Obama warns Russia on Ukraine

President Obama warned Russia Friday to avoid a military intervention in Ukraine, saying there would be consequences for such actions.

Speaking in the White House Briefing Room, Obama said he is “deeply concerned by reports of military movements taken by the Russian federation inside of Ukraine.” He was apparently referring to reports that armed men, perhaps affiliated with the Russian army, had seized to airports in the Crimea region, a strategically important peninsula with a predominantly ethnic Russian population.

“There will be costs to any military intervention in Ukraine,” Obama said, adding that such a move would  “invite the condemnation of nations around the world.”

Ukraine’s uprising has driven President Viktor Yanukovych to neighboring Russia, where he has asked for and received protection from Russian President Vladimir Putin. Yanukovych called on Russia Friday to help return him to the presidency in Ukraine, using “all the leverage it has to prevent chaos in terror” in Ukraine.

Ukraine, a former Soviet republic, is closely divided between those who look to Russia and those who look to Europe and the West for political orientation and economic possibility. Obama said in his statement that the political unrest in Ukraine has revealed “how difficult democracy can be in a divided country.”

Here is the president’s full statement:

Over the last several days, the United States has been responding to events as they unfold in Ukraine. Throughout this crisis, we have been very clear about one fundamental principle: The Ukrainian people deserve the opportunity to determine their own future. Together with our European allies, we have urged an end to the violence and encouraged Ukrainians to pursue a course in which they stabilize their country, forge a broad-based government and move to elections this spring.

I also spoke several days ago with President Putin, and my administration has been in daily communication with Russian officials, and we’ve made clear that they can be part of an international community’s effort to support the stability and success of a united Ukraine going forward, which is not only in the interest of The people of Ukraine and the international community, but also in Russia’s interest.

However, we are now deeply concerned by reports of military movements taken by the Russian Federation inside of Ukraine. Russia has a historic relationship with Ukraine, including cultural and economic ties, and a military facility in Crimea, but any violation of Ukraine’s sovereignty and territorial integrity would be deeply destabilizing, which is not in the interest of Ukraine, Russia, or Europe.

It would represent a profound interference in matters that must be determined by the Ukrainian people. It would be a clear violence of Russia’s commitment to respect the independence and sovereignty and borders of Ukraine, and of international laws. And just days after the world came to Russia for the Olympic Games, it would invite the condemnation of nations around the world. And indeed, the United States will stand with the international community in affirming that there will be costs for any military intervention in Ukraine.

The events of the past several months remind us of how difficult democracy can be in a country with deep divisions. But the Ukrainian people have also reminded us that human beings have a universal right to determine their own future.

Right now, the situation remains very fluid. Vice President Biden just spoke with Prime Minister — the Prime Minister of Ukraine to assure him that in this difficult moment the United States supports his government’s efforts and stands for the sovereignty, territorial integrity and democratic future of Ukraine. I also commend the Ukrainian government’s restraint and its commitment to uphold its international obligations.

We will continue to coordinate closely with our European allies. We will continue to communicate directly with the Russian government. And we will continue to keep all of you in the press corps and the American people informed as events develop.

Thanks very much.

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European Union Warns on Bitcoin

LONDON – The European Union on Friday added to a string of recent warnings about the safety of using and investing in Bitcoin, the virtual currency that is not issued by any government.

The union’s banking authority said consumers needed to be aware that they were not protected through regulation when paying with Bitcoins. The digital currency is vulnerable to hackers, might lose its value and any misuse could prompt law enforcement agencies to close Bitcoin exchange platforms and keep consumers from accessing their investment, the European regulator said.

“Currently, no specific protection exists in the E.U. that would protect consumers from financial losses if a platform that exchanges or holds virtual currencies fails or goes out of business,” the European Banking Authority said, adding that it was looking into whether such currencies could and should be regulated.

