QUESTION: Thank you Victoria Nuland for being here with us.
ASSISTANT SECRETARY NULAND: Thank you, David, for having me.
QUESTION: So tell me. There was this election in Ukraine, and it has enormous importance for Ukrainians, of course, but what importance does it have for U.S.-Russia relations, which have been in a ditch for months now?
ASSISTANT SECRETARY NULAND: Well you’re right, David, it was a spectacular day for the people of Ukraine who went out in force to choose a new president and to say to their government and to the world that they want a future that is unified, that is democratic, that is prosperous and that is rooted in Europe.
In terms of the U.S.-Russia relationship, I think time will tell. The President of Russia has said that he will respect the results, that he will work with the elected president. So if that is in fact the case and if things begin to deescalate in Ukraine that will be a good thing, not just for Ukraine, but also for U.S.-Russia relations and Russia’s relations with the rest of the world. But time will tell.
QUESTION: Has Vladimir Putin found his limit here? He snatched away Crimea. That seems not even in question anymore. And now there seems to be, at least to some extent, a retreat. Has he taken from this situation what he wanted from it? And obviously his popularity has shot up through the roof. He’s won in his terms, has he not?
ASSISTANT SECRETARY NULAND: Well, first of all I don’t think it’s wise for anybody to try to get inside the head of President Putin given what has happened just in the last four months.
Let me take issue with one thing you said there, which is with regard to Crimea. Neither the United States nor the Europeans nor most of the civilized world has recognized what Russia did in Crimea. We still respect the full sovereignty and territorial integrity of Ukraine. And as part of the sanctions that we have imposed on Russia we’ve imposed harsh sanctions on those running Crimea now and on the economic relationship with Crimea and that will continue.
With regard to where Putin goes from here, as I said, I think we just don’t -– don’t know yet. It will depend very much on whether he decides to reach out to President-elect Poroshenko and whether he’s interested in deescalating. We have now seen Russian troops that were on the border surrounding Ukraine begin to move back to their bases. That is a good thing. But we’ve also seen continued destabilization in eastern Ukraine just in the last couple of days that is very worrying.
QUESTION: What kind of destabilization -- and do you expect it to continue?
ASSISTANT SECRETARY NULAND: Well, we saw a separatist attack on the airport in Donetsk which has resulted in very severe fighting over the last couple of days and many, many casualties. That was an attack to try to take the airport using very sophisticated weaponry of the kind that easily could have been provided from the outside. We’ve also seen an effort that the Ukrainians were able to interdict -- to ship high-tech weaponry from Crimea to the eastern oblasts. And of course on Election Day we saw considerable intimidation of election workers, the smashing of electoral boxes, and cyber attacks on the Central Election Commission of the kind that generally would require outside support.
So worrying, worrying, but it’s very much a mixed picture now.
QUESTION: Ukraine has a new leader, Petro Poroshenko, who is known as the Chocolate King. He has made over a billion dollars. He’s known as an oligarch to use the shorthand of the region, but he also gained enormous respect with a lot of voters because of his support of the Maidan demonstrations.
But we know one thing that’s plagued Ukraine since the fall of communism in the Soviet Union, since 1991, is the complete failure of its political class on all sides, and a level of corruption that is remarkable. Why is this guy any different?
ASSISTANT SECRETARY NULAND: Well you’re absolutely right that corruption has been a cancer on Ukraine and the people of the Maidan went out for a number of reasons. First and foremost because President Yanukovych promised to take them to Europe and then reneged. But equally importantly, it was because they felt ripped off by their leadership. They felt like the money of the state was going into official pockets rather than being used for their benefit, so they are demanding now of President-elect Poroshenko, and in fact he ran on a platform of clean government. So he’s going to have to deliver.
As part of the IMF package, the International Monetary Fund support to Ukraine, the Ukrainians have already begun passing the kind of legislative basis that they need to clean up corruption. Things like transparency in public procurement. But President-elect Poroshenko is going to have to not only talk the talk, he’s going to have to walk the walk. He’s talking about things like e-governance. So we will see.
