Remarks At the American Enterprise Institute by Victoria Nuland

LEON ARON: All right. Good morning and welcome to all. I would like to start. We have a fascinating conversation here. Thanks for coming. And thanks very much, Ambassador Nuland, for finding the time to chat with us.

You’ve had a most distinguished career, and continue to have it. And the trajectory is well known to people in this room, I think to most of them. But let me just mention a few things.

You’re Assistant Secretary of State for European and Eurasian Affairs, meaning you’re responsible for 50 countries, as well as NATO, as well as the European Union, and the Organization for Security and Cooperation in Europe. You have served as the State Department’s spokesperson. You were ambassador to NATO. You were deputy national security adviser to the vice president. And, from 1993 to 1996, you were chief of staff to Deputy Secretary Strobe Talbott.

 this is a personal note – and it was in Strobe’s office, in late January of 1995 that I first met you. And, if I may, I would like to go back to that time. I remember that both and you and Strobe were quite pleased, even happy, if this is the right emotion for professional diplomats, and the reason for that was that the so-called Budapest Memorandum on Security Assurances to Ukraine was signed by the United States, the U.K., Russia, and Ukraine, just two months before, in December of ’94.And

In exchange for Ukraine’s accession to the treaty on the Non-Proliferation of Nuclear Weapons and the pledge to transfer the Soviet era nuclear weapons to Russia, the signatories, I quote, “Reaffirm their commitment to Ukraine’s independence and sovereignty and existing borders; refrain from the threat of use of force against territorial integrity or political independence of Ukraine and from economic coercion to subordinate to their interest the exercise by Ukraine of the rights inherent in its sovereignty.” That’s a pretty comprehensive list. Congratulations.

But things have changed. And where do you think the change has come from, and why?

ASSISTANT SECRETARY NULAND: Well, first of all, Leon, it’s great to be here with you. It’s great to be back at AEI with so many friends. Thank you for coming out.

And it is truly interesting to think back that it was 20 years ago that we met, and at that point, we had so much hope about being able to mix reforming, democratizing Russia into the fabric of the international system, that we could lift all boats, including the lives of 150 million Russian people.

It is true that one of the first major pieces of negotiation that I ever worked on in my career was the denuclearization of Kazakhstan, Belarus, and Ukraine. I continue to think that that was the right decision for those countries to make, to move in the direction of modern European states that secure themselves through their prosperity, through their partnership with other strong democracies rather than needing nuclear weapons.

That said, part of that deal, as you have underscored, was the commitment of all the Budapest powers, notably including the Russian Federation, to keep their hands off the territory of Ukraine. And, obviously, that has not happened.

  1. ARON: You spoke to the Helsinki Commission of the U.S. Congress last April, and you said, “Today, Ukraine is a frontline state in the struggle for freedom and all the principles that this commission holds dear.”

And, a month later, in his brilliant article in the New Republic titled “The Battle in Ukraine Means Everything,” Tim Snyder of Yale wrote, “Ukraine has no history without Europe but Europe also has no history without Ukraine. Throughout the centuries, the history of Ukraine revealed the turning points in the history of Europe. This seems to be true today.”

Now, it looks like both you and Tim Snyder are talking about the same thing. And the stakes are pretty high, aren’t they?

ASSISTANT SECRETARY NULAND: They certainly are. As you know, the United States, in a bipartisan fashion, for 25 years has worked for a Europe whole, free, and at peace. Today, the number one battleground for that aspiration is in Ukraine. And the way Ukraine goes will impact not only the neighborhood and the space between Ukraine and the European Union and NATO space but I think will also have an impact on the kind of future that the people of Russia can have.

So it is profoundly in the United States’ interest that Ukraine succeed in its aspiration to be democratic, to be more prosperous, to be unified, to be more European, to integrate with our economies, and to beat the cancer of corruption that has plagued it for so long.

And that is why we are putting so much effort into it. It is why we are working so intensively with our European partners and allies, particularly with the EU on increased economic support for Ukraine now, and it’s why we welcome the decision of the Congress in a bipartisan fashion to signal its support as well.

  1. ARON: Okay. I’ll return to corruption and Congress. You were in Ukraine I think the first week of October. What did you see?

ASSISTANT SECRETARY NULAND: You mean this past trip with the vice president?

  1. ARON: Yes. Right.

ASSISTANT SECRETARY NULAND: I think I’ve been in Ukraine eight, nine times in the last calendar year in various ways, both with bosses and on my own.

This last trip was –followed the — it was in November, with Vice President Biden. And we were there after the elections, as the Ukrainians were working to form a government. We were at that point advocating a broad coalition government with a very strong reform program.

As you saw about a week later, that government was formed with a large number of technocrats with lots of experience in the economy in particular. As you saw, the government put forward a relatively robust and very concrete reform agenda, including things like cutting the public sector by 10 percent, including broad decentralization of tax authority, including strong measures against corruption. The Rada, the Ukrainian Parliament, endorsed that, which was by a very wide margin, which speaks to strong support across Ukrainian parties to deliver on what the Ukrainian people asked for in those elections.

