Tag Archives: Crimea

Trump’s offer to Russia: an end to sanctions for nuclear arms cut – London Times

Donald Trump speaking at news conference on Russia foreign policy

By Guy Faulconbridge and William James

LONDON (Reuters) – U.S. President-elect Donald Trump will propose offering to end sanctions imposed on Russia over its annexation of Crimea in return for a nuclear arms reduction deal with Moscow, he told The Times of London.

Criticizing previous U.S. foreign policy in an interview published on Monday, he described the U.S.-led invasion of Iraq in 2003 as possibly the gravest error in the history of the United States and akin to “throwing rocks into a beehive”.

But Trump, who will be inaugurated on Friday as the 45th U.S. president, raised the prospect of the first big nuclear arms control agreement with Moscow since the Strategic Arms Reduction Treaty signed by President Barack Obama in 2010.

“They have sanctions on Russia — let’s see if we can make some good deals with Russia,” the Republican president-elect was quoted as saying by The Times.

“For one thing, I think nuclear weapons should be way down and reduced very substantially, that’s part of it. But Russia’s hurting very badly right now because of sanctions, but I think something can happen that a lot of people are gonna benefit.”

The United States and Russia are by far the world’s biggest nuclear powers. The United States has 1,367 nuclear warheads on deployed strategic missiles and bombers, and Russia has 1,796 such deployed warheads, according to the latest published assessment by the U.S. State Department.

Under the 2010 New START treaty, Russia and the United States agreed to limit the number of long-range, strategic nuclear weapons they can deploy.

Trump has said he will seek to improve relations with Moscow despite criticism that he is too eager to make an ally of Russian President Vladimir Putin.

The United States and other Western powers imposed sanctions on Russia in 2014 over its annexation of the Crimea peninsula from Ukraine and its support for pro-Russia separatists in eastern Ukraine.

Asked whether he would trust German Chancellor Angela Merkel or Putin more, Trump said: “Well, I start off trusting both –but let’s see how long that lasts. It may not last long at all.”

His relations with Moscow have faced renewed scrutiny after an unsubstantiated report that Russia had collected compromising information about Trump.

The information was summarized in a U.S. intelligence report which was presented to Trump and Obama this month.

The report concluded Russia tried to sway the outcome of the Nov. 8 election in Trump’s favor by hacking and other means. It did not make an assessment on whether Russia’s attempts affected the election’s outcome.

Trump accused U.S. intelligence agencies of leaking the information from the unverified dossier, which he called “fake news” and phony stuff.” Intelligence leaders denied the charge and Moscow has dismissed the accusations against it.

RUSSIAN RELATIONS

In the interview with The Times, Trump was also critical of Russia’s intervention in Syria’s civil war which, along with the help of Iran, has tilted the conflict in President Bashar al-Assad’s favor.

“I think it’s a very rough thing,” Trump said of Russian intervention in Syria. “Aleppo has been such a terrible humanitarian situation.”

The war has killed more than 300,000 people, created the world’s worst refugee crisis and aided the rise of the Islamic State militant group.

On NATO, Trump repeated his view that the military alliance was obsolete but said it was still very important for him.

“I took such heat, when I said NATO was obsolete,” Trump told The Times, referring to comments he made during his presidential election campaign. “It’s obsolete because it wasn’t taking care of terror. I took a lot of heat for two days. And then they started saying Trump is right.”

Trump said many NATO member states were not paying their fair share for U.S. protection.

“A lot of these countries aren’t paying what they’re supposed to be paying, which I think is very unfair to the United States,” Trump said. “With that being said, NATO is very important to me. There’s five countries that are paying what they’re supposed to. Five. It’s not much.”

Trump said he would appoint his son-in-law, Jared Kushner, to try to broker a Middle East peace deal, urged Britain to veto any new U.N. Security Council resolution critical of Israel and criticized Obama’s handling of the deal between Iran and six world powers including the United States which curbed Tehran’s nuclear program.

On Britain’s vote to leave the European Union, Trump said: “Brexit is going to end up being a great thing” and said he was eager to get a trade deal done with the United Kingdom.

