:00:00. > :00:15.Afghanistan to help Al Qaeda and the Taliban. Now it's time for HARDtalk.
:00:16. > :00:22.Welcome to HARDtalk. Here at the US Embassy in London. What is
:00:23. > :00:27.Washington's strategy to try and influence events in Ukraine? They
:00:28. > :00:37.have seized Crimea, and is now pro`Russian rebels are in a violent
:00:38. > :00:39.stand`off with the interim government. My guest today is
:00:40. > :00:44.Secretary of State Victoria Nuland. Does she believe that pro`Kiev
:00:45. > :01:00.forces have designed on eastern Ukraine? Assistant secretary
:01:01. > :01:07.Victoria Nuland, welcome to HARDtalk. On cue, great to be with
:01:08. > :01:09.you. How would you describe what is going on in Ukraine? You have
:01:10. > :01:15.separatists fighting, holding government buildings and holding
:01:16. > :01:20.independence referendums. What is most important that is happening in
:01:21. > :01:24.Ukraine now is that the entire country is preparing for a
:01:25. > :01:28.presidential election on 25 May. The vast majority of Ukrainian territory
:01:29. > :01:34.is peaceful, and people are excited about their opportunity to vote. As
:01:35. > :01:37.you said, we have parts of Ukraine in the east, near the Russian
:01:38. > :01:40.border, where we have little green men and separatist trying to
:01:41. > :01:49.decipher people rather than let them vote. Sergei Lavrov said that when
:01:50. > :01:54.Ukrainians killed Ukrainians, that is as close to civil war as you can
:01:55. > :02:00.get. Is it close? Absolutely not. As I said, there are some very hot
:02:01. > :02:08.towns in Ukraine. Mostly in the east. In Sloviansk, in Kramatorsk,
:02:09. > :02:13.there are is violence in eastern towns. But this does not represent
:02:14. > :02:19.the views of the vast majority of Ukrainians. Even in the east, 75%
:02:20. > :02:22.say they do not want any part of this separatism. We believe this is
:02:23. > :02:27.inspired from the outside. That is 30% of the population, the people
:02:28. > :02:33.following those men in green suits as you say, that is a lot of
:02:34. > :02:37.people. You can't just dismiss them. Have to be incorporated somehow into
:02:38. > :02:40.this dialogue. They absolutely have to be incorporated. That is why we
:02:41. > :02:45.are gratified to see the Ukrainian government and officials from across
:02:46. > :02:50.the space now working with us and the EU and the OSCE to institute a
:02:51. > :02:55.national dialogue about the direction the country is going on,
:02:56. > :03:00.talking about things like constitutional reform,
:03:01. > :03:04.decentralisation of power. It was always the placed where Kiev held
:03:05. > :03:10.all the money and power. That is not appropriate in a modern state. It is
:03:11. > :03:15.also not appropriate to achieve political ends at the barrel of a
:03:16. > :03:19.gun. As you say, Kiev has launched its dialogue with politicians and
:03:20. > :03:21.civic groups trying to keep the country together. It does not
:03:22. > :03:26.include many rebel leaders. One senior Ukrainian says that without
:03:27. > :03:32.their participation the roundtables would just amount to declarations.
:03:33. > :03:34.You need them there and they are not being included. Ukrainian acting
:03:35. > :03:42.government says they do not want them there. In the first national
:03:43. > :03:48.roundtable, that happened on 14 May, in fact, a broad cross`section of
:03:49. > :03:56.politicians, civil leaders, were included. But folks who are holding
:03:57. > :04:01.buildings and have armed themselves, have to put down weapons if they
:04:02. > :04:03.want to be included. You can't on the one hand threatened and
:04:04. > :04:09.terrorise citizens, and on the other hand say let's talk about it. You
:04:10. > :04:13.have to accept amnesty first. But don't you think that somehow you to
:04:14. > :04:18.incorporate those people? And the government in Ukraine doesn't seem
:04:19. > :04:22.to be willing to do that. The acting president says they will not engage
:04:23. > :04:26.in dialogue with those with blood on their hands who are prepared to
:04:27. > :04:29.defend their interests by illegitimate means of persuasion.
