Foreign Affairs Committee on April 7th, 2014

[David Kramer]

Sir, I think sanctions need to be both punitive and pre-emptive: punitive for the steps that Putin and Russia have already engaged in, such as the invasion of Crimea and its annexation, but also pre-emptive to try to prevent further aggression on Russia's part, further meddling, further efforts to destabilize the situation in Ukraine. I would argue that both of those have to be part of the goal. Return to the status quo, as difficult and almost impossible as it may seem today, I think has to remain our goal.

Last, I would say that sanctions are as much psychological as they are anything else. I worked in the state department along with Kurt for a number of years, and I was involved in sanctions on Belarus. As long as Lukashenko knew that there were going to be more sanctions if he did not release political prisoners, he was more likely to at least release political prisoners. We did ratchet up sanctions against Lukashenko in Belarus. Russia is much more integrated than Belarus is, and therefore is much more vulnerable to sanctions. If people wonder if they're going to be next on the list, then it might influence their behaviour and actions.

[Kurt Volker]

Mr. Dewar, thank you for the question.

I think you raise a fundamentally important question because, like you, I have not heard a clear goal from the United States government, the G-7 governments, or the European Union. What is it that we are trying to achieve? We are, as David said, in a reactive mode, seeking perhaps to penalize, but we ought to have a clear goal ourselves of what we want to achieve.

Like David, I agree the goal should be to return to the status quo before Russia annexed Crimea. We need to put in place sufficient sanctions that will cause Russia to want to negotiate to get back to that outcome. That would be a heavy mix of sanctions, and it would take some time because Putin believes he can hold out, that he can outlast us.

I think among ourselves we may recognize that we may not get that. We may need to settle for Crimea is gone and we prevent anything else. But I don't think we start there. I think we start with a clear goal of saying it needs to be rolled back. In doing so, we have the virtuous effect of stopping the momentum that Putin has now gathered. If you think about where we were in February, with demonstrations in Crimea, it's now marched on to occupation, to annexation, to demonstrations now in other parts of Ukraine, and talk about referenda in Transnistria. We have to go for the rollback, blunt the momentum, and then be prepared to negotiate an outcome.

[Paul Dewar, NDP, Ottawa Centre, ON]

You've both touched on the importance of civil society. I couldn't agree with you more. If you look at those who were the agents of change there and were the brave actors, you see that it was the civil society members. The ones who I've talked to were not members of political parties per se. They were genuine actors who wanted to see an end to corruption. They wanted to see more freedoms and more democratic participation being allowed.

Who do you see as the key civil society actors? If you don't have that today, it would be helpful if you were to send it to the committee. We're making recommendations, as you know, in our report, and it would be helpful if you could tell us from your knowledge who you think are the key civil society actors to help foment and support democratic growth and stability in the Ukraine.

[Kurt Volker]

Go ahead, David.

[David Kramer]

If I can, I will send you a list of some suggested organizations.

Freedom House does programming in Ukraine with journalists. We work with various organizations to help journalists look at issues of corruption, but also at how to do their job professionally and safely. Journalists also played a very key role in events of the past few months.

There are a number of very worthy organizations that we can pass on to you as a follow-up to this hearing.

[Kurt Volker]

If I may add one thought to what David said, it's that I would include in your outreach Russian ethnic organizations and all political parties, including the Party of Regions, because I think that one of the things we want to foster is Ukraine staying together and being a Ukraine for all Ukrainians.

[Paul Dewar, NDP, Ottawa Centre, ON]

Thank you.

On that last point, the elections are coming up. You mentioned that you want to see them go ahead. What's your opinion about sending in pre-election observers? Are you supportive of that, and if so, why? Do you know of any pre-election observers who will be sent from the United States, and if so, who?

That's for both of you.

[David Kramer]

I think it's critical to send both long- and short-term observers. This is largely the responsibility of the Organization for Security and Co-operation in Europe and its Office for Democratic Institutions and Human Rights, ODIHR. They are putting together observer missions.

