Obama: New Round of Sanctions Doesn't Mean 'New Cold War'

European Union, United States make stand against Russia's support of rebel forces in Ukraine.
19:41 | 07/29/14

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Transcript for Obama: New Round of Sanctions Doesn't Mean 'New Cold War'
This is an ABC news special report. Crisis in you can break. Now reported George -- Good afternoon we're coming and they are right now because President Obama is about to make an announcement on the crisis in Ukraine. Almost two weeks -- -- separate is down that Malaysian passenger jet killing all 298 people on board. The fighting in Ukraine has escalated Russian troops are mobilize near the border Russian arms still flowing across it so today after mounting frustration. The European Union has impose tough new sanctions targeting key sectors of the Russian economy. Thanks defence and oil. This comes after some pushing from the United States -- Obama held a video conference call yesterday with his counterparts from Britain Germany Italy and France. ABC senior White House correspondent John Karl joins us now from the lightest and John until now. The Europeans have been reluctant to expanding sanctions now they seem to going even further than United States. That's right George the game changer here was the downing about Malaysian passenger jet twelve days ago there were 200 European citizens killed. In the bring it when that jet was brought down that changed the European view you remember the president the United States impose sanctions on Russia that -- before the downing of that yet. The Europeans at that point failed to go along. Now they are going even further although I would extract the president to announce new US sanctions which we are told are likely to come later today. Broader sanctions against Russia one other factor here George is what Russia has -- in the days since that jet went down. You have had investigators had their access blocked to the crash site you've had Russian artillery. For coming from Russian territory in the Ukraine and it continued flow of weapons to those pro Russian rebels and there's the president. Yes and United States also announcing today that the and they believe rush has violated. A major arms controls it. Agreement that has been in place for decades. President coming out. To the microphone at the south. -- In the Netherlands. Malaysia. Australia and countries around the world families are still. In shock over. Sudden and tragic loss of nearly 300. Loved ones. Some senselessly killed. When their civilian airliner was shot down over territory controlled by Russian backed separatists in Ukraine. These grieving families and their nations -- friends. And our allies. And -- our prayers and our outrage. The United States continues to do everything in our power. To help. Bring home their loved ones support the international investigation. And make sure justice is done. Cents a share down however. Russia and its proxies in Ukraine. Have failed to cooperate with the investigation and to take the opportunity to pursue. A diplomatic solution to the conflict in Ukraine. These Russian backed separatists have continued to interfere in the crash investigation. And to tamper with the evidence. They have continued. To shoot down Ukrainian aircraft in the region. And because of their actions. Scores of Ukrainian civilians continue to die needlessly every day. Meanwhile. Russia continues to support the separatists and encourage them and train them and arm them. Satellite images along with information we do classified in recent days. -- -- forces inside Russia have launched artillery strikes into Ukraine. Another major violation. Ukraine's sovereignty. And we have information that Russia. Continues to build up its own forces near the Ukrainian border. And that more Russian military equipment including artillery. Armored vehicles and air defense equipment has been transferred across the border to these separatists. Since the beginning of the crisis in Ukraine the United States has worked to build a strong international coalition to support Ukraine. Its sovereignty. Its territorial integrity. It's right determine its own destiny. And to increase the pressure on Russia for actions that have undermined Ukraine's sovereignty. Territorial integrity and -- ability to make its own decisions. The court backed coalition is the United States and our European -- In recent days I've continued to coordinate closely with our allies and our partners to ensure a unified response to shoot down. Of Malaysian airlines flight seventy. And Russia's continued arming of the separatists. Who have spoken several times with prime minister roots of the Netherlands and prime mister Abbott. Of Australia. Yesterday. I had a chance to speak with prime minister Cameron of the United Kingdom present loan of France chancellor Merkel of Germany and prime -- frenzy of Italy. We are united in our view that the situation in Ukraine ought to be resolved diplomatically. They sovereign independent Ukraine is no threat to Russian interests. We've also made it clear. As I have many times that if Russia continues. On its current path the cost on Russia will continue to grow. And today is a reminder that the United States means what it sets. We will rally the international community and standing up for the rights and freedom of people around the world. Today. And building on the measures we announced two weeks ago the United States is imposing new sanctions in key sectors of the Russian economy. -- -- Arms. And finance. Were blocking the exports of specific goods and technologies to the Russian energy sector. We're expanding our sanctions to more Russian banks and defense companies. There were formally suspending credit that encourages exports to Russia and financing for economic development projects in Russian. At the same time. The European Union is joining