EFTA01453398.pdf

The EU, with closer economic ties to Russia, hasn't gone as far as the U.S. The 28-nation bloc saddled 21 Russian and Crimean officials with asset freezes and visa bans on March 17, and may widen that list to include close Putin associates at a summit in Brussels today and tomorrow. Chancellor Angela Merkel of Germany, Russia's biggest EU trading partner, said it's too early to start economic retaliation. "We will make very clear that in the case of further escalation we will be ready to introduce economic sanctions," Merkel told reporters before the EU summit. Sanctions require the agreement of all EU governments, a consensus-building process that can't match Putin's speed in mobilizing troops in Crimea, staging the secession referendum and moving toward annexation. Ukraine Tensions Tensions continue to rise in the region. The government in Kiev said yesterday it plans to reinforce its eastern border with Russia and withdraw troops from Crimea, ceding control of the Black Sea peninsula. Obama said Russia's continuing military movements carry "dangerous risks of escalation." U.S. Defense Secretary Chuck Hagel spoke by phone today with Russian Defense Minister Sergei Shoigu to clarify Russia's intentions for its troops amassed along the border with Ukraine, Rear Admiral John Kirby, Hagel's spokesman, said at a news conference. Shoigu told Hagel that Russian troops are arrayed along the border only for military exercises, Kirby said. Russian troops won't cross the border into Ukraine and "would take no aggressive action," Kirby said Hagel was told. "It was a lengthy call, lasting about an hour, and I think it's fair to say that at times it was direct," Kirby said of the exchange. NATO Allies Obama said that while in Europe, he will reinforce the U.S. commitment to the North Atlantic Treaty Organization and the defense of any member that comes under attack. Those allies include several on the front lines of the confrontation, such as former Soviet satellite states Poland and Lithuania, which got visits by Vice President Joe Biden earlier this week. Obama has emphasized that there are no plans to confront Russia militarily. "We do not need to trigger an actual war with Russia," Obama said in an interview with St. Louis television station KSDK recorded at the White House yesterday. "The Ukrainians don't want that, nobody would want that." In his remarks today, Obama again urged the U.S. Congress to finish work on an aid package for Ukraine, which includes $1 billion in loan guarantees. The aid has been tied up by opposition from House Republicans to a provision that would transfer funds to boost the U.S. share at the International Monetary Fund. The administration argues that the funding would help the IMF assist Ukraine. "Expressions of support are not enough," Obama said. "We need action." Loan Guarantee CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0 110962 CONFIDENTIAL SDNY_GM_00257146 EFTA01453398