(Editing by Peter Cooney and Timothy Heritage)

Ukraine rebuilds navy, with U.S. help, to counter Russian build-up in Crimea

Vice Admiral Ihor Voronchenko, commander of the Ukrainian Navy, speaks during an interview with Reuters in Kiev, Ukraine,

By Margaryta Chornokondratenko

KIEV (Reuters) – Ukraine is refitting and expanding its naval fleet, including repairing its flagship, the frigate “Hetman Sahaydachnyy”, to counter a Russian military build-up in the annexed territory of Crimea, the commander of the Ukrainian navy says.

The upgrade will be helped by $30 million worth of U.S. aid, part of a $500 million package from Washington for the Ukrainian military which Kiev expects to receive next year.

“Step by step we will rebuild our fleet from the beginning,” Vice Admiral Ihor Voronchenko told Reuters in an interview.

“Our capacities in terms of quality will be better that the ones which remained in Crimea.”

Ukraine lost two-thirds of its fleet, which had been mostly based in Sevastopol, when Russia seized Crimea from Kiev in 2014. Since then it has fought Russian-backed separatists in the Donbass region in a war that has killed nearly 10,000 people.

Before the Russian annexation, Moscow leased facilities from the Ukrainian state to house its Black Sea Fleet, which has been based in Crimea for more than two centuries. Those facilities, mainly around Sevastopol, are now being expanded.

Russia has started a program to militarize Crimea, including resurrecting Soviet-built facilities, building new bases and stationing soldiers there, according to a Reuters Special Report.

When Russia seized Crimea, Ukraine stopped the “Hetman Sahaydachnyy”, the landing ship “Yuriy Olifirenko”, the missile boat “Pryluky” and some gunboats from falling into Russian hands.

“We just started repairing works at our flagship,” Voronchenko said.

Two new gunboats are almost ready for service “and I am sure we will receive four more boats in July next year,” he said.

The navy also plans to have a new Corvette warship and a new missile boat by 2020.

Other measures by Ukraine to beef up its defense include raising the level of training for navy personnel and creating new units of coastal defense troops. Part of the training is being carried out in NATO member countries Italy, France and Britain.

Voronchenko said Russia was planning to turn Crimea into a “military base”, installing three submarine boats, new frigates and more airborne facilities. He also said that Russian ships were experiencing technical problems.

“We have information, we conduct surveillance. I cannot tell you everything,” he said. “But we can counter-attack all their hostile intentions. They also have problems in resources.”

Sergei Zgurets, Director for the Defense Express consultancy, said Ukraine’s naval capacity was low and its air force and artillery were still therefore the main defense against an attack from the sea.

“So we will fight against the enemy’s navy forces using land and air forces,” Zgurets said.

Voronchenko will meet the navy chief of Romania, a European Union and NATO member, on Nov 23 to discuss possible joint actions in the Black Sea in case of Russian aggression.

Relations between Ukraine and Russia deteriorated after Kremlin-backed President Viktor Yanukovich was ousted by street protests in February 2014, which lit the fuse for the annexation of Crimea and the outbreak of separatist fighting elsewhere.

(Writing by Matthias Williams; Editing by Angus MacSwan)

Russia’s Putin suspends plutonium cleanup accord with U.S. because of ‘unfriendly’ acts

Putin at award ceremony

By Dmitry Solovyov

MOSCOW (Reuters) – Russian President Vladimir Putin on Monday suspended an agreement with the United States for disposal of weapons-grade plutonium because of “unfriendly” acts by Washington, the Kremlin said.

A Kremlin spokesman said Putin had signed a decree suspending the 2010 agreement under which each side committed to destroy tonnes of weapons-grade material because Washington had not been implementing it and because of current tensions in relations.

The two former Cold War adversaries are at loggerheads over a raft of issues including Ukraine, where Russia annexed Crimea in 2014 and supports pro-Moscow separatists, and the conflict in Syria.

The deal, signed in 2000 but which did not come into force until 2010, was being suspended due to “the emergence of a threat to strategic stability and as a result of unfriendly actions by the United States of America towards the Russian Federation”, the preamble to the decree said.

It also said that Washington had failed “to ensure the implementation of its obligations to utilize surplus weapons-grade plutonium”.

The 2010 agreement, signed by Russian Foreign Minister Sergei Lavrov and then-U.S. Secretary of State Hillary Clinton, called on each side to dispose of 34 tonnes of plutonium by burning in nuclear reactors.