us in imposing major sanctions on Russia its most significant and wide ranging sanctions today. In the financial sector -- -- was cutting off certain financing to state owned banks in Russian. In the energy sector of the U -- stop exporting specific goods and technologies to -- Which will make it more difficult for Russia to develop its oil resources over the long term. In the defense sector of the U is prohibiting new arms imports and exports. -- halting the export of sensitive technology. To Russia its military users. And because work closely coordinating our actions with -- Europe the sanctions were announcing today will have an even bigger bite. Now Russia's actions in Ukraine and the sanctions -- we party imposed. Have made it a week Russian economy even -- Foreign investors already are increasingly staying away. Even before our actions today nearly 100 billion dollars in capital was expected to flee Russia. Russia's energy financial and defense sectors are feeling the pain. Projections for Russian economic growth are down to near zero. The major sanctions were announcing today will continue to ratchet up. The pressure on Russia including the cronies companies. That are supporting Russia's illegal actions in your -- In other words today. Russia is once again isolating itself from the international community. Setting back decades of genuine progress. And it doesn't have to come to this. It didn't have to come to us. It does not have to be this -- This is a choice that Russia. And President -- in particular. Has -- -- continues to be a better choice the choice of the escalation. The choice of joining the world in a diplomatic solution to this situation. -- in which Russia recognizes that it can be a good neighbor and trading partner. -- Ukraine even as Ukraine has also developing ties. -- Europe and other parts of the world. I'm gonna continue to gave President Putin as well as -- Portugal. And our European partners in pursuit of such a diplomatic solution. But it is important for Russia to understand that. Meanwhile we will continue to support the people of Ukraine who have elected a new president. Would deepen their ties with Europe in the United States. And that the path for a peaceful -- solution to this crisis involves recognizing. Of the sovereignty. The territorial integrity and the independence. Of the Ukrainian people. Today the people of Ukraine. I hope for seeing once again that the United States keeps -- work. We're gonna continue to -- the international community and our support for the Ukrainian people. And for the peace and security in the freedom. That they very richly deserve. Thanks very much -- old course there -- no it's on the Cold War what it is is a very specific. Issue related to Russia's unwillingness to recognize that Ukraine can chart its own path. And I think that. If you listen to -- present Portugal. If you listen to of the Ukrainian people they've consistently said they -- Good relations with Russia what they can't accept is Russia arming. -- us. We're carrying out terribly destructive activities. Inside of Ukraine. Thereby undermining. Ability of Ukraine to govern itself. A peaceful. That's something that no country should have to accept. And the sooner the Russians recognize. That the best chance for them. To have. Influence inside of Ukraine is by being good neighbors. And maintaining trade and commerce. Rather than trying to dictate. Was -- you're -- of people conspire to. Rendering Ukraine and a vessel state to Russian. The sooner the present -- that Russia recognizes them the surgery can resolve this crisis in ways that doesn't result in the tragic loss of life. -- -- we've seen in the eastern for. I yeah. Arsenic. And quite -- -- -- break we'll keep in mind the issue at this point is not. The Ukrainian capacity to. -- fight separatists. They are better armed than the separatists. The issue is how do we prevent. Bloodshed. In. In eastern Ukraine we're trying to avoid that. And the main tool but we have. To influence Russian behavior at this point as the impact it is having on its economy the fact that we've seen Europeans. Who. They have real legitimate. Economic concerns. In severing a certain ties Russia stepping up. The way they have today. I think is an indication of the waning patience in Europe as -- nice words from President -- that are not matched by actions. But also recognition. As consequence of what happened what the Croatian airlines flight. That is. It is hard to avoid. The spillover of what's happening in your -- impacted. Europeans across the board and so. We think that the the combination of stronger US and European sanctions. Is gonna have a greater impact on the Russian economy that we've seen so far. Obviously we can't. In the end. Make. You know President -- C. More clearly. You know ultimately got something that present rudeness derived on his -- -- bowl weekend there was make sure that we've increased costs. Four actions that I think -- not only destructive you -- that ultimately. Are going to be destructive Russia's -- The -- attempt to -- secretary -- President Obama heading to Marine One there is -- -- Walter Reed hospital after announcing new sanctions on Russia targeting their energy arms and financial sector matching. When Europeans have also announced. Today he says he wants a unified response from the world. To the downing of flight seventeen in the continued Russian escalation. On the border of Ukraine I want to go to our chief foreign correspondent -- rain is in Jerusalem now covering. The Middle East crisis but since spent several days in Ukraine after the downing of flight seventeen and and Terry the president -- -- key question. Right there are stepping up the sanctions but so far. Russian president Vladimir Putin has been impervious to these sanctions the big question will these ones work -- Plays absolutely been defiant so far -- a few