The United States, I know, will be participating. I know that some of our sister organizations, the National Democratic Institute and the International Republican Institute, will be sending observers for the elections and ensuring that these elections are credible and meet international standards, because there are going to be efforts to undermine these elections, not least those coming from Russia. Russia will do everything it can to try to discredit these elections. To the extent that we can have credible observers on the ground giving either a thumbs-up or a thumbs-down—I don't want to prejudge the elections—I think it's critically important.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're now going to Mr. Anderson, for seven minutes.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Thank you, gentlemen, for being with us today.

Mr. Volker, you made the comment, “he can go very, very far”. You were talking about Putin's enthusiasm for continuing this. One of the things that we haven't talked a lot about is the fact that this isn't the first.... He's had influence in other areas, including to the southeast and in Belarus, in Georgia.... This is one more step. I'm just wondering, without scaremongering or whatever, where you see it going from here if there isn't concerted action to stop it.

Also, in terms of sanctions, several countries want to put on sanctions, but it seems like everybody wants to put on sanctions that impact somebody else's economy. If you're strong in banking, you want to go after aerospace, and if you're strong in aerospace, you want to go after tech or whatever. I'm just wondering if it's possible for what I would call the disparate interests to unite in sanctions that will be effective.

I'll give you those two questions first, and then we can go on to other things.

[Kurt Volker]

Sure. I'll get my thoughts here, and David, I'm sure you'll chime in.

First off, on your first question, Mr. Anderson, on how far he wants to go, I don't believe that Putin has in mind a particular geography that is his maximum limit or his minimum limit. I think he is playing a long game of rebuilding the Russian empire. I think some things drive him, however. One of them is bringing Russian ethnic populations, Russian speakers, into Russia. Another is exercising determinative influence over any states that are part of the former Soviet Union and that are now bordering Russia. Then he wants to be able to project power from the Russian empire that he has rebuilt into Europe, into the Middle East, into south Asia, wherever he feels that Russian interests can be advanced. I don't think there's a firm line on a map at which he's prepared to say, “this yes, this no”, but those are the drivers that are pushing him.

We see things like the demonstrations over the weekend in eastern Ukraine, where there are Russian ethnic communities. We've seen the same thing in Transnistria. We see the same thing, the kind of propaganda, being directed at Russian ethnic populations in the Baltic States. As I mentioned earlier, we saw this past week a pro-Russian demonstration in Georgia that was the kind of thing we would never have seen a year ago, and where they're not known for a terribly pro-Russian population. I think you see again evidence that Russia is trying to raise the stakes and exert influence in various ways across this wider post-Soviet space.

I'm also worried about the nature of governments that are looking at accommodating themselves with Russia in some way, seeing perhaps weakness or indifference on the part of the west, and perhaps seeing that maybe opportunities are going to be better for them if they join the Eurasian union or if they align with Russia in some way.

That's the scope. Those are the stakes that I think are out there with Russia if we do nothing. That's why I think it is so terribly important that we don't wait, that we don't wait the way we have in Syria. We have to act at the early stages to prevent that gradually creeping ambition on Putin's part.

On your sanctions question, and I'll just be brief about it, I think it's all a question of will. You're absolutely right that somebody will hurt somewhere, based on putting in place economic sanctions. It's a question that leaders of countries need to decide, which is more important for their country and the future of their people: the economic benefit they have today, or living with an aggressive, expansionist Russia in the eastern part of Europe that may swallow more territory, and then may eventually lead to war? I think in order to avoid that latter outcome, our leaders do need to talk seriously with each other about banding together to put in place the toughest measures possible today.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Thank you.

Do you think, on this disruption in eastern Ukraine, that he actually thinks he can move into Ukraine, or do you think he believes that he can actually move right through it? Where do you think he considers that the west is going to say no?