Clinton said at the time that that was enough material to make almost 17,000 nuclear weapons. Both sides then viewed the deal as a sign of increased cooperation between the two former adversaries toward a joint goal of nuclear non-proliferation.

“For quite a long time, Russia had been implementing it (the agreement) unilaterally,” Kremlin spokesman Dmitry Peskov told a conference call with journalists on Monday.

“Now, taking into account this tension (in relations) in general … the Russian side considers it impossible for the current state of things to last any longer.”

Ties between Moscow and Washington plunged to freezing point over Crimea and Russian support for separatists in eastern Ukraine after protests in Kiev toppled pro-Russian President Viktor Yanukovich.

Washington led a campaign to impose Western economic sanctions on Russia for its role in the Ukraine crisis.

Relations soured further last year when Russia deployed its warplanes to an air base in Syria to provide support for Syrian President Bashar al-Assad’s troops fighting rebels.

The rift has widened in recent weeks, with Moscow accusing Washington of not delivering on its promise to separate units of moderate Syrian opposition from “terrorists”.

Huge cost overruns have also long been another threat to the project originally estimated at a total of $5.7 billion.

(Reporting by Dmitry Solovyov; Editing by Richard Balmforth)

Russia deploys advanced S-400 air missile system to Crimea

Russian President Vladimir Putin attends a news conference with Turkish President Tayyip Erdogan (not seen) following their meeting in St. Petersburg, Russia,

MOSCOW (Reuters) – Russia has deployed its advanced S-400 air defense missile system to annexed Crimea, Russian news agencies reported on Friday, citing a statement from the Russian Defence Ministry.

The announcement comes two days after President Vladimir Putin promised to take counter-measures after what he said were clashes between Russian forces and Ukrainian saboteurs in northern Crimea.

Ukraine denies the clashes took place. Russia annexed Crimea from Ukraine in 2014.

(Reporting by Polina Devitt; Writing by Maria Tsvetkova; Editing by Andrew Osborn)

Obama urges NATO to stand firm against Russia despite Brexit

European Council President Donald Tusk (L-R), U.S. President Barack Obama and European Commission President Jean-Claude Juncker deliver remarks to reporters after their meeting at the NATO Summit in Warsaw, Poland July 8, 2016. REUTERS/Jonathan Ernst

By Yeganeh Torbati and Wiktor Szary

WARSAW (Reuters) – U.S. President Barack Obama urged NATO leaders on Friday to stand firm against a resurgent Russia over its seizure of Crimea from Ukraine, saying Britain’s vote to leave the European Union should not weaken the Western defense alliance.

In an article published in the Financial Times newspaper as he arrived for his last summit of the North Atlantic Treaty Organisation before he leaves office in January, Obama said America’s “special relationship” with Britain would survive the referendum decision he had warned against.

“The special relationship between the U.S. and the UK will endure. I have no doubt that the UK will remain one of NATO’s most capable members,” he said, but noted that the vote raised significant questions about the future of EU integration.

The 28-nation EU will formally agree to deploy four battalions totaling 3,000 to 4,000 troops in the Baltic states and Poland on a rotating basis to reassure eastern members of its readiness to defend them against any Russian aggression.

Host nation Poland set the tone of mistrust of Russia. Its foreign minister, Witold Waszczykowski, told a pre-summit forum: “We have to reject any type of wishful thinking with regard to a pragmatic cooperation with Russia as long as it keeps on invading its neighbors.”

Obama was more diplomatic, urging dialogue with Russia, but he too urged allies to keep sanctions on Moscow until it fully complies with a ceasefire agreement in Ukraine, and to help Kiev defend its sovereignty. Ukraine is not itself a member of NATO.

“In Warsaw, we must reaffirm our determination — our duty under Article 5 of the North Atlantic Treaty — to defend every NATO ally,” Obama said.

“We need to bolster the defense of our allies in central and eastern Europe, strengthen deterrence and boost our resilience against new threats, including cyber attacks.”

Estonia, Latvia, Lithuania and Poland – all NATO members – have requested a permanent NATO presence. They fear Moscow will seek to destabilize their pro-Western governments through cyber attacks, stirring up Russian speakers, hostile broadcasting and even territorial incursions. Critics say the NATO plan is a minimal trip wire that might not deter Russian action.

