Russian govt admits economy in crisis as Ukraine weighs

By Darya Korsunskaya and Lidia Kelly

MOSCOW - Russia's government acknowledged for the first time on Monday that the economy was in crisis, undermining earlier attempts by officials to suggest albeit weakening growth could weather sanctions over Ukraine.

Moscow markets wait to see the full scale of western measures over the seizure of Ukraine's Crimea and support of its referendum to join Russia, after losing billions of dollars in recent weeks in state and corporate money.

For weeks, Russian officials have said the confrontation between Moscow and the West over Ukraine that threatens economic sanctions and asset freezes would "weigh on the economy".
Although not speaking directly about the impact from the conflict, Deputy Economy Minister Sergei Belyakov said on Monday the economy was in trouble.

"The economic situation shows clear signs of a crisis," Belyakov told a local business conference.

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Germany sees Russia 'isolated' over Crimea referendum

BERLIN - German Chancellor Angela Merkel believes Russia has isolated itself on the world stage by carrying out a referendum in the Ukrainian region of Crimea despite international rejection of the vote as illegal.
"Russia is isolated to a large degree in its recognition of this so-called referendum," Merkel's spokesman Steffen Seibert said, pointing to Saturday's vote at the U.N. Security Council where 13 countries rejected the referendum as invalid, China abstained and Russia stood alone, using its power of veto.
Seibert said Germany urged Russia to refrain from any military activity on Ukrainian territory which was not agreed upon with the transition government in Kiev - though Moscow rejects the current Ukrainian government as illegal.

(Reporting by Erik Kirschbaum; Writing by Stephen Brown)

Reuters: White House says it rejects referendum in Crimean region of Ukraine; calls Russia's actions 'dangerous and destabilizing'

U.S. warns Russia it faces isolation, sanctions in coming days

WASHINGTON, March 16 (Reuters) - The White House warned President Vladimir Putin on Sunday that Moscow would face sanctions in coming days and international isolation that will hurt Russia's economy, as Washington fumed over a referendum in Ukraine's Crimea region that it was powerless to stop.

"We are putting as much pressure on the Russians as we can to do the right thing," White House senior adviser Dan Pfeiffer said as voters in Crimea, under the control of Russian forces, decided whether to break away from Ukraine and join Russia.

With Sunday's referendum widely expected to favor union with Russia for a region that has a Russian-speaking majority, some of President Barack Obama's Republican critics accused the administration of showing weakness in the Ukraine crisis and said now was the time for U.S. resolve.

Pfeiffer insisted the United States would not recognize the results of the referendum and said the administration was working with European partners to step up pressure on Russia in the worst East-West standoff since the Cold War. Crimea's pro-Russian regional government went ahead with the referendum despite U.S. and European threats against Moscow.

“You can expect sanctions designations in the coming days,” Pfeiffer told NBC’s Meet the Press, as the administration prepares to identify Russians whom the United States will seek to punish with visa bans and asset freezes the president authorized last week.

While the United States and its allies essentially have ruled out military action, Pfeiffer sidestepped the question of whether Washington would provide military aid to Ukraine's interim government, which has accused Russia of violating its sovereignty over Crimea.

"We’re looking at all ways of assistance," Pfeiffer said.

He called on Congress to pass an economic aid bill for Ukraine that has stalled due to political wrangling.

Pfeiffer said Putin has a choice. "Is he going to continue to further isolate himself, further hurt his economy, further diminish Russian influence in the world, or is he going to do the right thing?" he said.

Republican Senator John McCain, just back from a visit to Ukraine, urged the Obama administration to do more. He called for military assistance to Ukraine, resumption of development of a U.S. missile defense system for Eastern Europe and steps toward NATO membership for Georgia and Moldova.

“The United States of America has to first of all have a fundamental reassessment of our relationship with Vladimir Putin. No more 'reset' button," McCain told CNN, referring to Obama's outreach to Russia early in his first term that has since been abandoned.

Tennessee Sen. Bob Corker, the top Republican on the Senate Foreign Relations Committee, told Fox News "there’s no question our administration has created an air of permissiveness" by failing to take a tougher line with Russia.


(Additional reporting by Toni Clarke, Bill Trott and Andy Sullivan, editing by Rosalind Russell)

Obama phoned Merkel on Friday to discuss Ukraine situation

FLORIDA CITY, Florida, March 7 (Reuters) - President Barack Obama telephoned German Chancellor Angela Merkel on Friday from his vacation resort in Key Largo, Florida, to discuss the situation in Ukraine, the White House said.

Russians take over Ukrainian military post, no shots fired

SEVASTOPOL, Ukraine - Armed men thought to be Russians drove a truck into a Ukrainian missile defense post in the Crimea region on Friday and took control without a shot being fired, a Reuters reporter on the scene said.

Initial reports said the truck had smashed through the gates and that post in the city of Sevastopol was being stormed but the reporter could not see any signs of the gates being damaged.

A Ukrainian military official, Vladislav Seleznyov, said by telephone that the armed men took over the base without any shooting and that no one was hurt.

Another Ukrainian official told Reuters at the post that he was now mediating between the Ukrainian forces and the armed group inside, and that no arms had been seized.

(Reporting by Andrew Osborn and Pavel Polityuk, Editing by Timothy Heritage)

Armed men enter Ukrainian military post in Crimea and take control; no shots fired: Reuters reporter on scene