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Editor’s Note: In an interview with Germany’s Deutsche Welle, Steven Pifer discusses American and European Union foreign policy positions on the Ukrainian political crisis, arguing that financial sanctions on some members of Ukrainian President Yanukovych’s team could be a useful tool to help resolve the crisis.

Spencer Kimball, Deutsche Welle: An aide to Russian President Vladimir Putin, Sergei Glazyev, accused the United States last week of not only financing the Ukrainian opposition, but went so far as to say that Washington was arming “rebels.” Is there truth to these claims or is this hyperbole?

Steven Pifer, The Brookings Institution: The idea that the US government is financing the protests is utter nonsense. There’s no evidence that I have seen of it. And the idea that Mr. Glazyev says it’s providing weapons is also nonsense. If you go back and look at what Mr. Glazyev has said, he’s been the point person in Russia to try and do everything he can to undermine Ukraine’s effort to do the association agreement with the European Union. And he’s said some things in the past that have had very little credibility.

Kimball: How would you characterize the US relationship with the Ukrainian opposition and the protest movement?

Pifer: The US government has reached out and has contacts with the opposition, which I think is appropriate for the embassy and for visiting officials to do. I think the US government would like to find a way to encourage the opposition and President Yanukovych to get a meaningful political dialogue underway. That would be the best way out of the current political situation.

Kimball: In January, Arizona Senator John McCain met with several Ukrainian opposition leaders, including Svoboda party leader Oleh Tyahnybok, who’s made anti-Semitic remarks in the past. What’s Washington’s relationship with the right-wing groups that are participating in the protests?

Pifer: I think there actually have been conversations with Tyahnybok since his party became a political force. And I know for a fact that the American embassy has been pretty direct with Mr. Tyahnybok and the Svoboda party about some concerns about some things they have said, including handing over several pages of quotes of things that were seen as anti-Semitic and such.

Kimball: There’s been growing discussion in the EU and US about imposing sanctions against Ukraine. What kind of sanctions are we talking about? Are sanctions really an effective instrument to push Ukraine toward reform?

Pifer: I do favor targeted sanctions by the United States and the European Union with two objectives. One is to make clear to those who might be involved in the use of force that there will be penalties. But I also believe that sanctions can be used in a positive way and that is to prod people in the inner circle around Yanukovych to encourage him to engage in a real dialogue and attempt to find a solution.

Kimball: When we talk about Yanukovych’s inner circle are we talking about people in government or people in the business sector?

Pifer: The people who have the control of levers of force are in government. You want them to know this. But I think also when you’re talking about the inner circle, you’re talking about business people. Rinat Akhmetov, the wealthiest oligarch, has been fairly close to Mr. Yanukovych. I think it would be useful if Mr. Akhmetov was using his influence with President Yanukovych to encourage him to negotiate in a serious way to find a solution. And if there was some threat that there might be financial or travel sanctions on Mr. Akhmetov, that could be a useful lever.

Kimball: In the leaked conversation between US Assistant Secretary of State Victoria Nuland and US Ambassador to Ukraine Geoffrey Pyatt, the two US diplomats discuss the roles of the opposition leaders. Is the US laying out a roadmap here for a political transition?

Pifer: I read that as a conversation between two American diplomats, how they thought things ought to play out from an analytical sense. I did not read that conversation as them saying, “and this is now the roadmap that we will give to the opposition.” First of all, it would be awfully presumptuous for them to assume that they could dictate and provide that kind of roadmap. And there’s no indication that Vitali Klitschko or Arseniy Yatsenyuk or Oleh Tyahnybok are open to that kind of influence.

Kimball: Nuland goes on in the conversation to make her infamous remark about the EU. What’s at the root of this tension between the EU and the US?

Pifer: My guess is there’s a bit of frustration, and it’s one of things that Washington has had to learn to deal with. The European Union can be a very powerful political partner, but the European Union – being composed of 28 different states – often has difficulty coming to a consensus position. So I read that as an expression of frustration that the European Union was not moving more quickly.

Kimball: Why are there conflicting interests between Russia on the one side and the US and the EU on the other side in Ukraine?

Pifer: For Vladimir Putin, I think that this is a hugely important question. It’s important for his view of Russia as a great power having a sphere of influence in the post- Soviet space. Ukraine is a big piece of that and if Ukraine is not part of it, that leaves a big hole. Second, I think it’s also important to Mr. Putin domestically because he wants to be shown as taking a tough line and bringing Ukraine closer.

Kimball: I don’t think the West – particularly the European Union – has engaged in this in a geopolitical sense. The EU could have had a signed association agreement two years ago, except they said, “no, we want Mr. Yanukovych to demonstrate his commitment to moving toward a more democratic path first.” The European Union put in that case democracy ahead of geopolitics, which was the right decision.

Pifer: The United States for most of the last five years has come to a conclusion that in terms of Ukraine’s engagement with the West, the logical path for Ukraine to proceed is down the path of doing the association agreement with the European Union. So the United States, I think, has been quite comfortable letting the European Union take the lead for most of the past several years.

Kimball: Has Ukraine become a proxy battleground between Russian and the West during the current crisis?

Pifer: I hope not. I don’t think it’s helpful to Ukraine because, first and foremost, this crisis has to be solved by Ukrainians. The Russians, the Americans, the Europeans may have some ability to affect this at the margins, but there has to be a Ukrainian solution. And I don’t think it helps the Ukrainians to find a resolution to this crisis if this becomes a proxy battle between the West and Russia.