The head of NATO’s military committee, Czech General Petr Pavel, said Russia was attempting to restore its status as a world power, an effort that includes using its military.

“We must accept that Russia can be a competitor, adversary, peer or partner and probably all four at the same time,” he said.

The Kremlin said it was absurd for NATO to talk of any threat coming from Russia and it hoped “common sense” would prevail at the Warsaw summit. Moscow was and remains open to dialogue with NATO and is ready to cooperate with it, Kremlin spokesman Dmitry Peskov said in a conference call with journalists.

Russia often depicts NATO as an aggressor, whose member states are moving troops and military hardware further into former Soviet territory, which it regards as its sphere of influence.

Russian President Vladimir Putin made several gestures aimed at showing a cooperative face before the summit. At the same time, Moscow highlighted its intention to deploy nuclear-capable missiles in Kaliningrad, a Russian enclave between Poland and Lithuania.

Putin agreed to a meeting of the NATO-Russia Council next week, the second meeting this year of a consultation body that was put on ice after Moscow’s seizure of Crimea in 2014. Russia allowed a U.N. resolution authorizing the EU to intercept arms shipments to Libya in the Mediterranean, and Putin talked by telephone with Obama in the run-up to the NATO meeting.

However, a White House spokesman said they reached no agreement on cooperation in fighting Islamic State militants in Syria during that call on Wednesday.

BRITAIN

Outgoing British Prime Minister David Cameron, who said he will resign after losing the referendum on EU membership last month, will seek to emphasize an active commitment to Western security at his final NATO summit, to offset any concern about Europe’s biggest military spender leaving the EU.

The first item on the summit agenda was the signing of an agreement between the EU and NATO on deeper military and security cooperation.

The U.S.-led alliance is also expected to announce its support for the EU’s Mediterranean interdiction operation. NATO already supports EU efforts to stem a flood of refugees and migrants from Turkey into Greece, in conjunction with an EU-Turkey deal to curb migration in return for benefits for Ankara.

Obama and the other NATO leaders will have a more unscripted discussion of how to deal with Russia over dinner in the same room of the Polish Presidential Palace where the Warsaw Pact was signed in 1955, creating the Soviet-dominated military alliance that was NATO’s adversary during the Cold War.

NATO Secretary-General Jens Stoltenberg sought to balance the new military deployments and air patrols close to Russia’s borders by stressing the alliance would continue to seek “meaningful and constructive dialogue” with Moscow.

“We don’t want a new Cold War,” he told reporters. “The Cold War is history and it should remain history.”

Turkish President Tayyip Erdogan told reporters before leaving Ankara to attend the summit that NATO also needed to adapt to do more to fight a threat from Islamic State militants, who were accused of last week’s deadly attack on Istanbul airport.

“As we have seen from the terrorist attacks first in Istanbul and then in Iraq and Saudi Arabia, international security is becoming more fragile,” Erdogan said.

“The concept of a security threat is undergoing a serious change. In this process, NATO needs to be more active and has to update itself against the new security threats,” he said.

(Additional reporting by Gabriela Baczynska and Robin Emmott in Warsaw, Humeyra Pamuk in Istanbul and Elizabeth Piper in Lodon; Writing by Paul Taylor; Editing by Toby Chopra, Larry King)

Baltics fear NATO plans too small to deter Russia

Lithuanian army officer Rocevicius looks at construction site of the newly built training premises for urban warfare in Pabrade

By Robin Emmott and Andrius Sytas

VILNIUS (Reuters) – Leaders in the Baltic countries and Poland fear the force NATO plans to deploy on their territory is too small and symbolic to deter an attack by Russia, whose 2014 annexation of Crimea is fresh in the memories of the former Soviet-bloc states.

They will this week press other ministers of the western military alliance to help them build an air defense system against Russian aircraft and missiles. But that would be a highly sensitive step, likely to be condemned by Moscow as yet more evidence of a NATO strategy threatening its borders.

Asked about the likelihood of Russian aggression in the Baltics, Lithuania’s Defense Minister Juozas Olekas told Reuters: “We cannot exclude it … They might exercise on the borders and then switch to invasion in hours.”

