1 00:00:00,344 --> 00:00:04,720 JUDY WOODRUFF: And for more on the potential impact of these new sanctions, as well as the 2 00:00:04,720 --> 00:00:09,720 broader U.S. and European response to Russia's moves, Nick Schifrin is back with two views. 3 00:00:10,560 --> 00:00:13,280 NICK SCHIFRIN: Judy, thank you. 4 00:00:13,280 --> 00:00:15,920 For additional perspective, we turned to Stephen Hadley, 5 00:00:15,920 --> 00:00:19,360 national security adviser during the George W. Bush administration, 6 00:00:19,360 --> 00:00:23,840 and Andrew Weiss, who served in the George H.W. Bush and Clinton administrations 7 00:00:23,840 --> 00:00:28,560 on the National Security Council staff and the State Department's Policy Planning Staff. 8 00:00:28,560 --> 00:00:30,800 Welcome, both of you, back to the "NewsHour." 9 00:00:30,800 --> 00:00:33,280 So, we just heard from the deputy Treasury secretary. 10 00:00:33,280 --> 00:00:37,200 Andrew Weiss, let me start with you. Do these Russian banks have exposure to the 11 00:00:37,200 --> 00:00:42,200 U.S. financial system? And does targeting Russian oligarchs and sovereign debt have any impact? 12 00:00:43,840 --> 00:00:44,480 ANDREW WEISS, Carnegie Endowment for International Peace: Well, 13 00:00:44,480 --> 00:00:48,240 let's talk about what Vladimir Putin uses to fund his economy. 14 00:00:48,240 --> 00:00:53,240 He sells raw materials on global markets for dollars. So, every day, Russia sells four million 15 00:00:54,560 --> 00:00:59,560 barrels of oil. Oil right now is fluctuating around $100 a barrel. That is a remarkable 16 00:01:00,000 --> 00:01:05,000 cash flow that Putin is able to harness for whatever purpose. And money is always fungible. 17 00:01:05,520 --> 00:01:10,520 Since the crisis in 2014, the Russian economy, broadly speaking, has taken 18 00:01:11,600 --> 00:01:16,600 the reliance it once had on foreign capital markets and basically tossed it aside. So, 19 00:01:16,880 --> 00:01:21,200 the Russian economy today is increasingly cut off from the global economy, 20 00:01:21,200 --> 00:01:25,440 and far less dependent on Western capital markets to fund itself. 21 00:01:25,440 --> 00:01:29,120 It is clear that putting sanctions on well-connected people 22 00:01:29,120 --> 00:01:33,040 in the Russian (AUDIO GAP) is annoying and frustrating to them. 23 00:01:33,040 --> 00:01:38,040 But, remember, there are very hawkish figures around Vladimir Putin who actually benefit. 24 00:01:38,640 --> 00:01:43,360 The less Russia is globalized, the less it's connected, that gives them more control. 25 00:01:43,360 --> 00:01:46,480 And so, if you think about who's sitting in the war room right now 26 00:01:46,480 --> 00:01:50,240 with Vladimir Putin, it's not people who are thinking about their 401(k) accounts. 27 00:01:50,240 --> 00:01:52,240 NICK SCHIFRIN: 28 00:01:52,240 --> 00:01:57,240 Steve Hadley, let me get you to respond to not only the U.S. announcements of sanctions today, 29 00:01:57,760 --> 00:02:02,760 but the German, the British and the German announcements largely coming at the same time. 30 00:02:03,360 --> 00:02:07,040 STEPHEN HADLEY, Former U.S. National Security Adviser: Well, I think it's a good step. 31 00:02:07,040 --> 00:02:12,000 I'm afraid my own view is that it's not going to be enough to deter Vladimir Putin. 32 00:02:12,880 --> 00:02:17,680 He didn't bring 100,000 -- over 150,000 troops to the border of 33 00:02:17,680 --> 00:02:22,680 Ukraine to settle for putting peacekeepers in these two breakaway provinces, if you will. 34 00:02:25,760 --> 00:02:30,240 And I think how it's going to unfold is something like this. He has said he's 35 00:02:30,240 --> 00:02:35,240 recognized an area that is broader than just the territory occupied by his proxy forces, 36 00:02:36,960 --> 00:02:41,960 but it includes territory occupied by Ukrainian forces. And I think it could go in two ways. 37 00:02:43,600 --> 00:02:48,480 Russia either tells the Ukrainians to get out of that territory who are protected by 38 00:02:48,480 --> 00:02:53,480 Russian peacekeepers. Russian proxies move on Ukrainian forces. And, at that point, 39 00:02:55,120 --> 00:02:59,520 Ukraine will have to either back down or choose to fight. And if it chooses to fight, 40 00:02:59,520 --> 00:03:04,520 that would be an excuse that Putin could use to move these 150,000-plus forces into Ukraine. 41 00:03:07,120 --> 00:03:11,360 That's the scenario I worry about. And I don't think the sanctions today, 42 00:03:11,360 --> 00:03:13,840 regrettably, will deter him from doing so. 43 00:03:13,840 --> 00:03:18,320 NICK SCHIFRIN: So, Andrew Weiss, let me ask you about those scenarios in a minute. 