the ukraine/russia conflict. that will start shortly and we will take you there.

>> here at the senate foreign relations committee will be a hearing about the ukraine conflict. federal officials will be testifying. there has been progress toward a cease-fire with russian backed rebels and creating a buffer zone in ukraine. the president of ukraine says they have pulled act from the frontline -- back from the front lines. we are waiting for the ranking member bob menendez. this should begin momentarily.

>> the committee will come to order. we will begin this by expressing the condolences to the family of forest them solve. -- boris nemsov. he sought a better future for his people and we must remain committed to a democratic russia at peace with itself and its neighbors. he was critical of vladimir putin's aggression in ukraine. russia has continued its occupation of crimea and the

destabilization of the region. we made a commitment in 1994 to ukraine -- defend ukraine. that has been under assault for more than a year. more recently, we lord ukraine -- lord ukraine -- leured we train -- ukraine west. we put further pressure on russia. that is a blight on it u.s. policy. the conflict in eastern ukraine was started by a russian act mercenary involved with thousands of russian military personnel's. there have been 6000 deaths and 1.5 million refugees. for two weeks after the cease-fire agreement was signed on february 12, the rebels

continued their offensive activities acquiring a railway have. -- hub. the determination to acquire that hub shows that vladimir putin has no intention of honoring the cease-fire. while the violence has subsided a, it is far from a success. in addition to the ambiguous conditions required by ukraine to regain control of its orders, it is burdened by the first agreement as it stands. administration officials have repeatedly referred to the recent accord as an implementation agreement of the first accord.

jumping from cease-fire to cease-fire and hope to convince rebels is not a strategy. it is not a strategy for success. in my view, any strategy will not be effective unless the united states begins to provide ukraine with the ability to inflict military cost using defensive weapons on the russian troops operating in its recent -- eastern region. ukraine freedom support act passed unanimously i congress and signed into law on the president authorizes three-hitter $50 million in lethal military assistance. we heard the german ambassador say president obama pledged to chancellor merkel that the united states will not deliver lethal military assistance to ukraine despite continuing to tell the american public that they are seriously considering

this policy. tony blanck and argued that no amount of military assistance would be sufficient to defeat the rebels and the russian sponsors. our objective is not to provide ukraine with enough weapons to overwhelm the russian military. the provision of legal assistance is aimed to increase their defense capabilities in a way that will give them the ability to produce conditions on the ground favorable to genuine peace. by equipping them with the means to impose a greater cost on russia, we will provide a more stable settlement to the conflict. our support for ukraine must go beyond imposing costs on russia. the currency reserves have diminished. the currency has lost 80% of its value since april 2014 and the

economy teeters on the brink of collapse. while the government in ukraine is needing reform, they need to move forward with these reforms in the energy sector where corruption siphons billions of dollars away from the budget. even if we did more to help ukraine and they defeat the russian rebels, the economy implodes and we have failed and vladimir putin has succeeded. this is why the united states must have a comprehensive strategy that will counter russian aggression and drive clinical and anti-corruption reforming ukraine. i hope to have a discussion that explores the situation in eastern ukraine since the cease-fire was signed and examine why we have failed to

provide the ukraine with military assistance and considers additional ways to support ukraine in this. i thank you for being here. i will turn it over to our distinguished ranking member. >> thank you for holding an extraordinarily important and timely hearing on countering russia in ukraine. i appreciate our witnesses being here. let me join you in heartfelt condolences to someone who was a courageous opposition leader. sometimes true patriot pay a price. boris nemsov led efforts he passionately leaved in. -- believed in. i find it outrageous to see the

narrative that is being portrayed that it was an islamist plot why he was assassinated. to his family and friends, we have our heartfelt thoughts and condolences. as a relates to the hearing, there are many experts who would contend that the complexity of geopolitics that led to the retreat from europe created an opening for g putin in ukraine. without doubt, we can agree on one point area to the united states must take the lead. i believe the administration should fully implement measures in ukraine. the legislation passed with unanimous consent in both houses of congress. it authorizes the president to provide ella terry and

humanitarian aid to ukraine. it imposes additional sanctions against russia. this legislation was necessary in december and it's necessary today. we all want a diplomatic solution. i want this can only come about when vladimir putin believes the cost to ravage ukraine is too high. providing nonlethal equipment like night vision goggles is all well and good. giving them the ability to see russians cum coming but not the ability stop them is not the answer. providing anti-tank and anti- armor weapons would be far better. i am disappointed that the administration required to report to congress on its plan for increasing ella terry assistance on february 15 --

military assistance on a february 15 has not reported. i was happy to send a letter about that. we need to see this overdue report. it's time to impose additional targeted sanctions on the russian energy sector and add to sanctions that are costing the economy $140 billion per year. that is about 7% of their economy. we should tighten restrictions on offshore drilling. we don't want to use american technology that would give russia shale technology. the it in a strange and -- administration needs to target other things as well. i am still waiting for the administration to respond. at the end of the day, the most effective sanction is economically viable and stable ukraine. we may provide $1 billion in

loan guarantees on top of the 2 billion in guarantees already provided. this is a worthy investment and it needs to be matched by continued reforms by the ukrainians. i think we need to reinforce the transatlantic agenda. we need a strategic approach. we need to reinvigorate the institutions. we need to sharpen our arsenal of response options, that means nato and eu integration. in my view the tension has been necessary. we need to focus on the south. that is vulnerable to russian influence. we need to increase -- our intelligence community needs to

reprioritize the russian threat. not only by addressing each security threat but across the board in europe. i understand the administration is working with a broadcasting board of governors to commit $22 million to russian programming. i think that and other public diplomacy funds are incredibly important to rep -- counter russian propaganda. they are overwhelmed by russian propaganda. there is one key point and at the end of the day that is a strong american leadership is what will matter. i asked that my statement be included in the record. >> without objection. absolutely. we will turn to the witnesses. our first witness is victoria nuland: assistant secretary of state. our second is the principal

deputy at the secretary of defense. our third witness is the assistant secretary of treasury for international finance and our fourth witness is the director of strategic plans at the joint staff. we thank you for being here and sharing your thoughts and viewpoints. your statement will be entered into the record without objection. please summarize. we look forward to questions. thank you very much for being here. victoria nuland: thank you for the opportunity to join you and talk about the situation in ukraine and for the investment that you have made in that country's future. ukraine is central to our transatlantic quest for a europe at peace. my colleagues and i are pleased

to update you on efforts to support ukraine as it works to liberate the country from its corrupt past and chart a more democratic future and to bring it into the russian aggression. in my remarks i will focus on two areas. the first is the work that ukraine is doing with our support to reform the country and tackle corruption and strengthen institutions. second, i will give an update on our support of the ample mentation of the agreements, including further costs on russia if the commitments are further violent. ukraine's leaders know that they are in a race against time and external pressure to clean up the country and an act socially painful reforms that will kickstart the economy and meet their commitments to their own