So now they have to implement, and, as they implement, we have to continue to support them.

  1. ARON: Let’s talk about the U.S. strategy. When you spoke to the Senate Foreign Relations Committee this past July, you outlined what to me looked like a four-part plan: support for Ukraine’s tackling urgent economic, political, and security challenges; diplomatic efforts to deescalate what you called the crisis and to encourage Russia to end support for separatists; readiness to impose further costs by way of sectorial sanctions on Russia; and reassuring frontline NATO allies and friends, like Georgia and Moldova.

It’s almost been half a year since you spoke there, and outlined that plan. Is the strategy the same? And, if it is, have there been any shifts maybe in emphasis or substance?

ASSISTANT SECRETARY NULAND: The four points that you outlined are still the way we look at the situation – support for Ukraine, protection of allies and partners, outreach diplomatically with our allies and partners to Russia, offering an off-ramp, offering de-escalation if the Kremlin is willing, primarily now focused around implementation of the peace plan, the Minsk peace plan from September that the Kremlin signed onto but has not yet implemented, and then, the final point, imposing costs for aggression. So I think you’ve seen all of those pieces since the summer continue to accelerate.

On the NATO side, you have seen us continue to, on land, sea and air, provide physical reassurance to our allies. You’ve seen the security support for Georgia and Moldova and Ukraine increase. You’ve seen now, with the congressional support for the European Readiness Initiative that will allow us to preposition equipment as necessary and further strengthen the alliance.

On the Ukraine support side, we talked about $320 million plus the $1 billion loan guarantee in U.S. support for Ukraine in 2014; very generous authorizations from the Congress in the Ukrainian Freedom Support Act, which allow us to do more in the coming period, but, of course, conditioned on Ukraine staying the reform course.

On the costs side, very tough sanctions imposed jointly by the U.S. and the EU; in September, continued discussion about what more needs to be done there, but, at the same time, making clear that those sanctions can be rolled back if the Minsk protocols are implemented, if Russia closes that border with Ukraine, pulls back equipment and fighters in eastern Ukraine, and helps release hostages. Those are the main points that we want to see, and we have made clear that sanctions will roll back if, in fact, they fulfill their obligations, but we haven’t seen it yet.

  1. ARON: You described last April Russia’s occupation of Crimea as, quote, “Rubberstamped by an illegitimate referendum conducted at the barrel of a gun.” Some of my colleagues in this town and outside have been suggesting in op-eds that, under certain conditions, the U.S. should recognize Crimea’s annexation. Do you think the U.S. will ever recognize Crimea as part of the Russian Federation?

ASSISTANT SECRETARY NULAND: Certainly not. Under current leadership, I don’t see how that is possible. It was a complete violation of international law. And once you go down that path, what’s to stop countries all over the world from biting off chunks of their neighbors at will?

  1. ARON: In the speech to the joint session of Congress on September 18, President Petro Poroshenko of Ukraine said that one can’t fight aggression with blankets.

Now, last week, the Senate unanimously passed a bill that authorizes, although not requires, the president to provide both lethal and non-lethal military assistance to Ukraine and requires to expand sanctions on Russia. It seems now that the president will sign the bill, despite some reservations. What can you tell us about all of this?

ASSISTANT SECRETARY NULAND: Well, I think the Ukraine Freedom Support Act is emblematic of the strong bipartisan, bicameral support for Ukraine and its aspirations that you see across the United States. And I know from talking to Ukrainians that that has been very important to them politically. It’s been important to them as they seek to build their reform agenda and to know that they have the support not just of the administration, but of the American people and their representatives. We’ve had a spectacular number of congressional delegations out to Ukraine, not just during the Maidan period but since, demonstrating support. And, you know, when you’re trying to do difficult new things, to have that national support is very, very important.

The bill gives us – gives the administration– authorization for a broad set of tools but it also allows considerable flexibility to use those tools in a manner that is flexible as we see how the situation develops.

  1. ARON: Very diplomatic.

ASSISTANT SECRETARY NULAND: Thank you. Thirty years.

  1. ARON: So if I could sort of probe a tiny bit – I know the answer but let me do it anyway because, you know, AEI pays my salary. So lethal assistance, defense of – obviously, we’re all talking about defensive – you know, anti-tank, anti-aircraft. Any – are we closer to it than we were before?

ASSISTANT SECRETARY NULAND: Well, first of all, let me say I think that the American people can be proud of the security support that we’ve already given to Ukraine: $118 million in calendar 2014 alone, broad authorization, as I said, from the Congress to do more next year; beginning now to do the equipping and training of Ukrainian units, which is the most important thing, to help them to be at their best, now, being willing to give heavy armor and those kinds of things, including night vision, communications gear, the kinds of things that the United States excels in and the Ukrainians clearly need.