44 00:03:18,320 --> 00:03:23,320 But let me just ask you first about Germany. How significant is it that Germany pulled, 45 00:03:23,920 --> 00:03:26,160 frankly, one of the most significant cards it has, 46 00:03:26,800 --> 00:03:31,800 which is to essentially cancel the Nord Stream 2 pipeline, the German-Russian pipeline that was 47 00:03:33,440 --> 00:03:37,280 suspended, but still could have gone forward had they not made that announcement today? 48 00:03:37,280 --> 00:03:40,560 ANDREW WEISS: I think the Western world really owes 49 00:03:40,560 --> 00:03:44,000 German Chancellor Schroeder (sic) a debt for taking this move today. 50 00:03:44,000 --> 00:03:48,720 And it's really the most important move of all the sanctions that were announced. It's good to see 51 00:03:48,720 --> 00:03:53,040 Western governments, including the White House, moving swiftly and responding to the outrageous 52 00:03:53,040 --> 00:03:58,040 things that Vladimir Putin said and did yesterday. So all of that's welcome. They show that they can 53 00:03:58,320 --> 00:04:03,320 move quickly. And, clearly, we're only seeing a down payment on a sanctions package that, 54 00:04:03,360 --> 00:04:07,600 as the crisis gets worse, is going to get broader and more far-reaching. 55 00:04:07,600 --> 00:04:12,560 So the administration is looking to the Germans to basically make sure that the 56 00:04:12,560 --> 00:04:17,040 European Union comes in alongside the United States. The United States' sanctions, I think, 57 00:04:17,040 --> 00:04:21,840 will be more far-reaching and more significant than what European partners are prepared to do. 58 00:04:22,400 --> 00:04:27,360 But particularly when it comes to Vladimir Putin's sense that the Germans are the soft spot, 59 00:04:27,360 --> 00:04:30,880 I think that that's been dispelled today by what the Germans have done 60 00:04:30,880 --> 00:04:35,880 by basically putting this pipeline project on indefinite suspension. 61 00:04:36,160 --> 00:04:40,720 NICK SCHIFRIN: Steve Hadley, let ask you about that idea of further U.S. sanctions. 62 00:04:40,720 --> 00:04:45,720 The U.S. is withholding some sanctions, most notably, the idea of 63 00:04:45,920 --> 00:04:49,520 export controls that would cut off U.S. technology 64 00:04:49,520 --> 00:04:54,520 that Russia needs. Is that the right thing to do in order to try and deter Putin? 65 00:04:55,840 --> 00:04:58,400 STEPHEN HADLEY: I think they have got the right approach, 66 00:04:58,400 --> 00:05:03,400 to have a portion of their ultimate sanctions package now, hold something in 67 00:05:04,480 --> 00:05:09,040 reserve if, as I fear, Putin does something bigger in Ukraine. 68 00:05:09,040 --> 00:05:13,200 I think the other thing, though, they need to think about and I'm sure are thinking about 69 00:05:13,200 --> 00:05:18,200 of whether they should do further reinforcements of our NATO allies that now find themselves on 70 00:05:18,800 --> 00:05:23,800 the front line with Russia and, again, the pace and the nature of the kind of 71 00:05:24,480 --> 00:05:28,560 supply that they are providing to Ukraine for their military forces 72 00:05:28,560 --> 00:05:33,560 to give them and put them in a position to resist a more massive Russian incursion. 73 00:05:33,600 --> 00:05:37,825 I'm sure the administration is thinking about both of those things. 74 00:05:37,825 --> 00:05:41,680 NICK SCHIFRIN: Andrew Weiss, the U.S. has indicated that it's unlikely to sanction 75 00:05:41,680 --> 00:05:45,680 Russian oil exports, those exports that you brought up at the beginning, 76 00:05:45,680 --> 00:05:50,000 that give Putin such an economic cushion right now. Is that a mistake? 77 00:05:50,000 --> 00:05:52,560 ANDREW WEISS: I don't think so. 78 00:05:52,560 --> 00:05:56,720 The challenge here whenever you're coming up with a sanctions regime is 79 00:05:56,720 --> 00:05:59,840 to remember that you want to hurt the other guy more than you hurt yourself. 80 00:05:59,840 --> 00:06:02,800 And we heard Secretary Adeyemo talk in those terms just now. 81 00:06:03,360 --> 00:06:08,360 The challenge is, is that the Russian economy is built around a system where they 82 00:06:09,760 --> 00:06:14,760 bring in their revenues in dollars, and then their domestic liabilities are denominated in rubles. 