Lithuania, Latvia and Estonia see themselves on the front line in any potential conflict with Moscow and say they are putting their armies on a war footing, meaning they can be mobilized almost immediately.

NATO defense ministers are set to agree this week on a new multinational force of 4,000 troops for the Baltics and Poland.

The United States, Germany and Britain are set to lead battalions of about 1,000 troops each. Canada may lead a fourth.

While the Baltic nations welcome the deployments, they say the build-up must go further – pointing to Russia’s efforts to develop an “anti-access” capability in the Kaliningrad exclave bordering Lithuania and Poland, using missiles and submarines to stop NATO moving reinforcements into the Baltics.

The Baltics want NATO fighters to protect their skies and are seeking medium-range missile interceptors from Norway’s Kongsberg Gruppen <KOG.OL> and U.S. defense contractor Raytheon <RTN.N>.

“We need to stop possible air aggression,” said Olekas. “We are discussing creating a regional medium-range air defense system together with the Latvians, the Estonians and the Poles.”

Olekas expects to raise the matter with NATO colleagues at the ministers’ meeting on Tuesday and Wednesday in Brussels.

CREDIBILITY

The head of the Estonian defense force Lieutenant General Riho Terras said: “The first and foremost is the defense of our airspace. Air defense is the challenge that needs to solved together with the NATO alliance.”

“We are not talking about defense of Lithuania, we are talking about the credibility of the whole alliance,” said Lithuania’s Foreign Minister Linas Linkevicius.

But such calls would require stretched NATO governments to beef up the so-called air policing mission that regularly intercepts Russian jets flying over international waters close to the Baltic states.

The Baltic nations rely on their NATO allies’ quick reaction aircraft to patrol their skies, with no mandate to confront hostile aircraft in a conflict.

Four British Eurofighter Typhoon fighter jets and four Portuguese F-16 fighter jets are currently carrying out the air policing mission. Officials say a lot more would be needed for air defense.

And southern NATO nations, focused on uncontrolled migrant flows and the failing states on Europe’s borders, may also be unwilling to grant more resources to the eastern flank.

Ben Hodges, the commander of the U.S. army in Europe, visited Vilnius last week. He echoed Baltic concerns about the strength of NATO’s deterrence.

“It is a transition,” Hodges said. “I hope that includes serious war fighting capabilities. Just putting garrisons of troops sitting in the countries … will not deter.”

Russia insists it poses no threat to the former Soviet states. Top NATO officials say talk of an impending attack is misleading, a view shared by Paris and Berlin.

Russia has held unannounced exercises on the borders of the Baltics, including one in 2014 which mustered 100,000 troops, according to Danish Colonel Jakob Sogard Larsen, who heads the new NATO command outpost in Lithuania.

“You see it differently when you live here,” Larsen said.

“We need to learn to fight total war again,” he said, in a sign of the return of a Cold War-style mood.

Lithuanian officials accuse Russia of trying to buy off Lithuanian soldiers and business people to become spies for the Kremlin, intimidating diplomats and spreading disinformation on the Internet and television.

Prosecutors are preparing to file criminal charges against someone they say is a high-ranking Russian intelligence officer arrested last year trying to recruit informants.

Russia denies any such activities.

SWITCH TO “CLASSIC WARFARE”

The NATO battalions are part of a deterrent to be approved by leaders at a summit in Warsaw in July. That will involve forces on rotation, warehoused equipment and a “spearhead” force backed by NATO’s 40,000-strong rapid reaction force.

Once the decision is made, Germany could deploy to Lithuania before September. Britain is expected to deploy to Estonia, the United States to Latvia and Canada possibly to Poland.

German and Danish soldiers fanned out across swamps and woodland in Lithuania this week in war games to learn the unfamiliar Baltic terrain and test their ability to move equipment and personnel quickly to a possible front.

Their tanks and armored vehicles were recently brought back from Afghanistan, desert-yellow camouflage painted over with the green-and-black colors of Baltic woodlands.

“We are changing our focus from counter-insurgency tactics back to classic warfare,” said German Lieutenant Colonel Marc-Ulrich Cropp from his camouflaged command tent at a Lithuanian military base. “Everyone has to be prepared.”