people. the package of reforms already put forward the government and enacted is impressive in its scope and political courage. just last week, they passed budget reforms expected to slash the budget significantly and give more control to local communities and spur economic decentralization. they have made tough choices in the last few days to reduce benefits and have a higher retirement age. they have new banking positions. they have passed laws cutting wasteful gas subsidies and closing the space to corrupt middlemen who rip off the people. they will use the $400 million

in increased revenue to care for the 1.7 million people who have been driven from their homes by the conflict. with our support, with your support in a congress, with a loan guarantee from last year, the government is improving energy efficiency in homes and factories. they are building government platforms to make the government more transparent and services more public accessible. they are putting a new trained force of cops on the streets who will protect the citizens. they are reforming the prosecutor general's office supported by u.s. law enforcement. they want to energize law

enforcement and increase prosecution. with the help of usaid, they are deregulating the agriculture sector and allowing people to sell more of their produce. they are helping those forced to flee with new jobs and skill training in places. there is more support on the way. the president budget requests $513 million to build on these efforts. as you said, the hard work must continue. between now and summer, we must see continued discipline and tax collection enforced throughout the country. the richest cysts -- citizens have avoided taxes for far too long. we need to see passage of agricultural legislation.

we need to see anticorruption measures, including a commitment to break the oligarchic culture that has ripped off the country for far too long. as you both said, the best antidote to russian aggression is for ukraine to succeed as a democratic, free-market state. we have to help ensure that the government lives up to its promises to its own people and keeps the trust of the international financial community. the united states and europe must keep faith with ukraine and help ensure that russia's aggression can't crash ukraine's spirit or will. that brings me to my second point. even if ukraine is a more independent nation across 93% of its territory crimea has

suffered arena terror. -- arena of terror. --a reain of terror. this is financed at the expense of russian taxpayers. it has cost the lives of 6000 ukrainians and young russians have also lost their lives. they were sent there to fight and die i the kremlin. when they come home in coffins their mothers and their wives and their children are told not to ask questions or raise a fuss if they want to see death benefits. throughout this conflict, the united states and europe has worked to him floor -- implore

sanctions. our unity with europe remains the cornerstone of our policy toward this crisis and a fundamental source of strength area it is in that spirit that we salute the french president and german chancellor to and the fighting in eastern ukraine. the agreements offer real opportunity for peace disarmament, political normalization, and the you -- return of ukrainian sovereignty in the east. the conditions have already begun to improve. the report that the cease-fire is holding, there has been significant withdrawals of weapons and some separatists.

that process is incomplete as is access. in a village mining has already begun. the picture is very mixed. just yesterday, shelling continued in a key village. as i said, access for monitors remains spotty. just in the last few days, we can confirm new transfers of tanks, armored vehicles, heavy artillery and rockets across the border. in the coming days, this is what we need to see. a complete cease-fire in all parts of eastern ukraine. access to the conflict zone.

a pullback of heavy weapons and an end to unexpected cargo. if implemented, this will bring these and security to eastern ukraine for the first time almost a year. as the president has said, we will judge russia by its actions, not by his words. the united states will start rolling back sanctions on russia, but only when the agreements are fully implemented. the reverse is true. if these are not implemented there will be more sanctions and we have begun consultations with their european partners on further sanction pressure should russia continued to fuel the fire in the east or other parts of ukraine and failed to implement. mr. chairman, america's investment in ukraine is about

far more than protecting the choice of a single country. it's about protecting europe and globally. it's about saying no to borders changed by force. it is about defending countries bullied either neighbors. thank you. >> thank you very much. i appreciate the opportunity to appear here today. i have spent half of my professional life on the staff of this committee under senator biden, it's good to be back in this room. the statement i have submitted which i will not summarize is on behalf of myself and the admiral. i won't repeat the state of play.

since the beginning of this crisis, the united states has pursued a multipronged approach. we have raise the costs of russia and reassured our support to security. we have provided support to ukraine. working closely with europe, the administration has imposed real cost on russia. the department of defense has halted military cooperation with russia. they have prohibited exports of technology that could be used in military modernization. we are taking concrete measures to reassure our allies and partners in europe to deter future aggression. the eri is improving

facilities needed to reinforce the border. funds will be used to bolster our assistance to the altered partners. as part of our reassurance measures, we have attained a presence of forces in each of the baltic states, poland, and the black sea. we have had a persistent presence in romania and bulgaria. we tripled the aircraft taking part in our policing rotations and refuel aircraft. we of deployed navy ships to the black and baltic seas 14 times and increased training flights. we are using funds to increase our deterrence. that is detailed in my statement. nato has taken steps to reassure the allies.

these measures are defensive and proportionate and in line with our obligations. allies have agreed to measures as part of nato's readiness action plan that will improve the alliance long-term. it will ensure new security challenges. the defense ministers decided to enhance by creating a spearhead force. they will be able to deploy in very short notice. the task force consists of a land component of 5000 troops and air and air time operations forces. they aim to strengthen the defenses and ensure that nato has the right forces in the right place at the right time. we are providing support to ukraine as it deals with military and economic crises.

our security cooperation with ukraine dates back to 1992. the united states provides ukraine with education, military training, support for border control, communications. the corruption of the regime starved the armed services. the neglect of the armed forces did not strip them of their professionalism or determination to fight. since the beginning of the crisis, the united states has increased security in the ukraine. we have committed $118 million to training systems and national guard services. we will dedicate another $120 million for state department security programs. we have identified needs and priorities.

we continue to assess how to maximize the impact of our assistance. key areas include medical support and personal protective year. -- year -- we are also conducting continuing long-standing exercise such as rapid trident to increase interoperability for peace member nations. the most recent iteration included a multinational field training exercise, saw the participation of 15 countries and 3000 personnel. other measures remain under active consideration in the administration come enclosing a provision of additional security assistance. we are looking at all of our options, including the

possibility of lethal defensive weapons. we do not believe there is a military solution to the conflict in ukraine and we are working actively to some work -- support the diplomatic track. russia's aggressive actions are a threat to the bipartisan objective of american policy since the end of the cold war. the united states will continue to work closely with our ukrainian and european partners to counter these actions and provide reassurances to our nato allies. >> thank you for the opportunity to testify today on the u.s. government's actions to some work ukraine's economy. the objective of the u.s. and international economic assistance strategy towards ukraine has been to support the efforts of president poroshenko's government to stabilize, revitalize and restructure ukraine's economy.