The warning comes after China last week restricted its banks from using Bitcoin as currency because of concerns about money laundering and a threat to financial stability. Germany said earlier this year that it would not recognize Bitcoin as a foreign currency and that gains from buying and selling Bitcoins would be taxable. Norway has been considering a similar stance.

Since its creation in 2009 by anonymous programmers, Bitcoin has surged in popularity and consumers have been using the virtual currency to pay for goods and services. But some authorities and regulators decided only recently to treat the currency as something more serious than a temporary mania.

New York state’s top financial regulator, Benjamin M. Lawsky, said in November that he would consider issuing a so-called BitLicense for businesses that conduct transactions in virtual currencies like Bitcoin. At a Senate hearing last month, regulatory officials said virtual currencies could benefit the financial system but could also be abused for criminal activity.

Britain’s financial regulator has said it does not consider Bitcoin to be within its area of responsibility because the currency was not used widely enough to be considered money.

The European Banking Authority said “cases have been reported of consumers losing significant amounts of virtual currency with little prospect of having it returned.”

“While virtual currencies continue to hit the headlines and are enjoying increasing popularity, consumers need to remain aware of the risks associated with them,” the European authority said. Germany and China this month detained a group of people on suspicion of fraud linked to the virtual currency.

The authority also warned that consumers should “remain mindful that holding virtual currencies may have tax implications.”

The value of Bitcoin rose beyond $1,100 in November, leaving its total worldwide value at more than $11 billion, but it has dropped below $1,000 since then.

Sustaining Ukraine’s Breakthrough by George Soros

George Soros

George Soros Uses Quantum Mechanics To Describe How Amazing The Ukrainian Revolution Is

NEW YORK – Following a crescendo of terrifying violence, the Ukrainian uprising has had a surprisingly positive outcome. Contrary to all rational expectations, a group of citizens armed with not much more than sticks and shields made of cardboard boxes and metal garbage-can lids overwhelmed a police force firing live ammunition. There were many casualties, but the citizens prevailed. This was one of those historic moments that leave a lasting imprint on a society’s collective memory.

How could such a thing happen? Werner Heisenberg’s uncertainty principle in quantum mechanics offers a fitting metaphor. According to Heisenberg, subatomic phenomena can manifest themselves as particles or waves; similarly, human beings may alternate between behaving as individual particles or as components of a larger wave. In other words, the unpredictability of historical events like those in Ukraine has to do with an element of uncertainty in human identity.

People’s identity is made up of individual elements and elements of larger units to which they belong, and peoples’ impact on reality depends on which elements dominate their behavior. When civilians launched a suicidal attack on an armed force in Kyiv on February 20, their sense of representing “the nation” far outweighed their concern with their individual mortality. The result was to swing a deeply divided society from the verge of civil war to an unprecedented sense of unity.

Whether that unity endures will depend on how Europe responds. Ukrainians have demonstrated their allegiance to a European Union that is itself hopelessly divided, with the euro crisis pitting creditor and debtor countries against one another. That is why the EU was hopelessly outmaneuvered by Russia in the negotiations with Ukraine over an Association Agreement.

True to form, the EU under German leadership offered far too little and demanded far too much from Ukraine. Now, after the Ukrainian people’s commitment to closer ties with Europe fueled a successful popular insurrection, the EU, along with the International Monetary Fund, is putting together a multibillion-dollar rescue package to save the country from financial collapse. But that will not be sufficient to sustain the national unity that Ukraine will need in the coming years.

I established the Renaissance Foundation in Ukraine in 1990 – before the country achieved independence. The foundation did not participate in the recent uprising, but it did serve as a defender of those targeted by official repression. The foundation is now ready to support Ukrainians’ strongly felt desire to establish resilient democratic institutions (above all, an independent and professional judiciary). But Ukraine will need outside assistance that only the EU can provide: management expertise and access to markets.