With regard to your question about – so we’ve been doing security support up to the high-end, non-lethal defensive range, and also considerable support for border security. I don’t have the number in my head but it’s at least 70 million [dollars] in border security, which is important not just to enable us, should the Ukrainians get access back to their border in the east but they’re doing a huge amount of work now to harden the rest of the border and make it a real border as compared to the sunflower fields that we – that we saw in the east.

With regard to the question of lethal, I think you’ve heard the White House and Tony Blinken say that we keep this under review. We’re in constant dialogue with the Ukrainians about what will make a difference to them. What’s most important is that the Russians be deterred in further adventure.

  1. ARON: Thanks. Now, of course, defending against the Russian aggression is just one of the many huge problems that Ukraine faces. And you alluded to it, and I just thought that I would just collect it all in one.

You know the misery index by heart, but let me recite it for the audience: Ukraine is almost at the bottom of the Transparency International’s corruption list. Its GDP is likely to shrink by 9 percent this year, and, optimistically, by another 3 percent next year. Its hard currency reserves, at $19 billion, are almost incredibly low for a country that size. And the hryvnia has lost half of its value this year.

Now, in the testimony to the Senate Foreign Relations Committee, you said that the most lasting antidote to separatism and outside interference in the medium term, is for Ukraine to beat back corruption. And Poroshenko seems to have agreed to that. He spoke – again, speaking to the Congress in September, he said – in fact, he listed what he called the sins of the Ukrainian elite: corruption, bureaucracy, and cynicism. So, some tough love along with assistance?

ASSISTANT SECRETARY NULAND: Absolutely. And, you know, we certainly believe, and I think the broad majority of Ukrainians believe that if Ukraine does not beat corruption this time, if it does not create a clean, transparent, democratic country, then it will once again blow its chance.

And they – you know, that is what the Maidan was about many things but it was certainly about the Ukrainian people being sick of being ripped off by their leaders, by oligarchs, by a non-transparent system. They want opportunity. They want to know where the money is going. They want a free market economy. They don’t want a small handful of kleptocrats running that country anymore.

That’s what the current leadership was elected on, whether it was President Poroshenko or whether it’s the Rada, and that’s what the government has committed to. There is a lot of good detail in the government’s program. Now they’re going to have to live up to it.

We’re starting to see good progress in places like Kyiv city, where Mayor Klitschko is become the kind of e-governance and he is trying to –

  1. ARON: And he can enforce it, too.

ASSISTANT SECRETARY NULAND: He can. He can. And he’s trying to make government procurement transparent. He’s trying to put all the contracting online so everybody can see.

The Ukrainian government program also includes a very ambitious program of decentralization of tax, local spending, et cetera, to reduce the number of layers, the opportunity for rip-offs in the system. This is what they’re going to have to do and it’s going to be very, very hard work, and they’re going to need a lot of help doing it, which is why a good chunk of our technical assistance and the EU’s assistance will be earmarked for that kind of work.

  1. ARON: Thanks. You spoke to the House Foreign Relations Committee in May, and you said that the U.S. and its allies remain committed to a diplomatic off-ramp should Russian choose to take it. Now, I’d like to talk about this off-ramp for a moment, if I may.

There seems to be a consensus emerging among independent Russian analysts that, at least to a large extent, the Crimean adventure was a classic strategy of authoritarian regimes, that is, to boost domestic legitimacy and popularity and justify repression by providing – by arranging for a confrontation on the outside and hoping for patriotic mobilization on the inside. There’s nothing new here, of course.

I think in Henry IV, Shakespeare has Henry telling Harry, the future Henry V this – he advises him to busy giddy minds with foreign quarrels lest they look too near onto my state.

Given that the government has been pretty successful in patriotic mobilization, and given that just, you know, the headlines of today and all past week or so that Russia’s not facing just a recession but possibly a crisis, on the one hand, and given the fact that — as I said, given the fact that it –has successfully swept the economic issues under the rug as far as domestic political situation is concerned, how reasonable is it to hope that Russia will in fact take that off-ramp given that the regime badly needs now a boost in legitimacy – or, this is certainly one option, to liberalize, to decentralize, to do what Alexei Kudrin has been suggesting for five years, or do the opposite, do the classic authoritarian thing, which is up the ante and instead of taking an off-ramp, start nibbling, for example, on the Baltic states in order to continue with what has been a pretty successful patriotic mobilization.

ASSISTANT SECRETARY NULAND: Well, Leon, there’s a lot in the way you phrased this so I don’t know exactly where to start.

  1. ARON: Tease it from any angle.

ASSISTANT SECRETARY NULAND: Exactly. I mean, look, there’s no question that the Russian economy was already in trouble when the Kremlin chose to bite off Crimea, and it was a very nice distraction from the fact that economy was already not going to grow at that moment.