[Kurt Volker]

I think at this point he doesn't believe the west is going to say no. We've heard various western senior officials or government leaders say that there is no military option, that there's no military solution, so don't talk about military responses to this. As long as Putin hears that—and I know that he not only hears it; he believes it—then he thinks he can do what he wants.

Now, he's going to be careful about doing this. I think he may have learned a few lessons from his invasion of Georgia six years ago. He's looking to create appearances of legitimacy through referenda, through popular movements, people calling for Russian peacekeepers to come in, accusations that the government in Kiev is fascist. He's looking to create these veneers of legitimacy and legality that create a demand for Russian troops to come in.

I also think that he's going to try—and this is very World War II-ish—a pincer movement, where you have Transnistria in the west saying that it wants to be part of the Russian Federation, the eastern provinces in Ukraine saying they want to be part of the Russian Federation, and probably you'll see some demonstrations agitated in Odessa, which will demand some kind of Russian security presence there. I think you could see a very quick marrying up of Russian forces to, what Russia would say, restore order and protect the rights of Russian minorities in Ukraine.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Can I change direction a bit? I don't think I have too much time left.

[Technical difficulty—Editor]

[The Chair, Conservative, Dean Allison]

David, you still only have a minute left.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Gentlemen, it's a very short time I have here, but I wanted to ask what influence are the leaders of Maidan having in Ukraine right now?

Also, and you talked a bit about this, do you see any particularly meaningful technical assistance that we can provide to train political parties, and perhaps independent media in Ukraine, understanding some of the restrictions that they're facing right now?

Either one of you or both of you can answer.

[David Kramer]

Mr. Anderson, I would say that players in Maidan are playing both a positive and negative role.

On the negative side, the Pravy Sektor, the Right Sector, forces and some from Svoboda, the Freedom Party, have been given three government positions. I do think there has been an inflation of the concerns about the role of these parties. Their polling is very low, so they're not likely to do well in the upcoming elections, but it is worth keeping an eye on, also to help ensure that inflammatory statements and extremist measures are condemned as quickly as possible.

On the positive side, I think we've seen the interim government step up in very difficult circumstances. Let's keep in mind that they inherited the leadership rather unexpectedly; Yanukovych departed rather quickly, and then within a week they were faced with a Russian invasion. So their challenge is made doubly difficult.

I do worry that parties in Ukraine have been too dependent on personalities and not on platforms. That's where I think Canada, the U.S., and Europeans could provide some assistance.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Will that continue this time?

[The Chair, Conservative, Dean Allison]

That's all the time we have. We're going to have to come back.

Mr. Garneau, for seven minutes please.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

I'd like to pursue, perhaps in more specific terms, what Mr. Volker, and I think Mr. Kramer agreed with him, referred to as keeping military options on the table.

I'd like to get down to something specific. Obviously there are NATO countries—and that's the context in which you spoke about it—who are nearby, but Ukraine itself is not a NATO country. What were you specifically suggesting in terms of messaging that appears to have been taken off the table that should be put back on the table? Does it go as far as to say that if Russians go into eastern Ukraine some kind of action could be triggered by NATO countries? I'd like to have something more specific based on what you've said.

Perhaps we can start with Mr. Volker, and then Mr. Kramer, please.

[Kurt Volker]

To be clear, I do draw a very clear distinction between NATO allies and non-allies. For NATO allies, it has to be absolute: we will defend each other. For non-allies, I think it is fair to say that we have an interest in their sovereignty, their territorial integrity, and that we will provide assistance to them because we believe that provides for the long-term stability and security of Europe.

In order for the second part of that to be credible, and to have a deterrent effect—which is the second part, defence for the allies and deter Russian aggression elsewhere—we have to have some pieces on the table. At the moment we really don't. We have started to put a few in place, but not many.

