President Vladimir Putin backs Crimea to join Russia in special address; treaty between Russia and Crimea is signed

RUSSIA ENERGY / FINANCE - In Brief 18 Mar 2014 by Marcel Salikhov
Today President Vladimir Putin made a special address in front of deputies of the State Duma and Federation Council, heads of regions today in Kremlin. The speech is a public justification and backing of Crimea to join Russia after the referendum of March, 16. The address was shown live by major TV channels. A treaty between Russian Federation and Republic of Crimea was also signed today by President V. Putin and Crimean PM S. Aksenov. According to the treaty, transitional period of integrating Crimea as a separate Russian region will last until January 1, 2015. The speech and treaty signal a hardline chosen by Russian authorities. Yesterday the US and EU announced a official start of measures (assets freeze and visa bans) against a number of individuals including V. Matvienko, head of Federation Council, deputies of the Duma and advisors to Mr Putin. So the conflict develops with rising tension. Diplomatic ‘backdoor’ offered by the West is basically rejected in Kremlin. President Putin made it clear that Russia is ready to integrate Crimea as a new region and will not compromise. At the same time it’s clear that Russia is ‘satisfied’ with Crimea and will not back other Eastern regions of Ukraine. So risks of an actual military action between Russia and Ukraine decrease. Probably that’s why Russian stock market shot up on Putin’s speech. The question is how tough the Western response will be. Both the U.S. and EU said they can widen the sanctions if Russia doesn’t change course (that is clearly not happening now). To the date announced sanctions would not significantly impact Russian economy. But the likehood of more serious steps increases as Russia stays hardline. In...

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