my remarks will elaborate upon the strategy and its evolution over the last year in response to the conflict in eastern ukraine. there are efforts to mobilize the in international effort to support ukraine financially, couple mended -- complemented by the work of others at the treasury department. >> this assistance centered on a two-year $17 billion imf program and also included a $1 billion u.s. loan guarantee and $2.2 billion from the european union and the imf and other donors agreed that ukraine has lived up to its economic reform commitments made in exchange for this support. the ukraine government has initiated steps to reduce the deficit, improved targeting

social assistance, strengthen the rule of law to reduce corruption, increase transparency within the inefficient state of the energy company. this is the competence of approach to reform that you refer to. in support of these efforts, treasury advisers are providing the ukrainian government with technical assistance. this was always going to be a challenging program. unfortunately, the intensification of russian aggression has created significant additional pressure on ukraine's economy and necessitated further international support to bolster the government's reform efforts. during the past few months, we have mobilized the international community to increase the support package by $10 billion. the imf now plans to support ukraine through the end of 2018 with a larger gross financing package. allowing more time for the economy to adjust and for

economic reforms to bear fruit. the united states intends to provide a new $1 billion loan guarantee in the first half of 2015 provided ukraine remain on track with the reform track it agreed with the imf. if you can continues making progress, the u.s. and restoration will also be willing to consider providing an additional up to $1 billion loan guarantee in late 2015. the next step in further driving this augmented international assistance effort is to secure imf board approval on march 11 for the new imf program. to meet its reform requirements the ukrainian government has passed meaningful reform measures to improve public financing and reduce inefficient energy subsidies. provided the authority that here -- adhere to the reform program

the imf projects that ukraine's economy will respond in 2016 -- expand in 2016. in view of the inherent uncertainties, there continue to be risks. this year's intensification of the conflict as imposed severe damage on an already fragile economy. significant structural damage has occurred within ukraine's economy. amid these challenges come ukraine's ambitious reform agenda deserves our continued support. core u.s. global security interests are at stake in ukraine and providing economic supported ukrainian government is an essential part of our strategy to respond to russian aggression. as long as ukraine's government continues to undertake difficult reforms, the international community must do all it can to support to help ukraine succeed and be prepared to adapt its assistance strategy as required. the international community must

continue to ensure that as long as russia disregards its commitments and fuels violence and instability in ukraine, the cost for russia will continue to rise. as with all emerging-market crises come our assistance strategy is not without risk and the path to success not without obstacles. however, critical elements needed for success, and ambitious reform program committee government and country committed to change and a sizable international support package are currently in place. we will continue to work closely with our international partners to provide ukraine the support it needs, the strong backing of congress has been a critical foundation to these efforts and we look forward to working closely together in the months ahead. guest:>> thank you. we thank you all for being here.

i know in the past you have characterized what russia has done and ukraine as an invasion. does that still stand with you? >> we have used that term in the past. >> are you using that again today? >> i'm comfortable with that word. since russia >> since russia does not take knowledge the death of its soldiers publicly how many russian soldiers have been killed in ukraine as part of this conflict? >> it is pretty difficult to have a completely accurate assessment given russia's efforts to mask its dead. hundreds and hundreds. >> i thought the numbers were substantially higher than that. under 1000? >> i cannot speak to more than 500 at the moment. we will come back to you.

>> i know that you have been a strong advocate of support in ukraine. have been a good person for us to talk to by phone and here as a witness. what are the administration's positions -- what are our demands regarding their withdrawal from that area and about what timeline? >> as you know, we were extremely concerned to see the flattening after the signing of the agreement. it is outside of the special status territory, so it is territory that the government of ukraine did have control of. under the agreement, there is supposed to be a complete

withdrawal to the lines agreed in on september 19. >> we are demanding they leave? about what they? >> that is the position that called for and we c support them. >> what is the timeline they have to step back? >> the agreement, the implementation agreement of february 12 calls for the full pullback of heavy weapons and military equipment within some 16 days, we are already beyond that, but we are working on it. >> they are working on it? russia is working on it? >> we have seen in complete compliance in terms of access, including in complete compliance in terms of osc being able to

verify the pullback of separatist heavy weapons. when you get to the political face, to follow this, the political jurisdiction does not include the town. if the separatists comply, they should be not insisting on having political control of that area. >> we appreciate you coming here today and sitting on that side. secretary carter and our joint chief dempsey have both talked about the fact that they would like to see defensive weaponry. they have advocated for that. we have passed that unanimously out of both houses. it passed the senate and came out of the house. there seems to be debate within the administration and the

german ambassador thinks the president has made quite commitments that we are not going to do that. what is the status of this debate within the administration where we are getting mixed signals and confused by the stance the administration is taking? >> i cannot speak to what happened in the meeting between the president and chancellor merkel. >> can you speak to where we are in this debate? >> it probably will not be a satisfying answer. we are working on reviewing a number of options, including lethal defensive weapons. i can give you a timetable -- can't give you a timetable. >> you mentioned the $118 million in other kinds of assistance. it is my understanding we committed 120 million and only delivered half of that. is that correct? >> correct. >> this feels like three years

ago, the syrian opposition where we were going to help and do all these things, delivery trucks, they got their way beyond their usefulness. what is happening? she speaks strongly, we see her in munich we thank her for that and the administration doesn't do what it said it will do. what is going on with the administration? it is incredibly frustrating for all of us who think the administration supports ukraine but it seems like they are playing footsie with russia. i'm wondering if you could speak clearly to what is happening. >> we share your frustration about the speed of the delivery of our commitments and the new secretary has pressed us on this. he said to us, let's start a new policy. let's not promise assistance until we can deliver quickly. >> what would keep us from

delivering $118 million worth of nonlethal assistance? >> finding it in the stocks of the u.s. military, purchasing it off the production line. the head of our agency has made this a high priority and we are pushing him all the time. in the case of counter mortar radar, it's a good example. we got approval in late october and got them delivered, trained and fielded within two months. we are able to move quickly in some instances and other instances it is acceptable to slow but we are making a top priority. >> we know this is not your decision and we appreciate you being the messenger. russia has invaded ukraine. we agreed to protect their territorial sovereignty in 1990

or and the give up -- in 1994 and we agreed to protect that. as russia has invaded, we are still not willing to give defensive weapons. why do you think that is the case? why would we be so backless? be unwilling to give them the kind of defensive weaponry they can utilize. what would be your impression of our inability to make that happen? >> we have provided some significant defensive systems including the radars which have saved lives in ukraine. we have not answered the entire shopping list from the ukrainians.