83 00:06:16,320 --> 00:06:21,320 In 2014, Russia did not have a free-floating exchange rate, and they blew through some of their 84 00:06:21,520 --> 00:06:26,320 currency reserves trying to defend their currency. They're not going to make that mistake, this time. 85 00:06:26,320 --> 00:06:30,880 They basically have salted away on the order of $630 billion in 86 00:06:31,440 --> 00:06:35,120 various hard currencies to deal with rainy day situations. 87 00:06:35,120 --> 00:06:40,120 And they're not going to basically use that to defend a currency rate that isn't tenable. 88 00:06:41,920 --> 00:06:45,840 What they will do, though, is, they will tighten their belts. They will use their 89 00:06:47,120 --> 00:06:50,400 receipts from selling various commodities on global markets to 90 00:06:50,960 --> 00:06:54,480 bolster the regime and to make sure that the people who matter the most, 91 00:06:54,480 --> 00:06:58,560 particularly people in the military and the security services, have what they need. 92 00:06:58,560 --> 00:07:02,320 It's the average Russian consumer who's going to be squeezed. And they have done this in 93 00:07:02,320 --> 00:07:07,320 previous cycles, where they basically said to Joe Six-Pack in Russia, sorry, you're going to 94 00:07:07,920 --> 00:07:12,920 lose out. So Russians are getting used to a crummy economic reality. They have had multiple years of 95 00:07:13,440 --> 00:07:18,320 declines in real incomes for average people. And the Russian government basically doesn't care. 96 00:07:18,320 --> 00:07:22,960 So we're seeing that divide between ruler and ruled widen in Russia. It 97 00:07:22,960 --> 00:07:26,960 poses a long-term challenge for Putin. But, at the moment, there's nothing on the political 98 00:07:26,960 --> 00:07:30,560 landscape that makes him uncomfortable or makes him worried about his hold on power. 99 00:07:30,560 --> 00:07:34,640 NICK SCHIFRIN: Steve Hadley, take us back to those assessments that 100 00:07:34,640 --> 00:07:38,000 you were laying at the beginning and zoom out for us a little bit. 101 00:07:38,000 --> 00:07:43,000 You have been in the national security space since the mid-'70s. How dangerous 102 00:07:43,760 --> 00:07:48,760 is this moment? How concerned should we all be about some kind of conflict in Ukraine spreading? 103 00:07:49,600 --> 00:07:54,600 STEPHEN HADLEY: I think it's a very dangerous moment. And we should be concerned. 104 00:07:56,560 --> 00:08:01,560 I think, if the Russians do what we fear that they are going to, do in terms of taking a 105 00:08:02,880 --> 00:08:07,880 good chunk of Ukraine, recognizing what they want to do is to have a pro-Russian government 106 00:08:08,640 --> 00:08:13,640 in Kyiv that will put Ukraine under the Russians' sphere of influence, and maybe except some kind 107 00:08:15,680 --> 00:08:20,680 of confederation between Belarus, Russia, and Ukraine, that's really what Putin is about. 108 00:08:21,280 --> 00:08:25,360 It's the restoration of the Russian empire. If he moves in that direction, 109 00:08:25,360 --> 00:08:30,360 the question is, what does it mean if you are in the Baltic states, if you're in 110 00:08:30,560 --> 00:08:35,560 Romania or you're in Bulgaria? For example, one of the questions that will be on the table is, 111 00:08:36,720 --> 00:08:41,720 there is a portion, as you know, of Russia that is disconnected from Russia. It is 112 00:08:42,000 --> 00:08:45,280 separated from mother Russia, if you will, by Poland and Lithuania. 113 00:08:46,720 --> 00:08:51,720 And the question is, does Russia bulldoze the corridor, to kayak up Kaliningrad, 114 00:08:52,400 --> 00:08:57,280 with the rest of Russia? That -- it means taking territory from the Baltic states, 115 00:08:57,280 --> 00:09:01,680 from Poland. That invokes Article 5 of NATO. That invokes war. 116 00:09:01,680 --> 00:09:06,680 So we have a serious situation in Europe. And I would say, at the same 117 00:09:07,040 --> 00:09:11,760 time we try to manage this deteriorating situation in Europe, we have got the 118 00:09:11,760 --> 00:09:16,080 challenge of China, and we also have the challenge of Iran in the Middle East. 119 00:09:16,080 --> 00:09:21,080 This is a huge agenda for America, raising a real risk of overstretch. 120 00:09:22,560 --> 00:09:25,920 And we're going to need a lot of friends and allies and help from others if we're 121 00:09:25,920 --> 00:09:29,600 going to manage what I think is going to be a very challenging time going forward. 122 00:09:29,600 --> 00:09:34,600 NICK SCHIFRIN: Stephen Hadley, Andrew Weiss, thanks to you both. 123 00:09:35,840 --> 00:09:40,840 STEPHEN HADLEY: Nice to be with you.