In the remarkable transformation of Central Europe’s economies in the 1990’s, management expertise and market access resulted from massive investments by German and other EU-based companies, which integrated local producers into their global value chains. Ukraine, with its high-quality human capital and diversified economy, is a potentially attractive investment destination. But realizing this potential requires improving the business climate across the economy as a whole and within individual sectors – particularly by addressing the endemic corruption and weak rule of law that are deterring foreign and domestic investors alike.

In addition to encouraging foreign direct investment, the EU could provide support to train local companies’ managers and help them develop their business strategies, with service providers remunerated by equity stakes or profit-sharing. An effective way to roll out such support to a large number of companies would be to combine it with credit lines provided by commercial banks. To encourage participation, the European Bank for Reconstruction and Development (EBRD) could invest in companies alongside foreign and local investors, as it did in Central Europe.

Ukraine would thus open its domestic market to goods manufactured or assembled by European companies’ wholly- or partly-owned subsidiaries, while the EU would increase market access for Ukrainian companies and help them integrate into global markets.

I hope and trust that Europe under German leadership will rise to the occasion. I have been arguing for several years that Germany should accept the responsibilities and liabilities of its dominant position in Europe. Today, Ukraine needs a modern-day equivalent of the Marshall Plan, by which the United States helped to reconstruct Europe after World War II. Germany ought to play the same role today as the US did then.

I must, however, end with a word of caution. The Marshall Plan did not include the Soviet bloc, thereby reinforcing the Cold War division of Europe. A replay of the Cold War would cause immense damage to both Russia and Europe, and most of all to Ukraine, which is situated between them. Ukraine depends on Russian gas, and it needs access to European markets for its products; it must have good relations with both sides.

Here, too, Germany should take the lead. Chancellor Angela Merkel must reach out to President Vladimir Putin to ensure that Russia is a partner, not an opponent, in the Ukrainian renaissance.

Ukraine’s Currency Is Getting Obliterated

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Ukraine’s hryvnia dropped another 7.7% today to 11 per dollar today.

According to Bloomberg, the currency has now dropped 19% in the past four days.

The country continues to be in chaos. Earlier today, armed men took control of a parliament building in Ukraine’s Crimea region. Meanwhile, fugitive president Viktor Yanukovych remains on the run.  According to the AP, he was last seen in a hotel in Moscow.

Ukraine’s leaders are currently seeking a bailout of as much as $35 billion.

Defiant Yanukovych Finds Protection In Moscow

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Ousted Ukrainian president surfaces for the first time since going on the run five days ago, as armed pro-Russian separatists take over a parliament building in the Crimea

Ukraine’s deposed president, Viktor Yanukovych, has surfaced for the first time since going on the run five days ago, declaring that he had fled to Russia but still proclaiming himself the “legal head of the Ukrainian state”.

In his first comments since a warrant was issued against him for mass murder, Mr Yanukovych confirmed rumours that he had sought refuge in neighbouring Russia, but said considered the charges against him to be illegal.

“I still consider myself to be the legal head of the Ukrainian state,” said he said in a statement sent to Russian news agencies. “I am compelled to ask the Russian Federation to ensure my personal security from the actions of extremists.”

He added that decisions by the new Ukrainian parliament “do not have legitimate character.” Separately, government sources in Russia confirmed that they had agreed to ensure his “personal safety”.

Mr Yanukovych’s exact whereabouts are still a matter of speculation. He was last seen with a few key aides in the fishing village of Crimea over the weekend, where he told the bulk of his bodyguard entourage that they were free to leave him.

Reports in the last 24 hours have placed him at various hotels in Moscow and at a sanitorium run by the Russian department of presidential affairs, on a highway west of the capital.

A Russian official was quoted as saying that Moscow has accepted the plea of fugitive President Yanukovych who had asked for protection.

Three Russian news agencies quoted an unnamed official saying that Mr Yanukovych’s request for protection “was satisfied on the territory of Russia.”

Mr Yanukovych, who fled from Ukraine’s capital Kiev last week, said in the Thursday statement that he still considers himself to be the legitimate leader.

