Bloomberg News

Russia Pulls Back Some Troops Amid Moves to Ease Ukraine Crisis

March 31, 2014

Modified T-72 Russian Tanks

A man stands near a trainload of modified T-72 Russian tanks at Gvardeyskoe railway station near the Crimean capital Simferopol, on March 31, 2014. Photographer: Olga Maltseva/AFP/Getty Images

Russia began pulling back some troops from Ukraine’s eastern border as diplomatic moves continued to ease the crisis over its annexation of Crimea.

President Vladimir Putin told Chancellor Angela Merkel in a phone call he’d ordered a partial withdrawal, the German leader’s office said in a statement in Berlin. A Russian motorized battalion was returning to its base in the Samara region on the Volga river after exercises near the Ukrainian border, the Interfax news service cited the country’s Defense Ministry as saying.

U.S. Secretary of State John Kerry and his Russian counterpart, Sergei Lavrov, discussed Ukraine by phone today, the Russian Foreign Ministry said, a day after four hours of talks between the two top diplomats in Paris. The contacts are helping to ease investors’ concerns over the crisis, the worst standoff between Russia and NATO countries since the fall of the Iron Curtain.

“I have the impression that a process of reflection has begun” in Russia, Merkel told students at a Berlin school earlier today. “We would also like to have Russia closer to Europe if it plays by the rules.”

Putin and Merkel also discussed “possible further steps to stabilize the situation in Ukraine and in Transnistria,” the breakaway pro-Russian region of Moldova on Ukraine’s southwest border, according to the chancellor’s office.

‘Constitutional Reforms’

Putin’s office said in a statement the two leaders agreed to continue close cooperation, while saying the Russian president had stressed the need for “constitutional reforms” in Ukraine that would also reflect the interests of Russian-speakers concentrated in the east of the country. Ukraine has rejected the Kremlin’s demands that it grant its regions greater powers.

The Russian ruble strengthened the most since September 2012, adding 1.6 percent to 35.2230 per dollar by 6 p.m. in Moscow and trimming its quarterly decline to 6.8 percent. The Micex Index (INDEXCF) added 1.9 percent to 1,369.29 by the close, the highest since Feb. 28. That cut its three-month drop to 9 percent.

A partial Russian withdrawal would be a “welcome preliminary step” if reports of the troop moves are accurate, U.S. State Department spokeswoman Jen Psaki said in an e-mail. Defense Secretary Chuck Hagel told reporters at the Pentagon he can’t confirm whether Russia is pulling its troops back.

Russian Rationale

Shrugging off sanctions from the U.S. and its European allies, Putin has justified Russia’s takeover of Crimea as righting a historical wrong that split the region off from Russia when the Soviet Union collapsed.

Russia gave no details of today’s call between Lavrov and Kerry. At last night’s meeting in Paris, the secretary of state demanded Russia pull its forces back from the frontier, saying they were “creating a climate of fear and intimidation in Ukraine.”

Kerry expressed concern that what the U.S. estimates to be 40,000 troops massing on Ukraine’s border may signal Russia is ready to invade. “Any real progress in Ukraine must include a pullback of the very large Russian force,” he told a news conference.

Lavrov said that while he and Kerry expressed differing views on the reasons behind the crisis, they were in agreement on “the need to seek common ground on the diplomatic path for an exit from this situation that will meet the interests of the Ukrainian people,” according to Russia’s Foreign Ministry.

Crimea Trip

Russian Prime Minister Dmitry Medvedev today paid the first visit to Crimea by a top official since Putin annexed the Black Sea peninsula. He pledged to create a special economic zone in the region and to raise state salaries to the Russian average by July.

“No resident of Crimea or Sevastopol should lose anything as a result of joining Russia, they should only gain,” Medvedev told a government meeting in the peninsula’s capital, Simferopol. “This is what people are expecting from us, that we provide the conditions for a stable and decent life, certainty in the future and the feeling that they are part of a great nation. We must meet these expectations.”

Russia is in the process of granting citizenship and contracts to 7,800 Crimean military personnel who asked to join Russian forces, Deputy Defense Minister Nikolay Pankov said in an interview in Simferopol.

“We’re not forcing anyone,” Pankov said. “We’re not trying to convince anyone. We’re being genuine and respectful to everyone.”

‘Crude Violation’

Medvedev’s trip without the agreement of Ukraine is “a crude violation of the existing norms in international communication,” Ukrainian Foreign Ministry spokesman Yevhen Perebyinis said in televised remarks. The ministry will monitor “such defiant provocation and anti-Ukrainian steps by the Russian Federation,” he said.

Acting Ukrainian President Oleksandr Turchynov dismissed the Kremlin’s demands for more regional autonomy in his country. “Russia’s leaders should deal with the problems of the Russian Federation, not Ukraine’s problems,” he said in a statement on his website.

The U.S. and the European Union have vowed to intensify sanctions on Russia’s military, energy and financial industries if it pushes further into Ukraine. Kerry said the U.S. considers Russia’s actions to be “illegal and illegitimate” and that it’s “on the wrong side of history.”

To contact the reporters on this story: Ilya Arkhipov in Simferopol, Crimea, at iarkhipov@bloomberg.net; Henry Meyer in Moscow at hmeyer4@bloomberg.net; Kateryna Choursina in Kiev at kchoursina@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net Eddie Buckle


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