:04:30. > :04:32.But we will not fight terrorist saboteurs and criminals. That does
:04:33. > :04:37.not sound conciliator enough to the people you need to bring into the
:04:38. > :04:41.dialogue. Again, the vast majority of folks in the east don't want to
:04:42. > :04:45.have this conversation about devolution of power through the
:04:46. > :04:50.barrel of a gun. We are talking about a small number of guys who
:04:51. > :04:54.have heavily armed themselves with outside support, who are saying we
:04:55. > :05:11.know best. What these roundtables offer is a chance for a legitimate
:05:12. > :05:16.citizens to work this out and say to separatists we can achieve our goals
:05:17. > :05:20.without you, thank you very much. In fact, they are in cities across the
:05:21. > :05:24.Ukraine, turning a games this. You remember this terrible tragedy in
:05:25. > :05:28.Odessa. Since then, the citizens say that police are not strong enough.
:05:29. > :05:34.They are going to police them themselves, because they want to
:05:35. > :05:37.vote, and to settle their problems with Kiev politically. They don't
:05:38. > :05:42.want guys from the outside, they don't want weapons on the streets,
:05:43. > :05:46.they don't want Russia telling them what to do. That is why they are
:05:47. > :05:50.supporting the right of Ukrainians to choose. You say there should be
:05:51. > :05:55.devolution, how much? Should it amount to federalisation
:05:56. > :06:00.virtualisation? The Russians have made that a bad word in Ukraine.
:06:01. > :06:05.What they want and have talked about is the right of Ukraine's regions to
:06:06. > :06:08.secede. In fact, they are asking for things in Ukraine they would never
:06:09. > :06:12.allow and Russia. But what Ukrainians are now talking about is
:06:13. > :06:17.actually devolving all of the powers of the state except foreign policy,
:06:18. > :06:22.defence, and justice, to the regions. So they would be able to
:06:23. > :06:26.collect their own taxes, and keep them, they would be able to decide
:06:27. > :06:31.on local languages, collect their own leaders. But if that doesn't go
:06:32. > :06:35.far enough for the separatists in eastern Ukraine, you will not have a
:06:36. > :06:39.solution to the problem. They will continue to destabilise the
:06:40. > :06:43.situation. What we are already seeing as a result of the
:06:44. > :06:47.Roundtable, the dialogue the Ukrainian government has initiated,
:06:48. > :06:53.and OSCE in Europe, and we are a part of it, as we are seeing
:06:54. > :06:57.citizens in these towns are saying wait a minute. Who are you guys with
:06:58. > :07:02.the guns? We can solve this and other way. You are seeing this
:07:03. > :07:05.process separating the hard`core who don't represent the Ukrainian
:07:06. > :07:11.people, from the population. That is a good thing. That the US think that
:07:12. > :07:15.Russia wants to incorporate the Donetsk region in eastern Ukraine
:07:16. > :07:19.into the Russian Federation? We have been concerned about it. As you
:07:20. > :07:24.know, what has just happened in the east is very reminiscent of the
:07:25. > :07:29.playbook we saw in Crimea. You instigate an independence movement.
:07:30. > :07:33.You have a fake vote on two weeks notice, and then you declare massive
:07:34. > :07:38.participation. And then you come in with your peacekeepers. We have to
:07:39. > :07:42.take President Putin seriously when he says that Russia should think
:07:43. > :07:47.about going back to the days of Catherine the great. We believe that
:07:48. > :07:51.if you don't take leaders seriously when they say these kinds of things
:07:52. > :07:54.than you are not prepared. If Washington believes in the
:07:55. > :07:58.possibility that Russia may annex part of eastern Ukraine, what can
:07:59. > :08:03.you do about that? What is the stick that you can wave at Russia? The
:08:04. > :08:07.stick we have been waiting, the cost, as President Obama puts it, is
:08:08. > :08:10.increasing isolation and increasing economic sanctions for Russia if it
:08:11. > :08:17.continues to violate international law. And it takes pieces of another
:08:18. > :08:20.country by force as it did in Crimea. So as you know, when
:08:21. > :08:27.President Obama was here in March, he made clear that if Russia used
:08:28. > :08:33.the 40,000 troops it still has deployed right on the border, that
:08:34. > :08:38.would trigger even deeper economic sanctions from the US and our
:08:39. > :08:41.European partners. But what we have seen with these little green man
:08:42. > :08:47.causing trouble around the east, is that there can be plenty of outside
:08:48. > :08:53.interference short of troops. And so when Chancellor Merkel was in
:08:54. > :08:57.Washington recently, she and President Obama agreed that if these
:08:58. > :09:01.elections were disrupted from the outside, then there will be even
:09:02. > :09:05.deeper economic sanctions. And that was part of what we were in Europe
:09:06. > :09:10.today to talk about. Said the sanctions stay as they are unless
:09:11. > :09:14.Russia goes into eastern Ukraine and unless Russia disrupts the
:09:15. > :09:19.presidential elections in Ukraine on 25 May. If there is continued
:09:20. > :09:22.destabilisation in Ukraine there will be more sanctions. If there is