Mr Yanukovych surfaced as Ukraine new pro-Western leader warned Russia against “military aggression” after armed pro-Russian separatists stormed government buildings in the eastern Crimean region.

The comments from Oleksander Turchinov, the acting president, came as militiamen carrying automatic weapons raised the Russian flag over Crimea’s regional parliament buildings.

The move, which will raise fears of the country splitting into pro-Eastern and pro-Western factions, follows a massive show of force from Russia near the Ukrainian border, including measures to tighten security at its Black Sea Fleet port that it rents from Ukraine in Sevastopol.

Mr Turchinov, who is also the head of Ukraine’s armed forces, told the Ukrainian parliament: “I am appealing to the military leadership of the Russian Black Sea fleet … Any military movements, the more so if they are with weapons, beyond the boundaries of this territory (the base) will be seen by us as military aggression.”

He also described the men who had seized the Crimean regional parliament as “Criminals in military fatigues”. HI

Sensing a potential flashpoint in the making, the government of neighbouring Poland, which helped broker last week’s peace talks between pro and anti-government factions, also warned the gunmen that they could be dragging into civil war.

“This is a drastic step and I’m warning those who did this and those who allowed them to do this, because this is how regional conflicts begin,” said Poland’s foreign minister, “. “This is a very dangerous game.”

A Reuters correspondent on the scene in the Crimean capital, Simferopol, said the door of the parliament was blockaded from inside by tables and chairs and no one was now able to enter.

Interfax news agency quoted a witness as saying there were about 60 people inside and that they had many weapons. It said no one had been hurt when the buildings were seized in the early hours of Thursday.

“I heard gunfire in the night, came down and saw lots of people going in. Some then left. I’m not sure how many are still in there,” a 30-year-old man who gave his name only as Roman told Reuters.

Crimea, the only Ukrainian region with an ethnic Russian majority, is the last big bastion of opposition to the new political leadership in Kiev following the ouster of President Viktor Yanukovich on Saturday.

Ukraine’s new leaders have been voicing alarm over signs of separatism there. The seizure of the building was confirmed by the country’s acting interior minister, Ukrainian television said, but he gave few details.

Russian President Vladimir Putin has ignored calls by some ethnic Russians in Crimea to reclaim the territory handed to then Soviet Ukraine by Soviet Communist leader Nikita Khrushchev in 1954.

The United States says any Russian military action would be a grave mistake.

Ethnic Tatars who support Ukraine’s new leaders and pro-Russia separatists had confronted each other outside the regional parliament on Wednesday.

A local Tatar leader, Refat Chubarov, said on Facebook: “I have been told that the buildings of parliament and the council of ministers have been occupied by armed men in uniforms that do not bear any recognisable insignia.”

“They have not yet made any demands,” he said.

Arsen Avakov, the acting Interior Minister, wrote on Facebook that men with “automatic weapons” occupied the regional parliament building. Police and interior ministry troops have been deployed to the area and formed a chain around the building “to prevent bloodshed amongst the civil population,” he wrote.

“A number of other measures have been adopted to counter the development of extremist actions and prevent the situation from developing into an armed conflict in the city centre.”

About 100 police were gathered in front of the parliament building. Doors into the building appeared to have been blocked by wooden crates.

The streets around the parliament were mostly empty apart from people going to work.

Yanukovich was ousted after three months of unrest led by protesters in Kiev. He is now on the run being sought by the new authorities for murder in connection with the deaths of around 100 people during the conflict.

With a part of Russia’s Black Sea fleet based in the port of Sevastopol, Crimea it is the only region of Ukraine where ethnic Russians dominate in numbers, although many ethnic Ukrainians in other eastern areas speak Russian as their first language.

The Tatars, a Turkic ethnic group, were victimised by Soviet dictator Josef Stalin in World War Two and deported en masse to Soviet Central Asia in 1944 on suspicion of collaborating with Nazi Germany.

Tens of thousands of them returned to their homeland after Ukraine gained independence with the collapse of the Soviet Union at the end of 1991.

