Russia risks G8 seat, economic turmoil over Ukraine: US

WASHINGTON (AFP) - US Secretary of State John Kerry bluntly warned Russia on Sunday that it risked losing its seat among the prestigious Group of Eight nations, as well as economic turmoil, if it fails to pull its forces out of Crimea.

Moscow could also face sanctions from its G8 allies and see American businesses pull out of the country if President Vladimir Putin failed to de-escalate tensions in Ukraine, Mr Kerry said, hitting the Sunday talk shows to ratchet up pressure on Russia.

Kiev's interim government warned Sunday its country stood on the brink of disaster, and called up military reservists after the Russian parliament voted to allow Mr Putin to send in troops to its western neighbor.

Mr Putin "is not going have a Sochi G8, he may not even remain in the G8 if this continues. He may find himself with asset freezes on Russian business, American business may pull back, there may be a further tumble of the ruble," Mr Kerry said.

"There is a huge price to pay. The United States is united, Russia is isolated. That is not a position of strength," the top US diplomat told NBC's Meet the Press.

Britain, and France have already pulled out of preparatory meetings this week for the G8 summit due to be held in June in Sochi, and, along with the US and Canada, have also threatened to boycott the summit itself.

"Russia chose this brazen act of aggression and moved in its forces on a completely trumped up set of pretexts," Mr Kerry told CBS's "Face the Nation."

"If Russia wants to be a G8 country, it needs to behave like a G8 country."

Nato chief Anders Fogh Rasmussen warned Europe's peace and security were at risk as he opened crisis talks of the military alliance in Brussels.

But Mr Kerry steered clear of warning of any US military action as pro-Moscow gunmen controlled swaths of Ukraine's southern Black Sea peninsula where the Kremlin has based naval fleets since the 18th century.

"The last thing anybody wants is a military option in this kind of situation. We want a peaceful resolution through the normal processes of international relations," Mr Kerry told NBC.

Mr Kerry again called on Mr Putin to de-esclate the tensions, saying "Russia and President Putin are aligning themselves with this kleptocracy" of ousted Ukrainian leader Viktor Yanukovych.

"They are aligning themselves with the person who was legitimately stripped of his power by the parliament even by his own supporters. I think this is an enormous mistake for Russia."

US lawmakers speaking on CNN meanwhile backed moves to suspend Russia's membership of the G8, which it joined in 1998. The Sochi summit in June will only be the second time that Moscow has hosted the prestigious annual gathering.

"The G8 plus some others and all of them, every single one of them, are prepared to go to the hilt in order to isolate Russia with respect to this invasion," Mr Kerry warned on CBS.

"They're prepared to put sanctions in place, they're prepared to isolate Russia economically, the ruble is already going down."

Russia's growth has already slowed to 1.3 per cent in 2013, down from 3.4 per cent the year before, and the ruble has lost more than eight percent against the euro since the start of the year.

Russian banks are greatly exposed to cash-strapped Ukraine, and the Fitch ratings agency warned last week that the country's state-owned banks hold the bulk of total exposure of an estimated US$28 billion (S$35 billion).

Comments