:09:23. > :09:28.destabilisation of the elections there will be deep central
:09:29. > :09:31.sanctions. A sickly, Russia has got away with an axing Crimea. The
:09:32. > :09:36.sanctions stay where they are, and Russia can live with them as they
:09:37. > :09:40.are. First of all, with regard to Crimea. We have continued to
:09:41. > :09:45.escalate the sanctions there. The European Union put more sanctions on
:09:46. > :09:51.Crimean officials and entities. Just a few days ago, the US did two round
:09:52. > :09:54.of sanctions and will continue to add them if Russia doesn't roll back
:09:55. > :09:59.from Crimea. That is one thing. Second, with regard to living with
:10:00. > :10:02.them, they are talking tough in Moscow, but the numbers tell a
:10:03. > :10:08.different story. The numbers show that Russia has already spent just
:10:09. > :10:12.in the last couple of weeks, some $30 billion propping up their
:10:13. > :10:20.currency. Their economy is hovering close to recession lines. Their bond
:10:21. > :10:25.issuance is just above junk now. Inflation is rampant. They would
:10:26. > :10:27.save us were that they want to keep Crimea. As the former Secretary of
:10:28. > :10:32.State said in a British newspaper recently, understanding the Russians
:10:33. > :10:36.and knowing what Putin is like, the chances are high that Britain will
:10:37. > :10:43.never leave Crimea. If the United States going to accept that? We will
:10:44. > :10:47.not accept the illegal occupation of Crimea, and nor will Europe. In the
:10:48. > :10:51.same way that we never accepted the illegal occupation of... There is
:10:52. > :10:57.nothing you can do about it apart from point out the cost of it.
:10:58. > :11:03.Russia says they will live with it. There is not a great deal you can
:11:04. > :11:06.do. Sanctions are a blunt instrument because they will hurt not only the
:11:07. > :11:09.European Union but other countries in the world, just as much they will
:11:10. > :11:14.hurt Russia. First of all, with regard to Crimea, the economy there
:11:15. > :11:20.is already a basket case as a result of sanctions. And as I've said,
:11:21. > :11:26.there will be more. Crimea will be a no`go zone for US and European
:11:27. > :11:30.citizens if he does not roll back. But I would also say that we are
:11:31. > :11:35.talking contentedly to the Europeans now on what we call scalpel
:11:36. > :11:39.sanctions. We believe that given Russia's dependent on the European
:11:40. > :11:42.market, which is 50% of their market as compared with 9% for Europe,
:11:43. > :11:47.there are plenty of further measures that we can take. But if you look at
:11:48. > :11:50.what the American ambassador to the World Trade Organisation has had
:11:51. > :11:53.recently, he says Russia is increasingly building walls around
:11:54. > :11:57.its economy. So it is doing that while looking more to what it
:11:58. > :12:02.produces itself is what it buys. But also, as has been observed, it is
:12:03. > :12:07.looking at new trading partners and increasing ties with countries like
:12:08. > :12:12.Kazakhstan, Ella Roos, countries in their backyard. It can afford to
:12:13. > :12:15.live without the West in due course. It actually can't. That is the
:12:16. > :12:19.failure of strategy for Russia. That is back to the 19th century, and not
:12:20. > :12:24.that 20th century. That is partly why the IMF is saying Russia is
:12:25. > :12:28.hovering on the verge of recession now. `` Belarus. Those trading
:12:29. > :12:32.partners are not at a growth strategy for Russia. They are back
:12:33. > :12:37.to being a 20th`century gas station. Depending on forest and timber
:12:38. > :12:41.timber and those kind of things. And it is an goes in that direction, the
:12:42. > :12:48.Russian people will severely suffer. Russia will see growth decreased to
:12:49. > :12:53.zero, but the Ukrainian economy is going to contract by 7% as a result
:12:54. > :12:57.of the crisis and the sanctions which are going on. Ukraine depends
:12:58. > :13:01.great deal on Russia for its energy. It is also the pipeline that goes
:13:02. > :13:07.through Ukraine to other parts of Europe. That is the point, Russia is
:13:08. > :13:10.so integrated into the European economy. Russia and you hurt
:13:11. > :13:14.everyone else. Again, on the Ukraine, Russian energy, as the
:13:15. > :13:19.major transit company for Russian gas to Europe, Russia cannot afford
:13:20. > :13:24.to cut off its gas trade with Ukraine. As we saw in 2010, when
:13:25. > :13:32.that blockade lasted for a couple of days, however, what part of the
:13:33. > :13:35.strategy for Ukraine and part of the reasoned that Ukrainians went into
:13:36. > :13:39.the street if they want to be less dependent on Russia and diversify
:13:40. > :13:45.and be more integrated with Europe. That is going to take time though,
:13:46. > :13:49.isn't it? Actually, one of the greatest gifts of the European
:13:50. > :13:52.Union, one of its greatest exports, is its ability to associate with
:13:53. > :13:58.countries on its borders. And the association agreement that the EU
:13:59. > :14:02.has offered Ukraine will open up all kinds of new trading opportunities
:14:03. > :14:06.and will give them far more choice than they have had in the past. And
:14:07. > :14:11.that is partly why Ukrainians went into the streets in the first place.