But it doesn’t change the fact that the structure of the Russian state, the Russian economy, prosperity has changed over the 20 years that Russians have been allowed to vote for their leaders. The Russian economy is deeply knitted into the global economy, and that also creates opportunity but it creates vulnerability for authoritarian regimes.

Now, whether or not those making decisions in Russia over the last year fully understood their vulnerability to reputational things, like the fact that when you violate international law repeatedly, it has a knockoff effect on the environment for investment in your country, not to mention the constraints that already existed and were growing inside the Russian system; or whether it’s the fact that there’s – what we’ve done through sanctions on the one hand but also the chilling effect it has on willingness to invest further when there’s that kind of uncertainty.

But the largest issue here I think is the broader economic mismanagement over more than a decade where the Russian economy was not diversified away from hydrocarbons. And the Russian people I think did not appreciate how vulnerable they were to this lack of diversification.

I think because the Kremlin fully controls information now into most households, they also didn’t appreciate the costs of these adventures in Ukraine, not only the material cost of maintaining tens of thousands of Russian soldiers on the border of Ukraine or in Crimea, but also the knockoff effect of sanctions and isolation, et cetera. And now it’s coming right to Russian kitchen tables with the devaluation of the ruble, with the inflation gone wild, with the cost of borrowing, et cetera.

So the question is, will this start a conversation inside Russia about the course that they’re on, about the fact that the Kremlin has prioritized their foreign adventures over the well-being of the Russian people now, not to mention all the Russian mothers and girlfriends and sisters and parents who lost children in the adventure in the east when so many Russians were killed.

  1. ARON: How concerned are you about the Baltics?

ASSISTANT SECRETARY NULAND: Well, I think you know that we’ve put a huge amount of effort into making it absolutely clear that NATO space is inviolable. Three presidential trips to Europe this year, the investment including almost $1 billion in reinforcement that the Congress has now appropriated; the work we’ve done at NATO, including at the Wales Summit, as I said, land, sea and air, to make clear that you don’t mess with NATO allies.

We’ve also had intensive consultations with the Baltic countries, as have our NATO allies, on an integrated approach to defense. You see them strengthening border security now; you see allies from all countries participating there.

Just to say that this was not our choice but this is a clear necessity now to ensure that, first of all, those countries feel secure, feel all 28 allies are there for them but also that we made absolutely clear that this is not an adventure that anybody ought to be going on.

  1. ARON: I’m glad that you mentioned the information that gets to every Russian. Now, one of the sources – probably key source of that success in patriotic mobilization was, of course, a monopolistic propaganda.


  1. ARON: And if my recollections of my misspent Moscow youth are true, it far surpasses anything that I saw in the ’70s, in just in sheer cynicism and not to mention technology and the reach.

Now, Russian wits have been making quite a sport of it. One of them, a recent posting on the “Snob,” I think, mocked the propaganda line in this way: all the revolutions in history of humanity, beginning with Lucifer’s rebellion against God, have been designed by the United States in order to detract from the glory of Russia.

ASSISTANT SECRETARY NULAND: So we preceded Lucifer. That’s quite a – wow, wow . . . . yeah, wow.

  1. ARON: You’re part of a long tradition. And I’m coming to that. I’m coming to that. But, of course, this is (in Russian)—this is laughter through tears. A couple of weeks ago, addressing the nation in the state of Russia, President Putin said that the United States supports violence, murder and burning people alive in Ukraine.

Now, I’m bringing this up because there have been quite a private place accorded to you personally in all of this. And I brought you, and I’ll give it to you as a souvenir, this is just a few randomly selected printouts of articles. Now, I know you’re fluent in Russian, but for the audience, let me translate just the headlines that were collected here of the articles that have you.

“Nuland’s words have confirmed the U.S. control over the Ukrainian opposition.” “Nuland did not mention U.S. plans to midwife a new government in Ukraine.” “Kyiv infested with neo-Nazis is a U.S. piece of work.” “Who is behind the Bandera Nazis? Nuland arrives to Ukraine to give Poroshenko marching order prior to the elections.” “Nuland is carrying toast to Kyiv.” “Nuland is preparing a new Maidan in Kyiv.”

Now, what do you think of all of this and how it affects you? And there’s a question that I always wanted to ask you. Those cookies that you distributed to pro-democracy demonstrators in Moscow and Kyiv that ranked the Moscow propagandists especially deeply, do you have a recipe? (Laughter.) And if you do and it’s not copyrighted, we’ll be happy to post it on the AEI site.

ASSISTANT SECRETARY NULAND: First of all, to correct some dezinformatsiya, they were sandwiches. They were not cookies. Second –

  1. ARON: Wait. Wait. In which instance? Both Moscow and at Maidan or –

ASSISTANT SECRETARY NULAND: I don’t think I gave out sandwiches in Moscow. Did I?