there are a lot of factors that go into that. we are continuing to look at the situation on the ground and the needs and limitation as we evaluate this going forward. >> we have also dropped back from training the ukrainian national guard and put that on hold. can you briefly tell me why that is the case? >> as you know, we have notified to your committee about a program of training for the national guard. we have never had a decision on the final timing and scope of it . we had talked about doing it this month but it is still under consideration. >> pretty evident we are not going to do much. pretty evident the strong statements we have made our statements and i will close -- i will just say, thank you for your presentation. i do hope we are committed to

providing the financial assistance necessary to keep ukraine afloat. i hope that the greatest victory for pollutanutin -- his greatest victory would be for ukraine to fall and him not to have two on it by break it -- i hope we are committed. others may ask you questions about how much we are committed. you are messengers and not making these decisions. >> thanks for the promotion. let me say -- i'm not quite sure

why we cannot move ahead. the former national security advisor, former secretary of state both testified before the senate armed services committee that the u.s. should provide defensive weapons to ukraine. when asked about providing such weapons to ukraine, asked carter -- ash carter said we have to help ukraine defend itself. in order to provide the necessary muscle for a diplomatic solution. the chairman of the joints chief of staff have suggested the same . are they all wrong? >> i take it that is a question to me? >> either you or -- the

secretary of the defense department. whoever wants to take it. you have an overwhelming view from a wide spectrum. i don't get it. are they all wrong and if so why are they wrong? >> as the discussion on the subject has taught us, there are factors on both sides and we are continuing to evaluate. from where we sit at the state department, if we can see these agreements implemented and can see peace in eastern ukraine that offers the best hope for the ukrainian people. >> lets stop there. it only went ahead and largely incorporated more territory that the rebels had taken since the

first agreement and made the boundary lines to ensure less capable of being pursued because it is all dependent upon some votes on decentralization of the government. there have been about a thousand violations? >> i can give you a precise figure. >> 1000 violations since the cease-fire. we keep working on this aspirational basis while russia works effectively to take more ukrainian land. there is not enough money in the world to be able to help the ukrainians sustain themselves if they continue to bleed because of the conflicts russia has created and still stokes in eastern ukraine.

so much for our statements that we are not willing to forgive the fact that crimea is gone. i don't get it. i don't know how much the process is going to wait. according to the law the administration is supposed to report on its plan for increasing military assistance to the government of ukraine. it was close to have done that by pay very 15th. -- henry 15th. when can we expect this to be submitted echo >>? >> we are continuing to work on some of the program at issues we want to reflect in these reports. including those that flow from our 2015 budget. we are hoping to have them up to you in the coming weeks if not

coming days. >> welcome back to the committee. on december 10 coming you testified before the armed services subcommittee that the u.s. was considering a variety of military responses to russia's violation of the treaty . among the responses, you outlined the placement of u.s. ground launch cruise missiles in europe. can you further elaborate on the military response is the administration is considering to russia's violation and how nato allies have reacted to the suggestion? >> on last issue, where i talked about that in the hearing, it was in the hypothetical sense. it would not be in compliance with the treaty.

i had put that out there is something we could do if we chose to come out of the training. what we are looking at in terms of options and countermeasures some of which are complying with the treaty, some of which would not be, i can describe a range of things in different buckets -- one would be defenses of nato sites. second would be a counterforce capability to prevent attacks. third would be strike tip of the leased to go after other russian targets. we are looking at a range of things. we are trained to persuade russia to come back into compliance with the treaty. >> so far, we have not succeeded

in getting them back into compliance. >> correct. >> at the height of the protests in december of 2013, russia extended a $3 billion bond an attempt to keep the president in power. he fled the country with unknown millions. given the exorbitant terms of the bond, russia can demand immediate repayment in full and if ukraine refuses to pay, it would trigger default on all ukrainian debt. that is an economic weapon. in 2003, the u.s. and eu adopted in their legal systems un security council resolution 1483 which made iraqi oil and gas assets immune to seizure by private creditors. the u.k. parliament could in at

-- an act legislation under english law. if russia refuses to reschedule payments on the bond or reclassified as a government to government debt, has the administration engaged with the british government on the possibility of denying enforcement of the bond under british law? >> you touched on a few points. let me touch on a few aspects that are relevant. russia has not asked for or demanded acceleration of this payment. the ukrainian government in the context of its imf program has indicated it intends to discuss with creditors, which would include russia, the rescheduling of obligations falling due.

primarily within the scope of the imf program. that would include this russian $3 billion. those discussions are only beginning with what we anticipate will be the approval of the imf program tomorrow. let me also mention that treasury specifically -- is cooperating with the ukrainian authorities on the other issue you mentioned, the recovery of assets. that meant with them -- went missing with the departure of the previous regime. we are looking at the issue you mentioned should that eventuality arise. right now, russia has not accelerated this claim. this claim is going to be subject to the discussions between the ukrainian government and its creditors. >> i hope we don't wait until

russia pulls the trigger. if it's all too late in the process of doing what is necessary to create appropriate protection under international law may be too late -- it seems to me there is no harm in having a discussion to be poised for that possibility so that we are not on the back end of trying to play catch-up law. >> summed her gardener -- senator gardener? >> thank you to the witnesses for -- i want to talk briefly about the comments that were made last week at a hearing the committee held with witnesses. when i asked the president about his role with ukraine, talking

about the promises he believes have been made by the united states to ukraine and whether or not we had met those promises the answer was clearly he did not feel we had lived up to all that we had promised. the park in the united states had entered into in terms of promises of our commitment to them. you stated that the united states must keep faith with ukraine. how do you mesh his believe in your statement that we have kept faith with the people of ukraine? >> i cannot speak to how a former georgian president comes to his conclusion. this congress has been an normatively generous -- enormously generous going above and beyond in some cases, the

requests we have made. we have more money for ukraine then we asked for. what we have been trying to do both through the loan guarantee program and through the bilateral assistance i outlined in some detail is to try to support the implementation of these very tough reforms the ukrainians are making and we will continue to do that. we have fielded a huge number of technical advisors into the implementation. the numbers are significant compared to previous support for ukraine. we want to see it move faster. >> i believe this question is more appropriate to mr. mckeown. you mentioned in your comments ap articles, german ambassador, president obama agreed not to send arms to ukraine.

what is the current posture on lethal assistance to ukraine? >> we are still reviewing it. it is still an option. >> when do you believe this review will be completed? >> i hope soon. i cannot put a timetable on it. >> days, weeks, months? >> i hesitate to predict. >> what has your conversation been with ukraine leadership regarding this assistance? >> conversations go on all the time. my former boss, the vice president has put the president on speed dial. he talks to them once a week, it seems. i don't know the latest of what he has said to them on this issue. in general, they are getting the same information i'm giving you. it is under consideration . >> they would say the same thing to you as well?

they don't know when this assistance -- >> that is correct. they have made that request and interests known. no doubt about that. >> when we are talking about the cease-fire and the russian act offensive -- backed offensive in your reports, how much time do we have before putin renews his push and to ukraine? -- into ukraine? mr. mckeown? >> getting inside resident pollutants had this president -- president putin's head is an ongoing effort. they continue to operate in eastern ukraine.

fighting alongside the separatists. they are moving military equipment and they are still -- when they may make another move, i don't think anybody can say. >> you mentioned the sanctions. what are we doing right now in terms of the european union, the government, those nations that have been opposed to traditional sanctions? what have we been doing to talk to them about the steps needed for additional sanctions? >> despite some publicly stated concerns, those countries have supported sanctions when the leaders come together. we continue to talk to them bilaterally about these issues. i will make another trip to those countries in the coming days and weeks.

we are working with the commission to continue to design sanctions that if we needed to use them and they need to be applied in deterrent or actual -- have more effect on russia than the european economy, that is part of the conversation we have. >> does the administration support spelling russia from the financial system -- expelling russia from the financial system? >> the framework we evaluate all potential actions is basically the impact they would have on russia and the russian economy against the spillover blowback's that would occur to the united states and partners in europe. without commenting on specific actions, that would be the prism. >> you have discussed this action with the european counterparts?