(Additional reporting by David Mardiste in Tallin and Sabine Siebold in Berlin; editing by Andrew Roche)

Ukraine bans Gorbachev over support for Crimea annexation

Former Soviet president Mikhail Gorbachev looks on during a presentation of his new book "After Kremlin" in Moscow

KIEV (Reuters) – Ukraine has banned former Soviet leader Mikhail Gorbachev from entry for the next five years over his support for Russia’s seizure of Crimea, a spokeswoman for Ukraine’s State Security Service (SBU) said on Thursday.

A spokesman for Gorbachev pointed to his response to Russian state media earlier this week when asked about a possible Ukraine travel ban. “Fine, I don’t go there and I will not go there,” he said.

The Crimea does not have uniformly happy associations for Gorbachev whose Perestroika reforms ended the Cold War but ultimately brought the end of the Soviet Union in December 1991.

It was at a holiday home at Foros, on its Black Sea coast, that he was held prisoner for three days in 1991 in a failed coup by communist hardliners.

Gorbachev, 85, has repeatedly commended the 2014 annexation of the peninsula, which houses a large Russian naval base. On Sunday, he told Britain’s Sunday Times he would have acted the same way as President Vladimir Putin in a similar situation.

However, the 1990 Nobel Peace Prize winner has warned of potentially dire consequences if tensions are not reduced over the Ukraine crisis. He has also been critical of Putin on domestic issues.

The annexation followed the toppling of a pro-Russian president in Kiev. Within weeks, a pro-Russian insurrection broke out the east of Ukraine that has so far cost over 9,000 lives and soured relations between Moscow and the West.

“We have indeed banned him from entering for five years in the interests of state security, including for his public support of the military annexation of Crimea,” SBU spokeswoman, Olena Gitlyanska, said in post on Facebook.

Last September, the SBU banned former Italian prime minister Silvio Berlusconi from entering Ukraine after he became the most prominent Western politician to visit Crimea, where he met Putin, an old friend and political ally.

(Reporting by Alessandra Prentice; Additional reporting by Lidia Kelly; editing by Matthias Williams and Ralph Boulton)

Two years after annexation, Putin seeks to bind Crimea by bridge to Russia

Tuzla Island, CRIMEA (Reuters) – President Vladimir Putin, marking the anniversary of Russia’s annexation of Crimea, on Friday exhorted workers building a bridge between the Black Sea peninsula and Russia to fulfill an “historic mission” first conceived by a Russian tsar.

Russia seized the majority Russian-speaking Crimea from Ukraine on March 16, 2014 after an uprising toppled Ukraine’s pro-Russian president, but the peninsula has since struggled with economic isolation.

The annexation unleashed a wave of patriotic euphoria in Russia and Crimea, but Putin needs to ensure public attitudes do not sour over the economic costs and avoid handing vindication to Western governments, who condemned the move as an illegal land grab.

Russia was hit with international sanctions over the annexation and Crimea remains largely cut off overland from Ukraine, depending on ships to keep it resupplied from Russia.

As cities around Russia prepared to celebrate the second anniversary of what Moscow calls the reunification of Crimea, which was part of Russia until 1954, Putin visited the construction site where the bridge is taking shape.

He said the bridge, which will span 12 miles across the Kerch Strait from Crimea to southern Russia, would integrate the peninsula with Russia and help stimulate the economy.

“Our and your predecessors understood the importance of this bridge,” he told workers at an inspection of the site on an island just off Crimea’s coast, referring to aborted plans dating back to Tsarist Russia.

“Let us hope that we will fulfil this historic mission. Undoubtedly, it will create additional opportunities for economic growth.”

The bridge is being built by a company owned by Arkady Rotenberg, Putin’s judo partner, who was among the first in the president’s entourage to be slapped with Western sanctions after Crimea’s annexation.

PRO-RUSSIAN POPULATION

Russian officials say Crimea’s 2 million people voiced their desire to join Russia in a democratic vote in 2014, so there was no violation of international law. Given Crimea’s history within Russia, many residents feel closer to Moscow than to Kiev.

Crimea once prospered as a Black Sea tourist hub. Now its businesses are starved of tourists and international investment is barred by Western sanctions. A dependence on Ukraine for power supplies has also left them vulnerable to pro-Ukrainian activists who sabotaged electricity cables last year, subjecting the peninsula to weeks of rolling blackouts.