  1. ARON: Well, you were supposed to – Okay. All right. All right. Well, the menu is changing as we speak. Okay.


  1. ARON: I think we have correspondents here from Sputnik and Novosti, so take notice, please.

ASSISTANT SECRETARY NULAND: So, first of all – first of all, this happened – I can’t remember – it was December 11th or December 12th, just to tell the story. Cathy Ashton of the European Union and I were both in Kyiv to try to help foster some dialogue at that point between Maidan leadership, the opposition leadership, and President Yanukovych. She had spent some four hours with Yanukovych and I had worked with the opposition.

  1. ARON: And Ashton, of course, is in charge of the European Union’s foreign policy.

ASSISTANT SECRETARY NULAND: Right. And we had made a decision after the OSCE meeting to try to go together and to work in tandem. So we were there one night, and then I was to see Yanukovych the next day.

And what happened was, at 1:00 a.m. in the morning, we were all awakened because Yanukovych had order the Berkut security forces onto the Maidan. There were some 2,000 young guys in these sort of Adam Ant suits pushing onto the innocent demonstrators, while Cathy Ashton and I were there.

And what happened was the Maidanchiki starting ringing the bells and started singing. And they ended up surrounding the Berkut, and the Berkut retreated at about three o’clock in the morning. You’ll recall that we issued a statement right in the middle. Secretary Kerry called it disgusting that they were putting security forces onto the Maidan.

So the next morning, the feeling was that I couldn’t go down – we were all going down to see the Maidan leaders regularly during this period, as was Ashton. But I didn’t feel, in classic Slavic tradition, that I could go empty-handed. So we brought the sandwiches, not only to those demonstrators who had had such a traumatic evening but we also gave them to the Berkut, to these poor 18, 19, 20-year-old Ukrainian kids who had been ordered by their president to move against their own mothers and grandmothers.

So it was a symbol of sympathy with the horrible situation that Yanukovych had put Ukrainians in, pitting them against each other. Obviously, that wasn’t useful to Moscow propaganda to point that out but there are pictures of me giving the sandwiches also to the Berkut, who were equal victims of the authoritarian structure which was also aided and abetted from the north.

  1. ARON: This is a very important footnote to history.


  1. ARON: Because this (in Russian), you know, these cookies are all over – all over the Russian media. So, all right, letters to the editor.

ASSISTANT SECRETARY NULAND: That said, the United States will never be shy about supporting efforts for more democracy, more popular choice, more enfranchisement anywhere in the world, as you know.

  1. ARON: Excellent. Thank you. I think – if you don’t mind, we have a few minutes for questions.


  1. ARON: Anders. Microphones are coming. If you could just – I know who you are but if you could identify yourself.

QUESTION: Thank you very much. Very interesting. And what I would particularly would like to ask you, that is, right now, it’s a discussion about the IMF says that at least 15 billion dollars is needed for Ukraine.

Sorry. I forgot to say. Anders Aslund from the Peterson Institute.

And, basically, it should be in addition to the IMF funding committed and more money than this will be needed for the next two years. The total amount is something like $50 billion. Of course you can’t say anything about how much the U.S. will give but how do you see the process going forward? First, there will be an IMF program, we presume, then there will be a donor conference. And how do you see this donor process going forward? Thank you very much.

  1. ARON: Thank you, Anders.

ASSISTANT SECRETARY NULAND: Well, thanks, Anders. And just to shout out, Anders Aslund, who has been a mentor and a champion for two, three decades for those across the Euro-Atlantic space who have wanted more open, more democratic economies. And thank you for the work that you’ve done all these years.

With regard to Ukraine’s IMF program, you will have seen that senior IMF leadership was in Ukraine this week issuing a public validation of the reform program going forward, but also confirming that the program agreed last year is going to need a significant adjustment, that there is a fiscal hole now to the tune of 10 to 15 billion dollars.

We have been working with the IMF. We have been working with the Ukrainians. We have been working with senior EU member states and with the commission on the responsibility that we will all have, if the Ukrainians stay on track, to help fill this hole.

We anticipate that the IMF will come forward with formal conclusions relatively shortly. We expect that the IMF and the World Bank will have to increase their support for Ukraine, but that the United States, Europe and other friends of Ukraine around the world will as well.

We internally have been preparing more support for Ukraine. I think we will wait and hear what the IMF requires. But we’ve also been in very active conversation with the EU asking that they also give a signal of support. You will have seen President Juncker come forward, saying that there is a need now and beginning to get EU member states ready as well.

But, again, this has to be pegged to implementation of reform. It has to be pegged to President Poroshenko, Prime Minister Yatsenyuk, the government, the Rada, and the Ukrainian people meeting their commitments to themselves, to the international community to get it right this time in terms of corruption and in terms of really liberalizing the economy and making it better integrated with Europe and better integrated with the world system.

  1. ARON: Yes. The gentleman behind Anders.

QUESTION: Thank you, Madame Secretary. And Merry Christmas. Two very quick questions.

  1. ARON: Could you identify yourself please?

QUESTION: John Gizzi, chief political correspondent for Newsmax. Two quick questions.