Putin has quite substantial pieces on the table: tens of thousands of troops on the eastern border of Ukraine, special operations forces in Crimea and probably now in eastern Ukraine as well. So he has a lot out there. What we need to do on the political level, and we have to mean it if we say it, is make clear that we are not indifferent to further territorial aggression by Russia and that we reserve a right to respond.

Also, we need to put in place the forces that would be necessary to make that threat credible, which is why I suggested a ground exercise in Poland or in Romania, some additional air defence assets, perhaps in the Baltic States or Romania. A naval exercise with Romania was already planned. We could extend that. We could put a number of things on the table surrounding the area to show that we have some capability.

The other thing I would do is give immediate and substantial assistance to the Ukrainian military and Ministry of Defence so that they are in a better position to fight back against Russia, which would raise the costs to Russia in direct terms. This would be Ukrainians fighting for their own territory to a point that might cause Russia to pause. And if such a conflict did break out because Russia did go further and invade Ukraine, I think we'd have to then discuss what further steps we would want to take to provide additional assistance to Ukraine.

[David Kramer]

Very quickly, I would say Secretary of State Kerry had it right on March 2 when he appeared on a number of talk shows here and said that all options are on the table.

None of us wants the military option. I'm not advocating it, and I realize there's a need not to raise false expectations among Ukrainians that the United States or Canada or Europe is going to come running to their rescue militarily. But I also think we should not be telegraphing our limitations to Putin. We shouldn't be drawing the line saying that we'll do up to this point. Otherwise, frankly, I don't see a reason to send ships to the Black Sea if we're already telling Putin we're not going to use them. It seems to me we want to keep Putin guessing as to what we might do, not to escalate the situation, but just the opposite, to try to de-escalate it so he thinks there could be other ways we would respond.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Thank you.

Again, I have a question for both of you, starting with Mr. Kramer.

On the issue of economic sanctions and acting not just reactively but proactively, it seems to me that by far the most disproportionately important resource in all of this is what people have been talking about, which is the oil and gas that comes from Russia. There's no question this is a very important source of income for the Russian economy. It's also very clear that it would inflict a lot of pain on many European countries, some of whom depend 100% at this point.

Do you think that if the European Union, because they're the ones that are going to be involved here, has the resolve to play tough, and we have a situation that develops whereby these supplies are cut off, that Russia will blink before the European Union does? Do you think a winner can come out of this? It seems to me that this one, notwithstanding other sanctions that we've talked about, is the biggest elephant in the tent. I'd like your opinion on that.

[David Kramer]

There are a few things.

One, Russia has already nearly doubled the price it's charging Ukraine for gas, so Ukraine is now facing a crisis as a result of Russia's extortionist efforts.

Two, Russia needs the price of oil to be at about $108 to $110 a barrel. If we are able to increase the supplies of oil to the global community, but particularly to Europe, and drive the price down, that will cause economic problems for Russia. Russia already has economic problems that I identified, so I think it is vulnerable to this.

Moreover, we can help Ukraine reduce its energy dependence on Russia. Ukraine is a tremendously inefficient user of energy. I think it has roughly six to eight times the use of energy that Germany has, even though Germany has twice the population and is much more productive. We can also work with a number of the European countries that you indicated are heavily dependent on Russia to come up with alternatives.

None of these steps will be quick, but they're steps we should have been taking before and we absolutely have to be taking now.

The last point I would mention is that all too often it's cited that Russia has this leverage over the west because of the west's dependence on Russia for energy. If the west reduces its dependence on Russia for energy, that oil and gas that Europe doesn't buy isn't going to be worth anything to Russia. Russia can't simply flip a switch and send all the oil and gas to the east. It takes a lot of investment. China's already getting quite a bit of it from Turkmenistan. China also may have shale gas possibilities, so we have leverage if we choose to exercise it.

As Kurt mentioned earlier, it's a matter of political will, and I think the Europeans in particular, as you identified, sir, are the critical players on this.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Thank you.

Mr. Volker, I'd like your thoughts, and I'll perhaps throw in an additional question, which is—