>> we have discussed a range of options for further sanctions. >> we also talked about the length of time it would take for nato to train a ukrainian military that could just send -- could successfully defend his country. how long would it take? >> depends on the type of training and scope of training and how many units. the training the chairman asked me about is being looked at for the national guard forces. it would be over the course of six months. it was five or six companies or italians -- battalions. if we were to train all of their military come over 100,000 people, that would take a much longer period of time. >> secretary shaheen?

>> we are all getting promotions today. thank you. thank you to all of our witnesses for being here today. i want to begin by sharing the frustration we have heard from other members of this committee about the slowness with which we are providing assistance to ukraine. on the weapons aside not just about the decision which aims to be taking a lot of time but the other form of assistance that would be helpful to the ukrainian military. -- seems to be taking a

lot of time. i had the opportunity to meet with representatives of ukraine. one of the things they talked about was -- i got into a back and forth with them about the reservations that have been expressed by this administration and chancellor merkel and other europeans about providing weapons and the extent to which that might at slate -- as click the conflict. they set a couple of things that resonated with me. they were not sure that the conflict could be escalated to much worse than they expected to be. there was a real symbolic impact should we provide offensive weapons that would have a real morale boost on the military and the people of ukraine. in our analysis of the pros and

cons of providing defensive assistance, do we disagree with that assessment that there would be a symbolic impact to providing that help? >> all of our assistance to the ukrainians is providing not just symbolic but real assistance. to support their government across the board, economic and security assistance. i'm not going to deny any assistance would be of importance. what i can say about what we have already provided and committed, it is meeting real military needs. their forces were stripped by the corruption of the

former regime. >> i am not disagreeing with that at all. i'm expressing my frustration with the timeliness of providing that assistance and a decision about whether people that should we will provide defensive assistance. we think there is a point at which chancellor merkel would feel like the agreement has failed and that an effort to find a peaceful resolution to the conflict has failed and therefore we may need to think about other steps? >> we are in intense conversation with our allies about a common standard for measuring implementation and making sure the osc gives us all

a clear picture of where the cease-fire is holding and where it is not. where weapons are being pulled back so we can measure it we have talked with european allies about two things. not only seeing those things implemented, but also the danger of any future land grab, which is why i shouted out this village. there is now this third concern the continued resupply over the border, which is not compatible with the spirit or letter -- we need to watch all those things together. sanctions will have to increase in pressure will have to increase. >> as i know you all know, there was a european subcommittee hearing last week on ukraine. one of the concerns expressed was about the economic

assistance. if the economy of ukraine fails a resolution of the conflict probably is movot. one concern we discussed with the ability of the ukrainian people to continue to support the reforms, i'm wondering if you could speak to that. >> thank you, senator. this is a real concern for ukraine's leaders, whether they are in the executive -- the kinds of intensive changes to the structure of the economy are going to have impacts in people's pocketbooks and people's lives. this is why we are working so hard with the imf that as

ukraine takes these tough measures, the support comes in quickly so that the economy can stabilize and investment can come back and the people can see a light at the end of the tunnel. we have to get ukraine growing again. >> one of the other things mentioned at last week's hearing , the concern that putin might try to test the article five of nato countries. can what kind of steps are we taking to determine putin? -- thatdeter putin? >> nato has enacted some reassurance measures which include increasing air ground and sea forces in the eastern

parts of europe. they are adapting their force structure with a task force, stepping up integration units. these all come out of the wales conference and nato is moving forward with that. the eri is authorized by the congress -- >> thank you, mr. chairman. >> thank you, mr. chairman. i want to echo the frustration you are hearing this morning. because of the administration we are in an era where our allies don't trust us and our enemies to appear us. ukraine gave up 1000 nuclear weapons on the assurance that

their national security would be protected. last september, the president promised to help ukraine buildup and effective security force to defend themselves against aggression. here we are talking about more delays to that support. a former u.s. ambassador to nato has written that this new cease-fire leads to a frozen conflict inside ukraine. this is exactly what the kremlin wants. do you think putin's objective is to create a frozen conflict against the georgia -- like inside of georgia? >> his objective is to keep ukraine destabilized so it does not join the west.

he is threatened by progressive democracies. he is trying everything he can to prevent that from happening. in response as secretary mckeon has pointed out, he has implemented a wide array of initiatives focused on generating pressure to try to force the russians to stop this behavior and respect the territorial integrity of ukraine. >> from a strategic perspective russia has kidnapped and estonian intelligence officer. forcing sweden to reroute a civilian airliner to prevent collision with a military jet. sent unannounced formations of military aircraft into our airspace. do you believe putin's

strategy is to undermine nato's credibility? >> he would like to undermine the nato alliance and we are working hard to communicate to him the solidarity of the alliance taking these steps to illustrate that solidarity. >> can you talk about what is being done by nato and east area latvia and lithuania in regard to that? >> the reassurance measures being taken to include -- it include rotating forces through the baltic states, in glade engage in those states and facilitating additional aircraft being stationed in those countries. ships are in the baltic and black seas. all of this is designed to

bolster and underlined the article five commitments. >> we have said -- all four of you have said that the solution is diplomatic, economic and military. my question is on the sanctions. they don't have a consumer economy. they have an energy economy. their banking sector can be hit and their military arms manufacturing sector. can you speak about what needs to be done from a sanctions perspective that can get his attention at this point? >> thank you for that question. the sectors he mentioned have been targeted through the sanctions. the defense sector and financial sector have been subject not only to sect oral sanctions --

sect orielsectoral sanctions. in the defense sector, there have been individual companies listed subject to asset freezes. they are part of the reason why the sanctions have had the effect they have had on the russian economy with the currency depreciating by more than 40%, the economy expected to contract this year, inflation rising to over 17%. those sectors are very important and have been part of our tailored sanctions program and these are the effects we have seen. >> thank you, mr. chairman. >> senator murphy? >> thank you to the panel for being here today. senator mccain was in connecticut yesterday and we held a town hall meeting with

the ukrainian american population and we had an overflow crowd, probably around 400 people. they raised some of the similar concerns raised here today but also expressed real and heartfelt appreciation for the fact that if it were not for the leadership of the united states rallying the international community if it wasn't for our leadership on rallying the international community towards a policy of sanctions this story would have played out in a different way. this is a dire situation in ukraine today. many people understand what we have done thus far and its importance to continue -- i want to talk about some of the concerns many of us have about a policy of providing defensive

arms. first is this question of what the budapest memorandum obligates the united states to do. already today, i have heard my colleagues talk about the budapest memorandum obligating the united states to defend or obligating nato to defend ukraine from a territorial attack. it is important for us to know exactly what we are obligated to do when we sign these international agreements. maybe i will post this question to you, secretary . it obligates each country to respect the territorial integrity of ukraine but is not a mutual defense treaty, does not obligate any of those countries to defend ukraine.