First, have the sanctions made any noticeable changes that you can detect in President Putin’s foreign policy dealing with Ukraine or any other country?

And, second, as you may very well know, Foreign Affairs this month rewired the whole jalopy of the promises given by the Western powers to Russia 25 years ago about not expanding NATO and the continued specter of Ukraine becoming a NATO member or Georgia they speculate are responsible for the recent actions. Would you comment on that?

  1. ARON: Thank you.

ASSISTANT SECRETARY NULAND: Well, first of all, there were no promises made to Russia that it would have a veto at any point, by any American or European leader that I am aware of over other countries’ sovereign choice of alliance. That’s just not the way we do business. So, and anybody who tells you otherwise doesn’t know the true situation.

With regard to the effect of sanctions, you know, I think the market information that we’re seeing from Russia today is a clear indication that the isolation that the Kremlin has wrought, the pressure that the U.S. and Europe and others have brought to bear on the Russian economy is having an effect.

I personally believe that there might have been even more aggressive action in Ukraine had we not had a steadily escalating set of measures together, the U.S. and Europe, had had the U.S. and Europe not been completely unified, along with Australia, Japan, other friends, in our approach. There were even worse opportunities than what we saw over the course of the year.

But now, we have a really toxic cocktail with the effect of sanctions, with low oil prices, with the impact finally being felt inside Russia of the economic mismanagement of the last 10 to 15 years, where the economy is so heavily hydrocarbon dependent.

So it is a point of decision making I think for the Russian leadership but also for the Russian people whether this aggressive policy vis-à-vis neighbors is worth it, and whether this choice to prioritize imperial ambition over the needs of your own citizens, over their well-being is really in the best interest of the Russian Federation.

  1. ARON: Please. Right there.

QUESTION: Hello, Ms. Nuland. I’m Mykola Vorobiov.

  1. ARON: Identify yourself.

QUESTION: Yeah. Yeah. I’m Mykola Vorobiov. I’m a Ukrainian journalist, political journalist, and since June, I am a military journalist to totally I spent around seven weeks in battle zone in eastern Ukraine. And I recently came here to share my experience from the ground.

And, firstly, I would like to express my regards from the Ukrainian people to everything you do for my country.

And, secondly, probably you are more aware than me, but I want just to remind something, really what happened there. So regarding military support, there are a lot of debates here. And around 80 percent of vehicles in the Ukrainian Army, it comes from the Soviet past, so most of vehicles is around 40, 50 years. I have– got some like Kalashnikov and some machine guns which had like maybe 60-year history. And this is really old, this is really ancient, and it’s impossible. So all modern weapons which we can receive like modern weapon – (inaudible) – it goes from Russians as (inaudible) of course. And even though in September, our president, he estimated they’ve already lost up to 70 percent of these vehicles in battle zones. So you probably know, and I believe that this is true.

I interviewed some Afghanistan veterans, I mean, a veteran who was engaged in the war in Afghanistan during the Soviet Union and now he went to Eastern Ukraine. And he said to me that compared to Afghanistan, it was a honeymoon for them in comparison with this full-scale war because all Taliban had, the most dangerous it was either Stinger or some rockets or machine guns but they never used (inaudible) missile launchers like Russians do right now in Eastern Ukraine. And –

  1. ARON: I’m sorry. If you could get to the question.

QUESTION: The question is about can we expect really military support regarding this? And are you aware that the Russians will never step back from Eastern Ukraine? Thank you.

ASSISTANT SECRETARY NULAND: Well, thank you for that. Just to say, with regard to your particular concern about armored vehicles, we have been in discussion with the Ukrainian government on this problem, particularly after the extremely intense fighting in August and September, which resulted in the loss of so much equipment.

And as the vice president announced when he was in Ukraine, we are now providing an opportunity for Ukraine to have some of the up-armored vehicles that are coming back from Afghanistan. And the Ukrainians are pretty good at fixing stuff so a lot of that will be repaired and made ready in Ukraine itself.

But you’re absolutely right. Part of the issue on the reform docket – and there’s quite a bit about this in the government reform plan – is that the entire structure of procurement, battle management of the Ukrainian military is going to have to be realigned and reformed. That’s going to take support. It’s going to take effort. That is why one of our main lines of work with Ukraine is this bottom-up review of the military that European command has been conducting, and beginning the equipping and training of Ukrainian military units at their request. So we’re very much focused on that.

Again, we will continue to use our tools of diplomatic pressure but also diplomatic opportunity to try to get Russia to fulfill the commitments that it made in Minsk. The Minsk agreement, signed by Russia, by separatists, by Ukraine on September 5th and elaborated on September 19th is a good and fair deal but it requires the return of that international border to sovereignty, closing it to further transfers of equipment and personnel. It requires a withdrawal of foreign forces and military. It requires a hostage exchange.

So that is what we are pushing for. We will continue to say to Russia that if that is fully implemented, sanctions will be rolled back. It’s Russia’s choice.