Putin’s approval rating among Russians is at its highest in four years and 95 percent of Russians support Crimea’s annexation, according to state-run pollster VTsIOM.

But these numbers could fall as patriotic fervor in Crimea peters out and Russia’s economic crisis deepens, eating into real wages and eroding living standards.

Building the bridge, at a cost of 212 billion rubles ($3.13 billion), and supporting Crimea will impose additional burdens on Russia’s shrinking state budget, which has been hammered by a collapse in global oil prices – the country’s main export.

Crimea will get 43.5 billion rubles in federal government transfers in 2016 and Moscow will provide an added 148 billion rubles as part of a state development plan for the peninsula, part of which will be used to finance the bridge.

The combined total is only a fraction of the 16 trillion rubles originally earmarked for the 2016 Russian state budget. But the costs of annexation will be much higher as sanctions – which the International Monetary Fund has said could cut Russian GDP by 9 percent – continue to exact their toll.

TSARIST-ERA BEGINNINGS

An idea first hatched under Russian Tsar Nicholas the Second in 1910, the bridge will now consist of two parallel road and rail spans capable of carrying 40,000 vehicles every 24 hours and connected by road to the Crimean capital of Simferopol.

Russian Transport Minister Maxim Sokolov said the bridge would be completed in December 2018 as scheduled, but critics have said the plans are too ambitious and will run over budget.

A number of other large-scale infrastructure projects in Russia, such as preparations for the 2018 World Cup and plans to build a new cosmodrome in Russia’s Far East, have been plagued by delays and had their funding cut to compensate for dwindling budget revenues.

Anti-corruption campaigners have also criticized the Russian government’s decision to award the construction contract to Rotenberg’s Stroygazmontazh, a company which specializes in gas pipelines and has never built a bridge.

“The annexation of Crimea was an obvious mistake, which the Kremlin and the majority of Russian people will not recognize for a long time. But we continue to pay for it,” Russian business daily Vedomosti wrote in an editorial on Friday.

European Union foreign policy chief Federica Mogherini reiterated on Friday Crimea’s annexation was illegal and the peninsula should be returned to Ukraine.

($1 = 67.6800 rubles)

(Writing by Jack Stubbs; Additional reporting by Lidia Kelly and Jason Bush; Editing by Christian Lowe and Mark Heinrich)

NATO agrees to deter Russia from attacks, but avoids Cold War footing

BRUSSELS (Reuters) – NATO agreed on Wednesday its boldest steps yet to deter Russia from any attack in the Baltics or eastern Europe, setting out ways to rapidly deploy air, naval and ground forces without resorting to Cold War-era military bases.

In an effort to dissuade Moscow after its 2014 annexation of Crimea, NATO defense ministers will rely on a network of new alliance outposts, forces on rotation, warehoused equipment and regular war games, all backed by a rapid-reaction force.

“Russia is a threat,” Lithuanian Defense Minister Juozas Olekas told Reuters at an alliance meeting in Brussels. “It is Moscow’s actions in Crimea, their support for separatists in Ukraine and their snap exercises that concern us”.

The measures, which British Defense Minister Michael Fallon said proved that “NATO means what it says”, showed a unity the West has not been able to muster against Russia in Syria, where the United States faces criticism for not stopping the Russian-backed assaults on rebel-held areas of Aleppo.

NATO Secretary-General Jens Stoltenberg said he will meet Russian Foreign Minister Sergei Lavrov at the Munich Security Conference later this week to stress the defensive nature of NATO’s strategy for the Baltics and eastern Europe.

“We believe that especially when times are difficult, as they are now, it’s even more important that we have political dialogue, channels open, between NATO and Russia,” he said.

Russia denies it has acted aggressively. Moscow blames the West for stirring anti-Russian feeling across the east, particularly in Georgia, Moldova and Ukraine, which it considers its historic sphere of influence.

The crisis in Ukraine, where the West accuses Russia of fomenting a separatist rebellion, and the Western economic sanctions on Moscow have raised concerns about a new Cold War.

Non-NATO member Georgia, which fought a five-day war with Russia in 2008 that left two of its regions occupied by Russian military, also warned NATO to be on alert. “With the Kremlin, nothing can be excluded,” Tinatin Khidasheli, Georgia’s defense minister, told Reuters. “They cannot show weakness.”