weeks ago however it looked like. He was looking for a way out. What happened in the interim was not just the downing of the Malaysian flight. But the Ukrainian army is now closing in on those rebels tightening the noose and it looks like they could win and so -- reversed himself. He has staked an enormous amount George of his own personal prestige with his own people and of Russia's strategic position. On taking. Ukraine away from the west keeping some control over and getting those rebels in power he can't lose he's looking for a way out. But he can't live and as you point that the shelling in the separate its expanded today okay Carolyn thanks very much. And -- significant thing that the president announced was not just that the new sanctions by the United States far broader than earnings announced previously. But what he talked about was the fact that the Europeans are going -- long -- this earlier today. The European Union announced broad new sanctions against Russia something -- -- -- actually resisted. -- in in the previous months but now seem to be going along Terry Moran you divide been following the story as closely as anybody. The these the European union of course has extensive trade with Russia which is something the United States doesn't have. What this was a big step for the European Union. You can credit Chancellor Angela Merkel of Germany who decided to take a top line with -- early on she gave up. Her aides said on persuading him and so has now brought other European allies along President Obama pressuring them as well defined. Some common ground where they can sink teeth. It into the Russian economy through these sanctions and they will do so. Make no mistake about it the notion that Europeans are aren't tough enough. To do this they demonstrated today that they are willing to take losses themselves in their own economies finance is huge in London. France has major military contracts with Russia Germany depends on its gas and finances well. And they have decided to sacrifice some of that because they are furious about the Malaysian airline -- And because they recognize that Vladimir Putin is making a war in Europe something they thought. That they were done -- many decades ago. What is striking what we just heard from the president and what we heard in his last statement on Ukraine is how personal he gets -- president who wouldn't. We've heard from the White House saying that the Russians and President -- bear culpability for what happened without Malaysian flight. And we heard from the president -- it is up to about -- potent it is his decisions his decision to make is there any evidence at all. That this will have an impact on Putin's thinking. You know a little bit John -- You put apparently very -- that -- Obama said he tried to get put his head you could hear. He tried to say that this is your choice this is about -- President Putin they've had some conversations I think President Obama has heard. That very lawyerly kind of conversation that Latimer -- it can have. And yet seen the fist still at work on on the border with Ukraine. Is there a way out for president who as I said he has staked so much on Ukraine. That his triumph as the Russian people see it in Crimea and his commitment. To what he considers. Russian ethnic. Russian allies in -- in the eastern Ukraine he's staked Russia's prestige there. Can -- back down now he needs to find essentially a way out and seeing that those rebels are about to lose within the next. Few weeks perhaps if Ukrainian forces keep up this pressure on them. He's decided to come back in full force armed them and even fire apparently from Russian territory on -- so he's doubling down. On on a bet that he's staked a lot -- Terry as the president was walking away we heard the question shouted at him about the situation in Gaza. And the incredible criticism we have seen in the Israeli press of the United States and specifically. Of secretary of state -- One striking thing here is that we saw the president. Had a conversation with. Prime minister Netanyahu on Sunday and the White House in their redoubt in their description of what happened on that call so that the president made it clear that there must be an immediate. Unconditional cease fire it -- hostilities now that was on Sunday. And in the hours after that we saw the Israelis actually. Kind of pump up their -- operations. In Gaza what is your sense on the ground of what kind of influence the United States has. And what Israel's doing right now. You know John we've covered the relationship between the United States and Israel for a long time I know you have I have never seen it. As poisonous as fighting for -- as it is right now that conversation that the president had. With -- with prime minister Netanyahu in which he demanded an immediate and unconditional cease fire and an amazing thing for American presidents and states and Israeli prime minister I demand that you did this. -- -- purported transcript of that conversation. Was leaked. In the Israeli media the -- Security Council says it's a forgery. But it just shows how nasty the atmosphere is between these two countries right now and as far as leverage. The Israeli prime minister the Israeli government is basically completely ignoring the Obama administration right now and one of the reasons he -- He has that rare thing here in Israel -- very fractious democracy he has -- near unanimous Israeli population. Behind him behind the Israeli forces in this operation the words of an American president. Any American president are not get away much with an Israeli prime minister who has nine out of ten Israeli supporting him right now in this operation. Incredible Terry Moran in Jerusalem thank you very much and thank you for watching.

This transcript has been automatically generated and may not be 100% accurate.

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