it is not comparable to article five. it is important for us to understand if that is the case. >> as a native connecticut girl, i'm glad to see the connecticut ukraine americans are active in support of ukraine. i was part of the negotiating team that work on the budapest memorandum. it was a political agreement among the four signatories notably the united states come u.k., russian federation and ukraine to respect the territorial integrity of ukraine , not to attack her. it did not have legally binding treaty force or legally binding national defense obligations. that said, it is russia that has miley did the spirit -- violated the spirit of that agreement. >> i want to talk about how

circumstances on the ground would play out in the effect that we decide to give substantial defensive weapons to the ukrainians. the supposition is that putin is not paying a high enough price and the price you would pay in greater numbers of lives lost that he would not be able to cloak in secrecy with changes calculus. -- would change his calculus. it is a chance and there is also significanct chance that is not how things will go. he will continue his march straight through the lines we have fortified. i don't know if you are to this point in terms of your thinking or the proposals you have been making to the president and secretary. what would we do in the event

that we provided a certain level of defensive weaponry putin moved straight through the lines that we supplied? would we be in the position to have to send additional supplies , additional weapons? how does this play out in the case that it doesn't go the way we hope it goes whereby putin pays a bigger price, stops his aggression or comes to the table? what happens if that does not work? >> without getting into the specifics of the internal debate , you have put your finger on the conundrum. from the beginning of this crisis, we have looked at ways to increase costs on president putin to deter further aggression and change his calculus. that is part of the thinking that goes into weighing whether additional weapons including

lethal defensive would achieve that. does this raised the ante? i don't want to say does this provoking because he has that he doesn't need any provoking. what would ukraine feel that the united states owes them in terms of additional assistance? it is trying to see down the field to the third and fourth move on this chessboard. >> i don't buy this argument that supplying ukraine with defensive weapons will provoke prudent. he has a plan that he will carry out. i just want to make sure and i think you were suggesting you are having these conversations we are playing this out not to step one but step two and three and or four.

speak to us about the greater challenge here. we are seeing the tip of the iceberg when it comes to the tools that russia is using. our government is vastly under resourced to try to prevent the next ukraine from occurring. at the same time we are debating the assistance we should be giving to ukraine, we need to be having a discussion about how we resource state and defense to help these other countries we are talking about, the baltics, the balkans, although georgia to make sure this is the last crisis of this proportion we face in the region. >> thank you for your attention. in addition to the security challenges, not only the

challenges and ukraine and the other keeper periphery states like moldova and georgia and the alliance it feltself, there are all sorts of asymmetric challenges. the use of energy as a weapon come original cars us to work more intensively with the eu on energy diversification. we would like to be able to do more to help bulgaria, hungary and croatia. we are doing a lot together with the eu. things like use of corruption as a tool to undermine sovereignty, whether you are talking about directly paying political candidates are just ensuring

there is enough dirty money in the system to undercut democratic institutions or to make individual political actors vulnerable to outside pressure. we are working with countries to expose that and to close the corruption in their system. the propaganda which is not simply what you see in terms of news, but also under the table efforts to some or that support -- efforts that support -- there is a lot to focus on particularly in the balkans where they are at risk, but also in allied territory. >> i do want to say that

countries watching, the last exchange, from a person who helped write the budapest agreement, apparently it was a superficial agreement, only a political agreement. i would say that countries watching that last exchange would be pretty reticent to come to any agreement with the united states, the u.k. and russia regarding nuclear arms. that last exchange would be a major setback to anyone who thought we were ever serious about an agreement relative to nuclear proliferation. >> the answer to that question is not reassure the allies, one of the phrases i heard in the testimony.

the hearing we had last week in our european subcommittee -- i called that hearing to try to lay out and describe the story of what russia has become under vladimir putin. i would refer you to my opening remarks were we laid out a timeline. 29 political assassinations. we saw the assassination of boris -- gary kasparov -- we have talked about the objectives of the vladimir putin. he rebuilt the police state in russia in full view of the world and is confident in his power to export that police state of broad. -- police state of brabroad.

only this with an immediate action can stop ptuutin's strategy to -- do you agree that is what vladimir putin is trying to do? if you don't agree, what is his strategy and overall goal? >> i certainly agree with the way he characterized his motive earlier in this hearing. he is looking to keep countries in the former soviet space under his political and economic control. he is looking to roll back the gains of europe. which is why all the things we're talking about here whether it's ally reinsurance making sure where we do have treaty c commitments

that every millimeter of spaces defended. also to help strengthen and provide more resilience. >> earlier in his aggression against ukraine, i heard a number of officials saying that we are offering an offramp to vladimir putin. does anybody on the panel believe that he is looking for an offramp? he is simply looking for on ramps. anybody want to dispute that? >> i don't know that i would call it an offramp. there was a point earlier in the crisis were he arguably was trying to keep ukraine out of the west and keep it in 80 stabilize the situation. whether he seeks to go further and ukraine, i cannot say.

-- and keep it destabilized. >> according to the the ukrainian authorities and the potomac institute are currently, 14,400 russian troops on ukrainian territory backing up the 29,000 eagle legally armed separatists. -- illegally armed separatists. there are hundreds of pieces of two and rocket artillery. there are 29,400 russian troops in crimera and 5500 along the border. is this the administration's assessment of what russian troop strength is in crimera and ukraine?

collect senator johnson, without going into the specifics of the intelligence on the number of russians in eastern ukraine i -- he changes from week to week. -- >> senator johnson without going into specifics of the intelligence, on the number of russians in eastern ukraine, it changes from week to week. >> you are not saying that this is an accurate? >> i cannot say that the number is exactly right in terms of 14,000. in terms of the numbers on the border. there are 11 russian tactical battalion groups. >>'s they were concerned about a potential spring offensive by russia.