:14:12. > :14:14.You remember that Maidan movement began when their former president
:14:15. > :14:20.told them they could not associate with the EU but had to stay in a
:14:21. > :14:24.stranglehold with Russia. At the sanctions are limited. Many people
:14:25. > :14:28.say that. Fred Kaplan said on 28 April that if western Europe doesn't
:14:29. > :14:34.go along, these deeper sanctions are theatre. We see free sample the
:14:35. > :14:39.French do not want to abandon selling their helicopters to the
:14:40. > :14:43.Russians. They say that they need this. So you are not going to see
:14:44. > :14:50.European countries really cool operating with the kind of sanctions
:14:51. > :14:56.that you say you need. We are having a good conversation in a few
:14:57. > :15:03.sectors, where we can share the pain and minimise the impact on us. All
:15:04. > :15:07.European countries understand new defence investment in Russia is a
:15:08. > :15:13.bad idea. We are talking about, at government level, what is happening
:15:14. > :15:16.in the private sector. As I go around Europe until two businesses,
:15:17. > :15:24.they have decided Russia is a bad risk for business. There are a few
:15:25. > :15:29.loans. On that 1.2 billion euros sale of assault ships to Russia from
:15:30. > :15:35.the French, is it OK for it to go ahead? We are all having a
:15:36. > :15:38.conversation about appropriate defence relationships with a Russia
:15:39. > :15:42.that would violate international law and go in and eat a chunk of its
:15:43. > :15:47.neighbour's territory. Defence issues are on the table in the
:15:48. > :15:54.conversation. Will they honour the contract? We have been clear about
:15:55. > :16:00.how we feel about the sale. Which is what? We never thought it was the
:16:01. > :16:07.best idea. There is a question of whether it can be stripped down or
:16:08. > :16:13.whether there are other ways to handle that. The conversation is
:16:14. > :16:18.ongoing. The French are not listening's they say the sale will
:16:19. > :16:20.go ahead and that the sale cannot be applied retrospectively and that the
:16:21. > :16:26.sale was signed before any of this happened. I think we can have a
:16:27. > :16:31.profound impact on the Russian economy if need be. If they don't
:16:32. > :16:38.make better choices in Ukraine, looking at future contracts and also
:16:39. > :16:44.we are having a very good and clear conversation among ourselves about
:16:45. > :16:50.the right posture in defence terms with Russia, with a Russia that
:16:51. > :16:55.would do this. Does that also involve the state energy company in
:16:56. > :17:02.Russia and the private sector oil companies, 2011, Exxon Mobil signed
:17:03. > :17:06.a contract. Will that be incorporated in the deals we would
:17:07. > :17:12.like to see? Given what we have seen and given the potential for even
:17:13. > :17:19.more threats, we will have to. We can't take anything off the table.
:17:20. > :17:22.We believe we can do this. We believe we can impact the Russian
:17:23. > :17:31.economy more than they in fact ours. Exxon Mobil, BP, Shell,
:17:32. > :17:41.companies with agreements with, they are OK. I call your attention to the
:17:42. > :17:45.fact that there is a big energy symposium in Russia in the next
:17:46. > :17:52.couple of weeks and virtually all of those companies have made clear they
:17:53. > :18:03.don't intend their CEOs will attend `` Putin. `` Gasgrov. The way that
:18:04. > :18:07.Europe's the economy is structured and individual nation states within
:18:08. > :18:12.the EU's economy are structured, needs to be taken into account.
