G-7 leaders agree to freeze out Russia

THE HAGUE — Leaders of seven of the world’s largest economies on Monday agreed to freeze Russia out of the Group of Eight nations and threatened sanctions against key sectors of its economy if Moscow further invades or seeks to destabilize Ukraine.

The moves, approved by the heads of the United States, Britain, France, Italy, Germany, Japan and Canada, represented a growing alignment behind a strategy to prevent any escalation of the crisis involving Russia’s incursion into Ukraine. But implicitly, the Group of Seven nations acknowledged that the standoff — with Russia in control of the Crimean peninsula and Europe moving only slowly to isolate Russia — may stretch on for months or years.

In a statement issued from the sidelines of a previously scheduled nuclear security summit, the leaders agreed that Russia’s annexation last week of Ukraine’s Crimea region was in “contravention of international law” and against the “shared beliefs and shared responsibilities” of the elite diplomatic club, which was expanded to include Russia in 1998.

The group revoked Moscow’s participation “until Russia changes course” and moved its annual meeting on the world economy from Sochi, Russia, to Brussels.

President Obama arrived at the meeting in The Hague — his first day of a weeklong trip to Europe and Saudi Arabia — intent on pushing a harder line against Russia, and he appeared to have had some success.

“Europe and America are united in our support of the Ukrainian government and the Ukrainian people. We’re united in imposing a cost on Russia for its actions so far,” Obama said early in the day at Amsterdam’s Rijksmuseum, standing in front of Rembrandt’s “The Night Watch,” a massive oil masterpiece depicting a militia rallying to fight.

Moving the June gathering from Sochi— a town that President Vladimir Putin redeveloped as a symbol of modern Russian might and which hosted this year’s Olympic Winter Games — to the seat of the European Union was laden with symbolism but limited in impact. Still, it marked another milestone in Russia’s shifting relationship with Europe in the post-Cold War era.

“Symbols do matter,” said Michael McFaul, the former U.S. ambassador to Russia who left his post this year and is now a Hoover fellow at Stanford University. When Russia formally joined the G-8, he said, it was heralded as an arrival.

“For them, it was a symbol of being a part of the big-boy club, the great-powers club and a club of democracies, I might add,” he said. “Those aspirations are over or, at least, put on hold for now.”

Russian Foreign Minister Sergei Lavrov, who attended the nuclear security summit, dismissed the G-7’s decision as insignificant, saying that most major problems can be discussed at other international bodies.

“The G-8 is an informal club, no one gives out membership cards and no one can expel members,” Lavrov told reporters. “If our Western partners believe that this format has exhausted itself, let it be. We are not clinging to it.”

Obama and Putin last week imposed sanctions on each other’s top aides and other government officials because of the dispute over Crimea. Earlier in the week, Washington and the 28-nation European Union jointly imposed travel bans and asset freezes against about two dozen Russian and Ukrainian officials. The EU later added more Russian officials to the list.

As leaders met in The Hague on Monday, Russian forces were consolidating their hold on military sites in Crimea. U.S and NATO officials said they were also keeping a wary eye on Russian troops massing elsewhere in southern Ukraine and in the east.

Russia rallied its own international clique to its defense. A group of emerging economies — Brazil, Russia, India, China and South Africa — also met. The so-called BRICS nations issued a statement disavowing sanctions on Russia and urging nations to resolve their conflict at the United Nations “in a calm and level-headed manner.”

The current approach does not “contribute to a sustainable and peaceful solution,” the group said.

In Washington, the Senate moved forward on $1 billion in loan guarantees for Ukraine, but the bill still faces opposition from House Republicans who are crafting their own version of the measure.

At the summit on nuclear security in The Hague, more than 50 counties are discussing ways to prevent a terrorist attack with nuclear weapons. But the dispute over Crimea dominated the conversations. European nations had expressed reluctance to threaten broad sanctions on sectors of the Russian economy, mindful that such a move could damage their own still-fragile economies. But Monday’s statement warns of the possibility of “sectoral sanctions.”

A senior Obama administration official said the leaders discussed sanctions on arms, banking and energy. But European nations that depend heavily on Russian gas and oil are worried about restricting Moscow’s energy exports.

The U.S. has offered to “mitigate” the impact of such sanctions, expressing support for expansion of U.S. natural gas exports and encouraging Europe to diversify its energy sources, said the official, who asked to not be named discussing private talks.

The official noted that the Energy Department on Monday approved a conditional order to authorize exports of liquefied natural gas from a proposed terminal in Coos Bay, Ore. The order depends on the Federal Energy Regulatory Commission’s approval of an environmental review.

The senior administration official said the “clearest trigger” for the sanctions would be another border crossing by Russian troops, but fomenting political unrest or violence in Ukraine or Crimea might also provoke the more drastic penalties. That means, for now, that Russia’s isolation remains largely political rather than economic.

Matthew P. Goodman, a former Obama point person at G-8 and other international summits, said Russia would be hurt by its inability to participate in the forum. “In addition to status and prestige, it brings them some concrete benefit in terms of being able to shape issues on a global level,” he said.

But Goodman, now a political economist at the Center for Strategic and International Studies, said the G-7 nations were also taking a risk by excluding Russia, which can play a critical role in talks with Iran and Syria. “It’s significant that they didn’t blow up the G-8, just suspended it,” he said. “This leaves the door open to Russia’s returning to the fold if its behavior improves.”

Obama also appealed to other world leaders in his attempts to isolate Russia.

In a meeting with Chinese President Xi Jinping on Monday, Obama praised China’s response to Russia’s annexation of Crimea, an official said. Despite its frequent alliances with Moscow, Beijing abstained from a vote on a United Nations Security Council resolution declaring Crimea’s referendum to secede from Ukraine illegal.

U.S. officials have tried to appeal to China’s wariness about outsiders interfering in internal territorial disputes, such as in Tibet, to push it to align with the West.

“It’s very much in their interests to stand up for the notion that every nation has a right to make its own decisions,” deputy national security advisor Ben Rhodes said. “Russia cares a lot about its standing in the world. And it matters if traditional friends of Russia cannot express support for Russia.”

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Hennessey reported from The Hague and Parsons from Washington.

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Hennessey reported from The Hague and Parsons from Washington.