But as you said, he is somebody who has a long career not only in business but also in politics in Ukraine, but very early in this Maidan struggle he picked sides and he stood with the people of the Maidan. He actually interposed himself physically at certain key moments to call for non-violence. He stood on –- on a front loader at one point when folks were shooting at each other and said stop, this is not the way we behave.
So he’s put his own physical security on the line for a new Ukraine, but it’s going to be a tough job.
QUESTION: But even during the Orange Revolution in 2004 we saw heroic action by Yushchenko and others, and then followed by grandiose disappointment and widespread corruption again. Why is this going to be any different? And shouldn’t there be an accounting of all the Western money that’s come from the IMF and elsewhere before more money goes into Ukraine and more support?
ASSISTANT SECRETARY NULAND: Well there certainly will be an accounting, and one of the things that the IMF has done this time as a result of its experience, including its negative experience in 2004 and 2010, is it’s doling out the money in relatively small tranches attached to real reform.
So again, President-elect Poroshenko is going to have to demonstrate that he is ready to change the way Ukraine’s done business not only for the IMF, but for all of the people who went out to vote for him, and that’s going to be the number one thing that people of all generations in Ukraine are going to expect -- and particularly the younger generation that led this Maidan effort. They’re just sick of the country being ripped off, and they’re going to hold him to account.
QUESTION: I think we’d agree that Vladimir Putin is the main culprit in all this, particularly in the destabilization of eastern Ukraine, the snatching up of Crimea, but when we look back at this prolonged episode, what lessons can the West learn about itself and the U.S. in particular, about the way we played this? Was the EU, for example, bluffing when it was trying to draw Ukraine into -- toward the EU? Ukraine, as you know, is an economic basket case. Was the EU really serious about bringing Ukraine into its ambit? Did we play this politically as well and as deftly as we could have?
ASSISTANT SECRETARY NULAND: Well, I don’t think the EU was bluffing. I think the EU’s offer to Ukraine of association and visa-free travel and no barriers –- no tariff barriers -- was a very generous one.
I think what –- what we all underestimated, even though we were talking about it and thinking about it, was the ability of the Russian Federation to exact its own economic retribution on Ukraine. And so what we really needed was the IMF economic reform package and support package moving in conjunction with association in the fall so that the Ukrainian economy would’ve had a safety net. Because what happened was, at the end of the day, the Russians were able to say we will crash your economy if you join Europe -- and there wasn’t a sufficient Western alternative for Ukraine. So that’s certainly one lesson learned.
Another lesson learned is that really we don’t need economically, necessarily, to force a country like Ukraine to choose. It ought to be able to have a strong relationship with Europe and also maintain a lot of its historic trade to Russia. And if we can do this right, Ukraine could actually become a throughput for better, cheaper trade between Europe, Ukraine, and Russia -- and everybody could conceivably benefit. But we needed to have that conversation in a more rigorous way I think.
QUESTION: What does this episode tell you about the future as far as Vladimir Putin is concerned? How is he different, or not, in your view from the Vladimir Putin who came to office in 2000?
ASSISTANT SECRETARY NULAND: Well I think the first thing that is different is that for the first time in the post-Cold War period, he was ready to send his military in to change borders by force, unprovoked, without any expectation of that. So if you will do that once, you will do that again.
But I think the other thing that perhaps Russia is learning, or that President Putin is learning, is that this is a different Russia than it was 20 years ago in the sense that it is now deeply integrated into the world economy, into the European economy, so that when we as a European and American community, a transatlantic community, start putting sanctions on Russia, it really bites. They can’t disassociate their politics and their economics. So he’s going to have a hard time having these kinds of aggressive adventures without having it cost the Russian people in terms of their own prosperity and their own future. And that creates a vulnerability for him. They’re going to start asking, “Where are our hospitals? Where are our roads? Where are our schools?” as he goes on these foreign adventures. So that might be part of why we see him moderating now, that he needs a good relationship with Ukraine and he needs a good relationship with Europe and with us.