  1. ARON: Thanks. Right here. Yeah.

QUESTION: Thank you. Madame Secretary, thank you for your time. Very quickly –

  1. ARON: Who are you?

QUESTION: Forgive me. David Colton. It’s a pleasure. Madame Secretary, on your last point, Lavrov’s recent speeches seem to be resurrecting what Putin put on the table at Yalta, back in August, that is that the cutting loose of Novorossiya as an ideological project, pushing Donbas and its costs onto Ukraine and the West, they keep Crimea, and it’s sort of a mulligan. And that, after that Minsk Agreement which you mentioned, the Pskov brigades went in. The military escalation continued.

If in December 26th, going forward to resurrect Minsk, my question to you is how do we test the Russians that it’s not yet another temporary truce, particularly given that sanctions in Europe in two stages, I think early in the spring and then in summer, are scheduled to automatically wind down if not renew? Are they playing a different game to get out of sanctions with the same kind of (in Russian) they offered us from Yalta?

ASSISTANT SECRETARY NULAND: Look, I’ve long since stopped trying to get inside the head of decision makers in the Kremlin. It hasn’t been a productive exercise.

What we’re trying to do is to make it clear that there is another way, that if de-escalation happens on the Russian side, de-escalation will happen on the U.S. and the EU side, to make clear that what we’re asking is that they live up to the obligations that they undertook in September. You know, traditionally, in that part of the world, nobody likes to fight in the deep winter. Napoleon found out what happens when you try.

So the question is, can we use this period when fighting is never a good game, and the clear pressure that is evident now, to have cooler heads prevail, and to get back on a track where Minsk is implemented piece by piece in a way that brings peace and security and reintegration of Donbas.

The Ukrainian government understands that if that border gets closed and if they can have access again to their own people and their own cities, that there is an enormous reconstruction job to be done, that people have suffered a huge amount. I think they are prepared and we are prepared to help, but not in a circumstance where assistance is stolen to fuel the war effort, not in a circumstance where 500 pieces of additional military equipment have gone in since the Minsk agreement was signed.

So we have to hope that winter will be a period of cooler heads and come out of it in the spring in a better place but that is very much in the hands of those who are fueling this fire.

  1. ARON: Sir. Right there.

QUESTION: Thank you. Thank you for your comments, Madame Secretary. My name is Valery Kavaleuski. I’m from Belarus Politics Blog.

  1. ARON: Belarus Politics –

QUESTION: Blog. Yes.

  1. ARON: Blog. OK.

QUESTION: My question is about Belarus. Since the beginning of the war for Ukraine, there has been considerable change in the rhetoric of the United States with regard to the regime of Lukashenko, although there has been no change in the domestic policies of Lukashenko and his dictatorial practices.

Can you say anything about the policy change of the United States towards the regime of Lukashenko? Is there something ongoing or upcoming in this regard?

And the second question is about the statement of Sergei Lavrov, Russian foreign minister, about the right of Russia to deploy nuclear weapons in Crimea. What would be the response of the United States to this?

ASSISTANT SECRETARY NULAND: On the last point, first of all, Crimea belongs to Ukraine. Second of all, any effort to further militarize that region will be extremely dangerous and would not go unanswered I believe by those of us who also live in that neighborhood.

On the question of Belarus, I’m not sure quite what you’re referring to. We have for many years had an ongoing dialogue with the government of Belarus regarding our concerns about human rights, our concerns about the political environment for dissent. It’s been interesting, in the course of the last year, you’ve seen what we’ve seen, which is that the leadership in Belarus is quite uncomfortable being offered a binary choice.

And, you know, I remember seeing the prime minister of Belarus in September, and — at the UN General Assembly, and telling him that they’d done more for their country in having Minsk the term, the brand Minsk be emblematic of a peace deal than we’d seen in a long time.

But we remain open to a warmer, more integrated relationship with Belarus as the human rights situation improves. We’ve given some concrete ideas to the government of Belarus. We’ve been able to make some small steps together. We’re now issuing visas again there for the first time.

But, again, it’s in the hands of the leadership whether they want to take their country in a more democratic, open direction, and then we would obviously be able to respond, as would Europe.

  1. ARON: Oh, my goodness. Right over there. Yes, sir. You. Yeah. Yes. No, no. The person under the cameras there. Yes.


QUESTION: All right. Thank you. Creighton Jones with EIR. So my question for you, Victoria, I’m sure you’ve heard –

  1. ARON: Excuse me. What’s EIR?

QUESTION: Executive Intelligence Review.

  1. ARON: Okay.

QUESTION: You’ve probably seen the letter which has been circulating – it was printed in I think it was actually Die Zeit, and it was signed by 100 German officials, including former Chancellor Gerhard Schroeder, and it was titled “Again War in Europe, Not in Our Name.”

