money. He's got billions.

IOFFE: I don't agree.

BLITZER: He's a Russian nationalist, but if he sees that fortune that he and his buddies have collected going down the drain with the value of Russian currency collapsing, with the markets collapsing, that could have an impact on him.

IOFFE: I actually don't agree. I think the economic arguments have been the least powerful.

We saw this, for example, when he invaded neighboring Georgia. People said, you know what? This is going to be a big hit on the Russian stock market, on Russian companies, on the ruble. It didn't matter. He cares about his place in history.

(CROSSTALK)

BLITZER: They made a nice comeback today after a dramatic fall yesterday.

IOFFE: No, but he cares most about his place in history. If he's seen as restoring a bigger Russia, a Russia with bigger territory, reuniting ethnic Russians, orthodox Christians, I think that's more important to him than the money.

BLITZER: Julia Ioffe, thanks for that good discussion. Jim Sciutto, he is here all the time.

(CROSSTALK)

(LAUGHTER)

BLITZER: Guys, thanks very much.

Just ahead, more of the economic impact of the Ukraine crisis from Wall Street to Moscow. So here's the question I just asked and we're going to get Richard Quest to answer it. Will money make Vladimir Putin talk?

(COMMERCIAL BREAK)

BLITZER: A rebound on Wall Street today. The Dow Jones industrial average gained 228 points at the closing bell. Stock prices took a serious hit a day earlier, as the Ukraine crisis intensified. Russia's main stock index and Europe's leading markets also bounced back dramatically today.

Let's check in with CNN's Richard Quest. He's in New York watching all of this.

First of all, Richard, why did the Russian markets and the ruble rebound as dramatically as they did?

RICHARD QUEST, CNN BUSINESS CORRESPONDENT: For the same reason that the U.S. markets and the European markets also came back so strongly.

Mainly, any sign that this crisis in Ukraine will be solved peacefully, albeit painfully and maybe over some time, is a boon to the market. They like certainty. The last thing they want is higher oil prices, destruction of trade flows through sanctions or any form of economic disruption.

Take away that fear and you start to see markets recover. Add into the fact that we are in high-frequency trading, we are in new markets with computers. Therefore, the volatility and the movements are much greater than we would traditionally have seen.

BLITZER: If you believe the Russian markets today, and who knows what's going to happen tomorrow, there could be a roller-coaster effect, but at least on this day, it seems to me they don't really think the sanctions that the West, the U.S., the Europeans could impose are really going to happen?

QUEST: I think that's certainly one of the measures we can take. At the moment, the West and the European Union, the United States and the European Union are speaking with one voice on the rhetoric, but nobody's actually been forced, with the exception of John Kerry, to put a billion dollars down on the table.

If sanctions is next on the table, and we already know the U.K. has maybe got some worries about closing off the city of London to the Russians. And we know Angela Merkel has got some concerns about that, because the trade flows between Germany and Russia both ways are huge, but so far, Wolf, that test hasn't been put to the countries.

They're still talking with one voice. And maybe it's only that that's brought Putin back from the brink. But, even so, I would put it this way, 200 points on the Dow, it's Scotch mist. It could disappear tomorrow if things turn nasty again.

BLITZER: Certainly could. This is a rather volatile situation.

QUEST: Completely.

BLITZER: Richard Quest, thanks very much.

Remember, you can always follow us on Twitter. Tweet me @WolfBlitzer. You can tweet the show @CNNSITROOM. Thanks very much for watching.

Let's step into the CROSSFIRE right now with hosts Van Jones and S.E. Cupp. They're debating President Obama's response to the crisis in Ukraine.