Politics
Obama Faces Major Foreign Policy Test in Showdown with Russia’s Vladimir Putin
The US, along with other leading industrialized nations Canada, France, Germany, Italy, Japan and the United Kingdom, have already suspended preparatory talks for the G8 Summit scheduled to be held in Sochi this June. But Putin, the former KGB colonel, has countered such charges, stating in a press conference from his residence outside Moscow on Tuesday that Russia reserves the right to use “all means” necessary to protect its citizens in Ukraine.
Charging that the US and its Western allies embrace double standards, he further asserted, “Our actions are often described by the West as not legitimate, but look at the U.S. operations in Afghanistan, Iraq and Libya. Our actions are legitimate from the point of view of international law because Ukraine’s president asked us for help.”
If Moscow refuses to back down, however, Obama administration officials say they may take even more punitive action if Moscow refuses to back down. “There could be, ultimately, asset freezes, visa bans. There could certainly be disruption of any of the normal trade routine. There could be a business drawback on investment in the country,” Kerry said on Sunday show,Meet The Press.
Even without the initiation of economic sanctions, Russia is already feeling the pain. On Monday, the Moscow stock market suffered one of its biggest one-day declines in recent years and the ruble plunged sharply in reaction to the Kremlin’s maneuver. Moreover, companies on the Moscow stock exchange have lost billions in market value. And the central bank raised its main interest rate from 5.5% to 7% – the largest hike since financial crisis that hit Russia in 1998.
The Moscow stock market was not alone in taking a battering though. US stocks and other global equities took a nosedive on Monday due to jittery investors. The S&P 500 Index fell 0.7 % to 1,845.73, the biggest slide in a month, wiping out a gain for the year after the index finished last week at a record.
The Dow Jones Industrial Average dropped 153.68 points, or 0.9%, to 16,168.03. In Europe, Germany’s DAX was walloped, plummeting 3.1 % – one of its biggest daily declines in eight months – while the continent’s other major stock markets dipped about 2%. The yen, U.S. Treasuries and gold rose as investors sought safe havens. Energy prices are also expected to rise in Europe since Russia supplies 30% of the continent’s natural gas and the Trans-Siberian Pipeline – one of its main export pipelines, runs through the Ukraine, according to TheGuardian.com.