And the letter goes on to say, to those who would provoke Russia that remember the last person to attack Russia was Hitler and he was destroyed. Now, this is coming from Germans to evoke the image of Hitler, you can imagine the level of fear that exists among certain people about this going towards full-on confrontation, potentially nuclear.

So my question to you is, are you and the administration really prepared to push this thing all the way to the level of military confrontation with Russia? And if it did go to that, would you consider that a failed policy or is that part of the strategy to eventually go that far if need be?

ASSISTANT SECRETARY NULAND: Well, first of all, I would underscore the fact that the response that the U.S. and Europe have brought to bear to Russia’s aggression in Ukraine has been to use the considerable economic tools at our disposal in the form of sanctions – and political tools in the form of sanctions and the form of isolation.

We have not chosen to militarize this vis-à-vis Russia. What we are doing militarily is protecting allied territory because we have treaty obligation should NATO allies come under attack.

So it is Russia that has chosen the military course of aggression. We are seeking to change Russian choices, to bring them back into compliance with international law, primarily through political and economic tools.

  1. ARON: One more question?


  1. ARON: Please. Yes. Thanks for your patience.

QUESTION: Thank you, Mr. Aron. And thanks, Victoria, for doing this. My name is Andrei Sitov. I’m with the Russian News Agency Itar-Tass here in Washington, DC.

ASSISTANT SECRETARY NULAND: Andrei and I are old friends from my days at the podium.

QUESTION: Thank you, Victoria. I regard you as a friend also and a very skillful presenter of the American official position. Propaganda cuts both ways. I think that propaganda for the Americans is a very important tool which works probably for them better than for the Russians. Anyways.

Two questions, one from Lavrov, and one from myself.

Lavrov yesterday said that you had a satellite and an AWACS plane watching what was happening with the Malaysian airline which obviously is a major milestone in the Ukrainian conflict. Why are not you sharing the results of your observations? Russia has been asking for this for a very long time. It’s a very important point.

Secondly, from myself, obviously, economic news are in the forefront for all of us now. My question is very simple: when you hurt the Russian economy – and, by the way, I have been surprised by observing that you do want to hurt the economy and the people rather than the regime, and you’ve just described why, because you want the people to rebel, which is called regime change. But when you hurt the Russian economy, do you harm or help the Ukrainian economy? Thank you.

ASSISTANT SECRETARY NULAND: Andrei, first to your point with regard to U.S. intelligence at the time of the Malaysian airliner’s tragic shoot down, first, just to say to you that – just to remind you that Secretary Kerry on I believe it was July 21st, it was the Saturday after the shoot down, gave a very detailed discussion of what we knew from our own assets, including providing considerable detail with regard to the trajectory of the firing, et cetera.

And he made clear at that time that we believed it was shot down by a Buk missile from separatist-held territory. We stand by that. We have given all of our information, including our classified information, to the Dutch, who are the investigators, and to ICAO. And we will – we are –

  1. ARON: To whom?

ASSISTANT SECRETARY NULAND: And to ICAO, the International Civil Aviation Organization. So any efforts to say that we have not are also untrue. There will be, I believe, in the context of the Dutch case, when they roll it out – they are likely to ask us to declassify some of that, and I think we will be able to help in that regard.

But the best declassified set of information from U.S. assets is still contained in what Secretary Kerry said that day. It is — I believe it was the Saturday the 21st, but I don’t have the dates exactly in my head. We have also been very clear publicly and privately with the Russian Federation with regard to what we know.

I think the question is whether Russia has shared all of its information also with the Dutch and with ICAO. And we’ve encouraged both the Dutch and ICAO to seek information from Russia, because there’s been a lot of funky theories, let’s put it that way, coming out of Russian propaganda.

Now, on your second point. I completely reject your assertion that we seek to hurt the Russian people. On the contrary, we have sought for 20, 25 years to see that Russian people live in a more prosperous, more democratic, more open, more peaceful country. That is what I have personally committed my diplomatic career to over all these years. That’s what we have committed some 20 billion dollars in U.S. assistance to the Russian Federation over these 20 years too.

Our concern though is that it is the choices that the Russian leadership that is making that are now taking Russia back to a place of isolation, to a place where it is closed off, where its people are closed off, not just from clean, democratic, open information by the Kremlin’s propaganda campaign but also from their access to Europe, their access to markets, their access to that opportunity to live in a more open society.

So it’s the choices that the Russian leaders have made that are increasing inflation, that are closing off opportunities, even things like ending our high school exchange, which brought some 200 Russian kids to America every year. And you’ve seen, I hope, on Russian social media both on Facebook and on VKontakte all the Russian flex students saying, “Bring it back. We want a chance to go study in the United States.”

That’s the relationship we want. That’s the Russia that is in our interest, is a Russia that is strong, that is democratic, that lives up to its international obligations, that is a good partner for us. It is not we who have made these choices. It’s the leadership in Russia. It is extremely regrettable to us that the Russian people are now paying the price in their pocketbook. We want to go back to a place where we can work together, but it’s Russia’s choice.




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