President of the United States Barack Obama and Chancellor of Germany Angela Merkel held a press conference on May 2, 2014. They discussed the situation in Ukraine, potential additional sanctions against Russia, the Transatlantic Trade and Investment Partnership (T-TIP), and negotiations on rules for intelligence collection.
Q Thank you, Mr. President. With violence today in Ukraine, you've said today that Germany and the United States are united in efforts to deescalate. But have you been able to reach any common ground with the Chancellor on sectoral sanctions, particularly the energy -- the Russian energy section -- sector? What's next if you're unable to?
And to Chancellor Merkel, reports in the U.S. press have suggested that you've said that you believed President Putin may not be in touch with reality. Is that what you've said, is that what you believe? And could you give us -- you talked to him earlier this week -- could you give us a little more insight into what he might be thinking? And do you believe that he is a threat to Europe? Thank you.
PRESIDENT OBAMA: Obviously, every day we're watching the events in eastern Ukraine and southern Ukraine with deep concern. And I think that what you've seen over the course of the last several months in the midst of this crisis is remarkable unity between the United States and the European Union in the response.
We have at the same time offered a diplomatic approach that could resolve this issue. We have been unified in supporting the Ukrainian government in Kyiv -- both economically, diplomatically, and politically. And we have said that we would apply costs and consequences to the Russians if they continued with their actions. And that's exactly what we've done. And you saw just over the course of the last week additional sanctions applied both by the Europeans and the U.S.
The next step is going to be a broader-based sectoral sanctions regime. And what we have said is, is that we want to continue to keep open the possibility of resolving the issue diplomatically. But as Angela Merkel said, if, in fact, we see the disruptions and the destabilization continuing so severely that it impedes elections on May 25th, we will not have a choice but to move forward with additional, more severe sanctions. And the consultations have been taking place over the course of the last several weeks about what exactly those would look like, and would apply to a range of sectors. The goal is not to punish Russia; the goal is to give them an incentive to choose the better course, and that is to resolve these issues diplomatically. And I think we are united on that front.
Within Europe, within the EU, I'm sure there has to be extensive consultations. You've got 28 countries and some are more vulnerable than others to potential Russian retaliation, and we have to take those into account. Not every country is going to be in exactly the same place. But what has been remarkable is the degree to which all countries agree that Russia has violated international law, violated territorial integrity and sovereignty of a country in Europe. And I think there's unanimity that there has to be consequences for that.
How we structure these sectoral sanctions the experts have been working on, and we anticipate that if we have to use them, we can. Our preference would be not to have to use them. And I thank Chancellor Merkel's leadership on this front. She has been extraordinarily helpful not only in facilitating European unity, but she's also been very important in helping to shape a possible diplomatic resolution and reaching out to the Russians to encourage them to take that door while it's still open.
Q Do you feel confident you have German support on sectoral sanctions, particularly the energy sector?
PRESIDENT OBAMA: You've got to keep in mind that when it comes to sectoral sanctions we're looking at a whole range of issues. Energy flows from Russia to Europe -- those continued even in the midst of the Cold War, at the height of the Cold War. So the idea that you're going to turn off the tap on all Russian oil or natural gas exports I think is unrealistic. But there are a range of approaches that can be taken not only in the energy sector, but in the arms sector, the finance sector, in terms of lines of credit for trade -- all that have a significant impact on Russia.
I don't think it's appropriate for us to delve into the details at this stage because our hope is that we don't have to deploy them. But what I can say is, is that our experts at the highest level, and not just bilaterally, but multilaterally through the European Commission and our diplomatic teams, have been working through all the possibilities, and we're confident that we will have a package that will further impact Russia's growth and economy. But again, our hope is that we shouldn't have to use them. We're not interested in punishing the Russian people. We do think that Mr. Putin and his leadership circle are taking bad decisions and unnecessary decisions and he needs to be dissuaded from his current course.
CHANCELLOR MERKEL: (As interpreted.) It is, I think, obvious to all that there are very different assessments on what happens in Ukraine. On the one hand, you have the United States and Europe -- we've always taken our decisions together -- and on the other hand, the Russian appreciation and appraisal of the situation. I hope that Russia will live up better in the future to its responsibilities. But we need to see deeds matching up their words.
We don't have any release of the hostages of the OSCE, among them also four German hostages. This is a very crucial step that needs to happen first. We have not yet seen any implementation of the Geneva agreement by the Russian side. The Ukrainian side has taken some steps in the right direction. And the OSCE, too, is an organization to which we wish to accord a greater role so that they can prepare and pave the way for elections.
And one word on sanctions. I agree with the American President; they are not an end in itself, but combined with the offer that we want diplomatic solutions, it is a very necessary second component to show that we're serious -- we're serious about our principles. And there is a broad base, a broad range of possibilities that are being prepared for in the European Union. In Europe, we have taken a decision that should further destabilization happen, we will move to a third stage of sanctions.
I would like to underline this is not necessarily what we want, but we are ready and prepared to go to such a step. My main aim would be, first and foremost, to improve stabilization and to see to it that the elections can happen there. We will work on this in the next few days, but we are also prepared to take further steps.
What we are talking about here will be sectoral measures in the context of certain branches of industry. The American President and I can only agree to this and said what is necessary as regards the dependency on gas, which is very strong in Europe, but we can also look ahead in the medium term what we can do in order to promote an energy union in the European Union, which we're doing. Looking at our dependencies in the next 10 to 15 years on Russian gas supplies, there are six countries right now in the EU that depend 100 percent on gas supplies. We need to improve the reverse flow, as we call it. We need to improve our grade of pipelines. All of the countries need to share supplies. And those are measures that we're currently discussing in Europe.
We're talking about short-term but also medium-term and long-term measures. And then the free trade agreement, T-TIP, is also gaining more prominence in this respect.