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President Obama meets with German Chancellor Angela Merkel in the Oval Office of the White House in Washington, Friday, May 2, 2014. Obama and Merkel are mounting a display of trans-Atlantic unity against an assertive Russia, even as sanctions imposed by Western allies seem to be doing little to change Russian President Vladimir Putin's reasoning on Ukraine. / Carolyn Kaster AP

WASHINGTON -- President Obama on Friday again warned Russia to deescalate the crisis in Ukraine or face tougher sanctions that would hit key sectors of their economy.

"If the Russian leadership does not change course, it will face increasing costs," Obama said after meeting with German Chancellor Angela Merkel at the White House. He added, "The next step is going to be a broader base sectoral sanctions regime."

Obama suggested that if Russia disrupts Ukraine May 25 elections the sectoral sanctions against Moscow would be inevitable and could hit the Russians arms and financial sector.

But Obama acknowledged that any penalties against Russian's energy sector--which Europe is heavily dependent on--would be limited.

"Energy flows from Russia to Europe, those continued even in the midst of the Cold War--at the height of the Cold War," Obama said. "So that idea you are going to turn off the tap on all Russian oil or natural gas exports is I think unrealistic."

The two leaders addressed reporters after meeting for more than an hour in the Oval Office, where the president said most of their discussion centered on the situation in Ukraine.

Obama and Merkel meet at a particularly complicated moment in the U.S.-Germany relationship, with Washington pressing Berlin to take tougher line against Russia for its actions in Ukraine and Germans still angry over revelations by former National Security Agency contractor Edward Snowden that the U.S. had been listening in on Merkel's phone calls.

Obama acknowledged during Friday's news conference that the two countries are still "not perfectly aligned" on their differences on the spying issue.

Merkel added, "We have a few difficulties yet to overcome."

Obama and Merkel spoke shortly after Ukraine mounted a major assault Friday against pro-Russian forces in eastern Ukraine. In response, Russia has called for an emergency meeting of the United Nations Security Council to discuss the escalating violence.

"As Ukrainian forces move to restore order in Eastern Ukraine, it is obvious to the world that these Russian-backed groups are not peaceful protesters," Obama said. "They are heavily armed militants that are receiving support from Russia."

Thus far, the U.S. and European sanctions have targeted individuals and companies with close ties to Russian President Vladimir Putin. But the Obama administration -- which has faced criticism from GOP lawmakers who believe the current sanctions are weak -- have been pushing for broader sanctions that could hit entire Russian sectors if the situation escalates.

Merkel has a closer relationship with Putin, but she has also expressed exasperation with the Russian leader as she has pressed him to push for the release of a German-led team of military observers who have been held for nearly a week in the Ukrainian town of Slovyansk, where pro-Russian militants have taken control.

"The post-Cold War order has been put into question," said Merkel, who added that Germany could support some sectoral sanctions.

German businesses are more active in Russia than the United States and Berlin's European allies.

Merkel, who noted Germany and Europe's dependence on Russian gas, underscored that imposing new sanctions is something she hopes can be avoided.

"My main aim would be first and foremost to improve stabilization and to see that elections can happen (in Ukraine),' Merkel said. "But we are also prepared to take further steps."



Copyright 2014 USATODAY.com

Read the original story: Obama warns Russia of possible sectoral sanctions

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