Pro Russian vigilantes established check points on roads leading into Sevastopol on Wednesday, checking cars for suspected revolutionaries from the capital.

Men in camouflage uniforms and leather jackets bearing the insignia of the Night Wolves biker gang stopped a car carrying telegraph journalists last night

They demanded journalists present documents but grew aggressive when asked what they were looking for.

“I’m defending my country. Now get out of here,” said one.

North Korea Fires Short-Range Missiles, Disrupts Easing Tensions

Soldiers in the North Korean army train at an undisclosed location on Wednesday, March 6. North Korea launched four short-range missiles, the first such action in more than nine months, disrupting a period of easing tensions with the South.

The missiles were fired into the sea from North Korea’s east coast shortly before 6 p.m. local time, and had a range of 200 kilometers (124 miles), South Korea’s Defense Ministry said.

The launches came days after the two countries wrapped up the first reunions in more than three years of families divided by the 1950-1953 Korean War, and held bilateral talks on improving ties. Still, the North has denounced the annual U.S.- South Korea drills that began this week as a rehearsal for war, and the exercises have previously prompted reaction from Kim Jong Un’s regime.

Key Resolve and Foal Eagle, the two sets of drills between the U.S. and South Korea, will draw thousands of U.S. troops from abroad, ending on March 6 and April 18, respectively, according to U.S. Forces Korea. The U.S. maintains 28,500 troops in South Korea to help rebuff any attack from the North.

South Korea previously said a North Korean naval boat crossed the disputed Yellow Sea boundary on Feb. 24, turning back after the South issued warning messages via radio.

North Korea last fired short-range missiles in May, testing six of them in a period of three days in defiance of global sanctions. The North said at the time it was exercising its right to test-fire rockets as part of regular military drills.

South Korea’s defense ministry said it is still analyzing why North Korea launched the missiles.

Ukraine crisis: Armed men hoist Russian flag after seizing Crimea Parliament

Armed men have seized the regional government headquarters and parliament on Ukraine’s Crimea peninsula, Interfax news agency said on Thursday.

It was not immediately clear who was in control of the buildings but a Reuters correspondent on the scene said the Russian flag was flying over both in the regional capital, Simferopol.

Ethnic Tatars who support Ukraine’s new leaders and pro-Russia separatists had confronted each other outside the regional parliament on Wednesday.

Interfax quoted a local Tatar leader, Refat Chubarov, as saying on Facebook: “I have been told that the buildings of parliament and the council of ministers have been occupied by armed men in uniforms that do not bear any recognisable insignia.”

“They have not yet made any demands,” he said.

About 100 police were gathered in front of the parliament building. Doors into the building appeared to have been blocked by wooden crates.

The streets around the parliament were mostly empty apart from people going to work.

“I heard gunfire in the night, came down and saw lots of people going in. Some then left. I’m not sure how many are still in there,” said a 30-year-old man who gave his name only as Roman.

Ukrainian President Viktor Yanukovich was ousted on Saturday after three months of unrest led by protesters in Kiev.

He is now on the run being sought by the new authorities for murder in connection with the deaths of around 100 people during the conflict.

Crimea was transferred from Russia to Ukraine in 1954 in the Soviet-era by then Soviet leader Nikita Khrushchev.

With a part of Russia’s Black Sea fleet based in the port of Sevastopol, it is the only region of Ukraine where ethnic Russians dominate in numbers, although many ethnic Ukrainians in other eastern areas speak Russian as their first language.

With Crimea now the last big bastion of opposition to the new post-Yanukovich political order in Kiev, Ukraine’s new leaders have been voicing alarm over signs of separatism there.

The Tatars, a Turkic ethnic group, were victimised by Soviet dictator Josef Stalin in World War Two and deported en masse to Soviet Central Asia in 1944 on suspicion of collaborating with Nazi Germany.

Tens of thousands of them returned to their homeland after Ukraine gained independence with the collapse of the Soviet Union at the end of 1991.