:18:13. > :18:15.Everyone needs to do their own analysis. We are vulnerable in some
:18:16. > :18:24.areas and Europe is vulnerable in other areas. That work is ongoing
:18:25. > :18:30.now. It won't be identical, but they will be competent entry. As you came
:18:31. > :18:37.to attention in February because of the leak... But conversation with
:18:38. > :18:42.the American ambassador in Ukraine, when you discussed the nature of the
:18:43. > :18:49.new interim government, you used a derogatory remark. You used a swear
:18:50. > :18:57.word about the Europeans. Do you regret that and, what would you say
:18:58. > :19:00.now? First of all, it was a private telephone conversation that was put
:19:01. > :19:07.on the street by the Russian Federation. I don't think there is a
:19:08. > :19:10.human in the US or the EU who hasn't used an unfortunate expression in a
:19:11. > :19:19.private phone conversation in the past. We were expressing a temporary
:19:20. > :19:21.frustration, where Ukraine was looking for an international
:19:22. > :19:30.organisation to support the dialogue. The EU wasn't forthcoming.
:19:31. > :19:37.We asked the UN to come in. As a broader matter, we have superb
:19:38. > :19:43.relations with the EU. We have been working in lockstep, in supporting
:19:44. > :19:49.Ukraine and their right to choose, and in preparing costs for Russia.
:19:50. > :19:55.The president of France said in May of the radio that Russia might not
:19:56. > :20:05.have been emboldened to seize Crimea for this reason, for this ``, I said
:20:06. > :20:11.we must intervene even if there is no Security Council. Not having
:20:12. > :20:18.stopped him at that moment has been a signal heard by others today. Does
:20:19. > :20:24.he have a point? I reject that. The notion that we chose to negotiate in
:20:25. > :20:30.order to remove chemical weapons rather than use military means gives
:20:31. > :20:37.another country the right to use military means against its
:20:38. > :20:41.neighbour? The logic escapes me. The Swedish Foreign Minister, when asked
:20:42. > :20:46.recently why it Putin was emboldened, he said that the US was
:20:47. > :20:55.seen as absent from the geopolitics of the Eurasian area. Not only the
:20:56. > :21:02.French are saying this. Why do you think Putin has been emboldened? I
:21:03. > :21:16.haven't been interested in getting inside the rain of Vladimir Putin.
:21:17. > :21:18.That is about game. `` brain. When a leader violates international law
:21:19. > :21:23.and continues to intimidate with 40,000 troops, the international
:21:24. > :21:33.community need to say this is unacceptable and that this will have
:21:34. > :21:40.cost is. `` costs. Looking at the issue raised about America's place
:21:41. > :21:47.in the world, from the comments elsewhere, we know that Obama has
:21:48. > :21:54.said he doesn't want to use the military option at all. He said, I
:21:55. > :21:59.can't understand why everybody is eager for us to use military force
:22:00. > :22:05.after we have been through a decade of war at enormous cost to troops
:22:06. > :22:14.and the budget. We see the defence budget cut. US foreign policy begins
:22:15. > :22:24.at home. You can't be active internationally. I would let's go to
:22:25. > :22:30.NATO. `` I would reject that. We agreed we needed to make it clear to
:22:31. > :22:34.President Putin that NATO space is inviolable and we will defend every
:22:35. > :22:42.inch of it. You saw the deployment on land and on sea and in the air of
:22:43. > :22:47.NATO assets to protect those frontline states including 750 US
:22:48. > :22:51.troops in Europe, including a quadrupling of the assets in the
:22:52. > :22:59.air, US ships in the Black Sea. I wouldn't say this has been a
:23:00. > :23:04.challenge that has been devoid of military requirement. The US is not
:23:05. > :23:11.a power in retreat? I would reject that. If you look at any serious
:23:12. > :23:15.crises we deal with on the planet, the US is at the centre of the
:23:16. > :23:20.international response and negotiations we have. The US and
:23:21. > :23:26.Europe do this together. The US is at the centre of this policy of
:23:27. > :23:29.addressing the challenge in Ukraine by supporting them on the one hand
:23:30. > :23:37.and making it cost for Russia and keeping diplomacy open. You saw my
:23:38. > :23:43.boss, John Kerry, in South Sudan, negotiating that conflict. You see
:23:44. > :23:47.US forces helping Nigerians in the context of Boko Haram. We continue
:23:48. > :23:52.with our role of galvanising the world and saying at the centre of
:23:53. > :23:55.leadership. Victoria Nuland, thank you for coming on HARDtalk. Thank
:23:56. > :24:32.you. Most of us will have seen hot
:24:33. > :24:36.sunshine over the last few days. The heat has triggered thundery
:24:37. > :24:43.showers. There are more to come. The hotspot was Heathrow Airport. 26
:24:44. > :24:45.degrees. That was the highest temperature we have seen this year.
:24:46. > :24:47.It hasn't been sunny