secretary newland, you talked about them moving additional heavy equipment into russia. isn't that a bit concerned? -- a big concern? >> that is why we are seeking the greatest deal of fidelity as to whether this is being implemented so it can give us an accurate picture. that is why we are here calling out some of the specific concerns that we have, whether it is about the rearming that we have seen in the last couple of days, whether it is the continued firing in strategically important villages. if things pull back, that will allow space for politics to begin in eastern ukraine. if not, we have to be prepared to have more sanctions and pressure on russia. crocs i would>> i would argue that

sanctions haven't worked. the comment was made that as russia becomes weaker economically, they become more dangerous. i kind of agree with that assessment which is why i believe we have to provide a military response, lethal defensive weaponry. he was there on the front lines when russia invaded jordan. the bush and ministration, setting and supplies. without russia really not knowing what was on the cargo plane. certainly one of the factors in causing russia to stop further expansion into georgia. so, shaka spewing said that appointments from the far east are proof that the kremlin is

rise to the -- they have a very thin later of tolerance for human casualties. if heif we would show some resolve, respond to president poroshenko's plea. they will provide the boots on the ground to fight vladimir putin's aggression but they cannot would with blankets. -- do it with blankets. >> i think all of our witnesses. there is no question, there is some consensus that the united states needs to do more to help the ukraine defend themselves. i just want to make that clear from the beginning, the ukrainians need defensive support so they can defend themselves as far as weapons are

concerned. this committee has spoken and many of us have voiced this. this committee has been pretty clear about our position in this regard. it is clear that we need to take strong action against russia. the tragic assassination of boris nemtsov points out how extreme the putin regime has gotten. what we can do, madam secretary and i would urge you to look at this. he exposed individual gross appropriations of russian rights. let us not forget nadia --who

was taken from ukraine i russia. there is continued efforts and the russian violations of the agreements including the cease-fire, i'm pleased to see you are looking at additional sanctions. understand that it will take u.s. leadership. if we wait for europe to act, it will not be effective. we have to be out there with our european partners, but it will require u.s. leadership. i want to change years, if i might. we have had a lot of questioning on the defensive issues. my assessment from visiting key of was that what happens in the protests of their, it was as much about basic rights and political rights. we have to make sure that they

have been effective government with the institutions to protect the rights of all of the citizens to express their views and to be treated fairly, free from corruption, as well as economic opportunities that that country should be able to provide for its citizens. i know that the imf originally made a commitment in 2014, i think it was $17 billion, four and a half billion was released. they have a new commitment that the injured into february this year. the united states has provided some direct assistance. how confident are you that the ukrainian government is moving towards the development of institutions critical for democracy to flourish and how successful they are on their path for economic reforms? >> i cannot agree more that what we saw reflects the desire of

the ukrainian people for a better life including a better economic life. i think that one reason that we have been successful in mobilizing such a large international financial assistance for ukraine is because the actions that the government has taken reflects a decisive rate from the past. their willingness to address subsidies and inefficiencies for their government spending. all of these are actions that the ukrainian government has put forward, not that the financial institutions have imposed on ukraine when secretary lou and

myself have visited ukraine in the last couple of months, the departure from the past practices of ukrainian governments couldn't be more evident. so, our responsibility is to ensure that the international community and the united states as part of the international committee is doing everything it can to support this reform agenda that the ukrainian government has embraced and has been embraced by huge legislative majorities with the recently elected ukrainian parliament. >> is there more that the united states should be doing? >> we think we have the right package right now. we are satisfied with the imf package. as we know, the u.s. has provided a $1 billion loan guarantee for ukraine last year they will attempt to provide another one in the first half of

this year and working with congress, they consider another $1 billion loan guarantee at the end of this year, so we appreciate congressional support for that. we have had europe and other bilateral donors increase their assistance to ukraine in recent months. that is something that the senior officials within the treasury as well as the state department have worked on and we'll continue to work on. we think that this government merits continued support not only from the united states but other countries in the international situation. >> this must support account ability and progress being made into the governance issues. we will be patient they must demonstrate their ability to carry out their verbal

commitment. i would ask one last question and an assessment of the mission. >> thank you for your work. this is a tool of foreign policy and of european policy that was underutilized. without the eyes and ears of the osce, i would not have been able to give the rundown of where things are going well and where things are going poorly in the ukraine at the beginning of this hearing. they are an unarmed force. they can only operate in a permissive environment. that is one of the challenges that they have, whether it was getting into secure the crash site or whether it is now

working in separately withheld areas to get the kind of access that they need. that is what we have to continue to work on. we are trying to work now with european partners to make sure that every nation carries its weight in terms of fielding monitors, in terms of paying the budget increases that this requires, but also in terms of the specialized skills. we now need monitors who know the difference between annex kind of artillery piece and a smart rocket and that kind of thing. >> the chairman and i were in a private meeting this morning so i cannot quote by name the individual but it is a very well-respected journalist and commentator in america who as asked questions, the greatest threat of u.s. security. they directly cited the threat

of cutin as the biggest threat to the u.s. and the world. >> i would defer to the ic in their judgment of the current threats to united states security in terms of the terrorist threat. we are certainly worried about the negative trend with russia and what it is doing not just in ukraine but along europe's borders and the core of the reason we have taken a lot of the reinsurance measures we have and thinking hard about making sure that the alliance commitment can be met, not just through the united states but through all of our nato partners.

>> traditionally, a degree of threat is defined as capability and intent. the russians are world-class state with a world-class military. with intent, it makes it important that we do the kind of initiatives that we talk about this morning, too to try to minimize the risk. >> one of the benefits of old age is you have memories of life. i have memories of the u.s. cuban crisis and what kennedy did in response. and the potential of what is going on in the ukraine. finally, president kennedy put a blockade around cuba and called khrushchev possible off. i don't think we are at that

place yet by any stretch of the imagination but you spend a lot of your careers looking into the future and saying, what if. what senator johnson was saying, what if things get worse, we need to be prepared to have the same kind of response to match the threat with the force necessary to support that threat. in my right or wrong? >> senator, at the department of defense, we are always worried about the threats right in front of us and also the threats of the future and we do a lot of planning to look out ahead and the military monitors nation of russia and its activities in central europe have no doubt got the mind focused on looking ahead at various permutations of what russia might do. this is definitely an area of concern and we are giving a lot of thought and attention to. >> i know you have to be careful in your answer and i respect that and understand that but i think it is a fair enough

comparison to underscore the need that the committee feels in its entirety for us to look down at possible calculations down the line and be prepared confront power with power and threat with threat. admiral. >> readiness is absolutely key to deterrence. it is fundamental to what we do and it is coupled to, as the secretary has said, alliance solidarity. those are the best way to ensure stability and security. >> secretary nolan, i want to ask you a question for my own edification. would you consider russia's use of infinite supply of oil soft power? >> certainly, it's use of energy as a weapon. i don't know if i would call it soft but it is certainly a tool of its influence? looks this is not a loaded

question. but had there been a counterbalance to the supply in petroleum and gas that russia could supply in that part of the world? could that have forwarded what they have done? >> well, i think that their interest in controlling supplies of energy to europe is a factor there were many other factors in play in russia's decision that it made. >> an alternative supply would have made possibly difference in how far russia went? >> i'm not trying to bait you. >> i think if ukraine had been able to be more energy independent earlier it would have had more resilience and it would have had more ability to resist and that is one of the reasons why we are putting so much effort now into energy diverse, energy security for

ukraine as well as for the rest of europe. >> it is important for us to understand that the national defense interest of developing all petroleum resources we can in the u.s., we have control to kind of balance with the russians are able to do in russia. thank you for your time and interest. >> thank you. >> mr. chairman, thanks to witnesses. i want to pick up on where senator isakson picked off and i have some questions. i've been a strong supporter of the economic sanctions against russia and i understand there has been early questions about the possibility of more sanctions in the energy sector. it seems that this is the tool that russia uses most. whether it is sanctions or helping nations that over rely on russia to have alternate sources of energy or develop their own sources, these are shy gza strongly support.