QUESTION: Part of your job as an analyst and as a diplomat is to try to see the world as Vladimir Putin sees it, and he sees it now with enormous resentment. He sees it as a generation-long humiliation of Russia. Of NATO enlargement when he had been promised otherwise. You know the litany of complaints directed at the West and the United States. Does he not have a point on any of his litany of resentments, I would say?
ASSISTANT SECRETARY NULAND: Well President Putin and many in his circle and of his generation certainly have persuaded themselves that they have a narrative of grievance with the transatlantic community and with the West, but David, I have to tell you that I lived and worked through that diplomatic period from 1991 when the Soviet Union fell apart and Russia was -- was born, and I have to tell you that all of us -- Washington, Berlin, Paris, London, Rome -- worked tirelessly to try to offer Russia throughout those years an opportunity to knit itself into our community. Just as one example, the NATO-Russia Founding Act, where we committed that NATO nations would sit with Russia together to talk about all of our major security concerns, that was an opportunity for Russia to really work coequally with NATO. But instead they used it as a place to argue and as a place to complain, rather than to try to build together.
So I think there were many, many missed opportunities on Russia’s side to work collaboratively -– collaboratively with us as we work with each other. So -- I just regret that because I think we might have had a very different Russia today if President Putin and other leaders had taken advantage of some of the opportunities that we had on the table.
QUESTION: Vladimir Putin -- one last question -- Vladimir Putin could be President for another decade. Is there anything conceivably that will turn him back in another direction -- or do you think there’s much more xenophobic, conservative and kind of highly conservative moralism that he’s been creating as a state ideology will be relaxed -- with a media that’s tightened up and censorship that’s been exerted? Is there any conceivable notion in your mind that Vladimir Putin will go the other direction and liberalize before he leaves office? Otherwise we are, are we not, destined for a very bad road for another decade?
ASSISTANT SECRETARY NULAND: Well I think if President Putin continues on the road that he’s on, which is to isolate his own country and create barriers for particularly younger people to interact with the rest of the world, and to continue on the current economic path that he’s on, which is to raise tariff barriers through things like the Customs Union rather than doing what the rest of us are doing, which is trying to have free trade agreements and lower them; and if he doesn’t diversify his economy, he’s not going to be able to continue to produce for the Russian people. His compact with them in his first term was, “you leave the politics to me and I will put a chicken in every pot,” so to speak. I will grow the economy, you’ll get to go to Ikea and travel to Greece on vacation. But right now what he’s produced in his first term is an economy that is stagnant, that is on the verge of recession, and a lot of temporary patriotic fervor but not a lot of new opportunity for the Russian people.
And just look at what happened when he started talking about closing down Twitter. Even his Prime Minister said that’s crazy. And the next generation of Russians don’t want to be cut off. So I think if we stay unified in continuing to offer him a way to work with us if he will live by the international rules of the road, but at the same time being firm in terms of costs and sanctions if he continues to be predatory vis-à-vis his neighbors, then --
QUESTION: But this is part of his litany of complaint. When we have the Iraq War in our past and we talk about international law and the sanctity of borders, he doesn’t believe us. Why should he?
ASSISTANT SECRETARY NULAND: Well the incidents that he raises are very, very different from circumstances where you had had years and years and years of UN Security Council Resolutions, years and years of diplomacy to try to settle disputes as compared to what he did in Crimea which was decide in about three weeks’ notice that it was Russia’s and he was going to take it.
So again, there is a dialogue to be had. We want to have it. We want to start with Russia and Ukraine, resetting their relationship in the wake of these elections. But it really is a question of whether Putin is ready for that or not.
QUESTION: Victoria Nuland, thank you very much.
ASSISTANT SECRETARY NULAND: Thank you, David.