Signings take Crimea east, Ukraine west

U.S. wary of Russian boder troops

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BRUSSELS -- Two almost simultaneous signatures Friday on opposite sides of Europe deepened the divide between East and West, as Russia formally annexed Crimea and the European Union pulled Ukraine closer into its orbit.

In this "new post-Cold War order," as the Ukrainian prime minister called it, besieged Ukrainian troops on the Crimean Peninsula faced a critical choice: leave, join the Russian military or demobilize. Ukraine was working on evacuating its outnumbered troops in Crimea, but some said they were still awaiting orders.

With fears running high of clashes between the two sides or a Moscow grab for more of Ukraine, the United Nations chief came to Kiev, the capital, and urged calm all around.

All eyes were on Russian President Vladimir Putin, as they have been ever since pro-Western protests drove out Ukraine's president a month ago, angering Russia and plunging Europe into its worst crisis in a generation.

Mr. Putin sounded a conciliatory note Friday, almost joking about U.S. and EU sanctions over his Crimea grab squeezing his inner circle and saying he saw no reason to retaliate. But his government later warned of further action.

In Washington, national security adviser Susan Rice said the White House is skeptical that recent Russian troop movements on the border of southern and eastern Ukraine are merely training exercises, as the Russian government has claimed. "We have indeed been taking note of developments along Ukraine's border, including the Russian border," she said.

"The Russians have stated that they are intending military exercises," Ms. Rice said in the White House briefing room. "Obviously, given their past practice and the gap between what they have said and what they have done, we are watching it with skepticism."

President Barack Obama, opening a door Thursday to broad sanctions against key Russian industrial sectors, cited the troop movements and said he wanted to head off further Russian incursions into Ukraine after its Crimea annexation.

But Ms. Rice's comments suggested that tensions between the United States and Russia were deepening. Asked if the United States was "fundamentally reassessing" its relationship with Russia, she answered: "Yes."

Russia's troubled economic outlook may drive its decisions as much as any outside military threat. Stocks sank further, and a possible downgrade of Russia's credit rating loomed. Visa and MasterCard stopped serving two Russian banks, and Russia conceded that it may scrap plans to tap international markets for money this year.

Despite those clouds, Mr. Putin painted Friday's events in victorious colors, and fireworks burst over Moscow and Crimea on his orders, in a spectacle reminiscent of celebrations held when Soviet troops drove the Nazis from occupied cities in World War II.

At the Kremlin, Mr. Putin signed parliamentary legislation incorporating Crimea into Russia, hailing it as a "remarkable event."

At nearly the same time in a ceremony in Brussels, EU leaders sought to pull cash-strapped Ukraine westward by signing a political association agreement with the new Ukrainian prime minister. The highly symbolic piece of paper is part of the same EU deal that touched off Ukraine's political crisis in November, when then-President Viktor Yanukovych rejected it and instead chose a bailout from Russia. That ignited months of protests that eventually drove him from power.

Ukraine's new prime minister, Arseniy Yatsenyuk, a leader of the protest movement, eagerly pushed for the EU agreement. "This deal meets the aspirations of millions of Ukrainians that want to be a part of the European Union," he said in Brussels.

The pact includes security and defense cooperation, he said, though it is far from full EU membership and doesn't include an important free-trade element yet. But the EU decided to grant Ukraine financial advantages such as reduced tariffs to boost its ailing economy until the full deal can be signed. Those advantages are a blow to Russia, which had hoped to pull Ukraine into a Moscow-focused customs union.

In exchange for the EU pact, Ukraine's government is promising economic reforms. The deal comes at a critical moment financially: Amid its political crisis, Ukraine is teetering on the verge of bankruptcy, struggling to pay off billions of dollars in debts in coming months.

The United States and the EU have pledged to offer a bailout quickly.

Russia's foreign minister dismissed the EU pact, saying the current Ukrainian leadership lacks popular support and should have held elections before making such a decision.

Meanwhile, in what was seen a possible slight de-escalation in tensions, Russia accepted a plan to send an international fact-finding team of at least 100 members into Ukraine to assess security in the country. For more than a week, Russia had stonewalled the push by other members of the 57-nation Organization for Security and Cooperation in Europe to send in monitors. OSCE hopes that the mission will prevent an escalation of tensions in Ukraine's east and south -- regions with large Russian-speaking populations.

U.N. Secretary-General Ban Ki-moon, visiting Ukraine's capital, urged talks between Kiev and Moscow. "At times like this, it is vital that all parties refrain from any provocative actions that could exacerbate an already very tense and very volatile situation," he said.

The EU on Friday hit 12 more people with sanctions over Russia's annexation of Crimea, bringing its list of those facing visa bans and asset freezes to 33. They include one of Russia's deputy prime ministers, a Putin adviser and the speaker of Russia's upper house of Parliament, according to a document The Associated Press obtained.

Still, the EU roster fell short of the high-powered U.S. list, in an apparent reflection of European wariness of going as far as Washington to punish Russia -- Europe's neighbor, energy supplier and trade partner.

The New York Times contributed.

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