senator johnson made a comment repeating some comments from a hearing last week and i am curious. to the extent that we are more successful on economic sanctions, to the extent that it extended time of low oil prices puts economic pressure on russia, there was some testimony that that makes russia more dangerous militarily and i would be curious as to your thoughts on that, i'm a supporter of sanctions and energy pressure, but does that raise the risk of unpredictable military behavior? >> i don't know that it raises the risk or makes russia more dangerous, it is hard to understand the provocations and actions and dangers to the actions that president cuban has already taken. he will face some hard economic choices if oil prices stay down and the ruble continues in the

direction it is going. he has a big investment. he will have to make some hard choices if he continues to sustain those investments. he will have to weigh that in terms of his internal politics. i know it is not exactly a democracy but he does have to pay attention to what is going on in the country and the public attitudes. >> any different positions? this is not something we should be overly concerned about if we decide to do more sanctions in the energy sector or take steps to help ukraine and other nations diversify their energy portfolio? let me ask about the questions or this issue of the internal russian dynamic. we have given a lot of questions about how much the sanctions are having an effect, how the low oil prices are having an effect. we have seen statistics about capital outflow and about direct

investment, devaluation of the ruble. what is the best that you can tell me now in an unclassified setting about the combined effects of either sanctions on oil prices on the internal political dynamic in russia today? >> the assistant secretary has given you some of the facts and figures that this policy has wrought, not only russia's phone ability to the low oil prices because of their lack of economic diversification over the last 15 years but also as a result of sanctions. i think we have yet to see what the political impacts will be but we can clearly see from some of the statistics that russian kitchen tables are being hit now by these policy choices that the kremlin is making. when you hear the secretary talk

about inflation at 15%-17%. when we have statistics of skyrocketing food prices across the russian space, 20%-40% in some places. we know that average russians are having difficulties paying for apartments and cars. we see imports way down. that goes to the point that the kremlin has prioritized their international adventure over the quality of the life of their own people and at what point that has an a political effect, we will see. >> the question about where will oil prices be in a year. this is something we should be worried about. there are people that have to make that speculation. some of the productions that --

projections that the oil prices would stay the same. if we are a year and the oil prices have stated this historically low level, talk about what you would predict that you would see in terms of the internal russian economic dynamic and we can draw the line between that and likely political feelings. >> i think it is important to recognize that the economic outcomes that we have seen in russia have really been an interaction between what we have seen in oil and the impact of economic sanctions. higher oil prices would definitely be a positive for the russian economy. i think it is relevant to look at what both moody's and s&p have done to russia's credit rating. russia has been downgraded to junk for the first time since 2003-2004. the responsibility of agencies like moody's and s&p is not to react to what the oil price is today but to think about how

russia's economy is being managed, what the impact of sanctions is, and how that affects the russian government's ability to meet its obligations not only to foreign creditors but to its people. and so, i think if we saw higher oil prices, and i will not speculate on oil prices like you mentioned, but i think that even if we see oil prices rise, the combination of economic mismanagement and the impact of sanctions has cost the shadow on the russian economic aspects that is expected to persist and one manifestation of that is the decision of the rating agencies to designate russian debt as junk. >> thank you, mr. chair. i don't have any other questions. >> thank you all for being here. secretary newland, in your

statement, you outlined the goal as threefold. first, we want these, then political normalization, then a return to borders. the question i have is how realistic, and the hope that minsk would offer that promise with peace coming first as a precondition for all of these things. how realistic is that goal given the goals that putin has himself. i think the goal that putin has is not about the ukraine, it is but completely we the post-cold war, post soviet border in europe. it is not just about ukraine. in the context he was to weaken, divide, and force nato to fall apart. he has openly said that they believe that they need to establish a sphere of influence and not just throughout the former soviet space but also in former warsaw type packed

countries. this is just the excuse that he uses moving forward. the ultimate goal is to reorder the post soviet order in the region and to carve out for russia a strategic space for themselves, for influence. in light of that, why should we have any hope that these cease-fires were hold given that we know what his goals are? maybe, this is why there has been arguments that we should not go on sanctions alone because a good cause friction with the european union and split us with them. he might agree to a cease-fire to consolidate gains or to try to create a point of friction between hoping that we will jump out ahead of the europeans and create that. ultimately, his goal,

unquestionably is to completely rearrange the order in this area and carveout a russian sphere of influence. how is it realistic knowing that about him to think that he is ever going to allow stabilization to return to ukraine and if he will ever return back to the borders given that we know what their goal is. he's a criminal and a thug, he is also a determined one. so, why should i feel optimistic that there's any chance of that happening given the goal that he has now unless the cost benefit analysis changes for him? >> i will not dispute any of your analysis, i will simply say that minsk is a test for russia. russia signed it, the separatist signed it, it is also a choice for russia. if fully implemented, it would bring back sovereignty and territorial it integrity. now, we have to test.

as i said, the record is mixed and we have to be ready. both for the opportunity for success but also to impose more significant costs on russia with our european partners if minsk is violated. either because the agreement is not implemented or because there is a further landgrab, or because the separatists are further armed. >> what is wrong with laying out clearly exactly what we're going to do if that test fails? if this test fails, we will arm the ukrainians. by the way, as a sovereign country, ukraine has a right to defend itself against any aggression. in fact, we are trying to strengthen the writ of that government, part of that to provide for their own defense. we should be doing that anyways. is it the position of the ministration that we will lay out a clear picture about what

the specific sanctions will be and what specific military aid we will provide a fresh a fails? >> i think in my opening, i made clear that we are working with the europeans to map out the costs. we generally don't signals those in advance but we are prepared. with regard to security assistance, we are continuing to evaluate that based. >> continue work on denying access to russia the swift system? >> generally we don't discuss in a public forum any specific measures, but we discuss a whole range of things as we are evaluating it. we look at the impact it would have on russia as well as the spillover that would have on the global economy of the united states and of our european

partners, but i don't want to, than any specific action. the speaker pro tempore: the house will be in order. the chair lays before the house a communication from the speaker. the clerk: the speaker's rooms washington, d.c. march 10 2015. i hereby appoint the honorable andy harris to act as speaker pro tempore on this day. signed, john a. boehner, speaker of the house of representatives. the speaker pro tempore: the prayer will be offered by the guest chaplain, reverend scott siena, st. john the beloved catholic church in