Poland’s new conservative government has been the most vocal in calling for permanent NATO bases on its territory and while Warsaw has now agreed to the new lighter military presence, its defense minister Antoni Macierewicz signaled that difficult talks over troop numbers lie ahead.

WANTED: MONEY, TROOPS

Initial discussions suggest NATO could have a brigade of up to 1,000 troops in each of the six former communist countries, once under Moscow’s domination, that the alliance is looking to reinforce: Lithuanian, Latvia, Estonia, Poland, Bulgaria and Romania. They will be backed by a rapid-reaction force that includes air, naval and special operations units of up to 40,000 personnel.

Asked about whether a 1,000-troop presence was acceptable, Macierewicz said: “From our point of view it is clearly too little.”

U.S. Defense Secretary Ash Carter said the plan aimed to move NATO to a “full deterrence posture” to thwart any aggression but cautioned: “It’s not going to look like it did back in Cold War days.”

In the past, the United States stationed some 300,000 troops in Europe and NATO wants to avoid any such posture because of the costs and also so as not to further antagonize the Kremlin.

Britain said it would contribute two warships to a NATO maritime groups this year, sending one frigate to the Baltic.

Another difficult issue is the funding for the deterrent, which Stoltenberg has said “does not come for free.”

The United States’ is seeking a $3.4 billion budget for European reassurance initiatives in 2017, a four-fold increase in Washington’s spending in the region to rotate more troops through the region and provide more tanks and other support.

Carter, speaking to reporters traveling with him to Brussels, said it was important for all NATO allies to increase military spending. “I’ll be looking for others in NATO to echo (us) in our investment,” Carter said.

Stoltenberg said he received new commitments from other NATO allies on Wednesday, but said it was too early to give details.

(Writing by Robin Emmott, editing by Larry King and Dominic Evans)

Russia Planning to Sue Ukraine Over $3 Billion Bond Default

The Russian government is gearing up for a potential court battle with Ukraine after Kiev failed to repay a $3 billion bond debt, according to official statements from Russia’s prime minister.

Speaking at a meeting with his deputy prime ministers on Monday, Dmitry Medvedev said that Ukraine failed to repay the debt by a Dec. 20 deadline. While Ukraine can still repay the debt without any penalties in the next 10 days, there’s been no indication the nation plans do so.

Medvedev told his cabinet that the Russian government “must hire lawyers and start the procedure to make Ukraine pay everything, including fines,” adding that Ukraine’s failure to pay “amounts to manipulation and violation of its international commitments.”

Relations between Russia and Ukraine have been deteriorating in recent months, fueled in large part by Russia annexing the Ukrainian territory of Crimea in February 2014 amid the Ukrainian revolution. The European Union issued a host of sanctions against Russia in the wake of the Crimean crisis, and announced Monday those sanctions would be extended through July 2016.

While it’s not a member of the European Union, the Ukraine has signed an economic agreement with the group. Speaking to his cabinet, Medvedev said that Ukraine implementing that pact “impinges on our interests and creates risk to our economic security.” Medvedev said he had signed a decree to enact “reciprocal economic measures” against the Ukraine beginning January 1, when the Ukraine’s revised economic agreement with the European Union goes into effect.

Bloomberg reported that Ukraine’s former president, Viktor Yanukovych, sold the debt to Russia in December 2013, weeks before Yanukovych was ousted. Ukraine’s new leader, Petro Poroshenko, has called that payment a bribe Russian President Vladimir Putin used to reward Yanukovych for shying away from closer trade ties with the European Union, which helped ignite the revolution.

The conflict has wreaked havoc on Ukraine’s bank accounts, and the International Monetary Fund (IMF) loaned the country $17 billion in April 2014 to help the nation reform its economy.

Bloomberg reported the Ukraine had to restructure billions of dollars in debt to obtain the IMF money, but Russia refused to participate and countered with its own proposed payment plan.

Ukraine’s finance minister, Natalie Jaresko, told Bloomberg that the decision to halt bond payments to Russia was made to remain compliant with IMF requirements, and that paying Russia “would have breached the contractual obligations that we have to our other creditors.”

Jaresko told Bloomberg she remained hopeful that an out-of-court settlement could be reached.