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Press TV has conducted an interview with Geoffrey Steinberg, with the Executive Intelligence Review from Washington D.C., to shed more light on the ongoing political crisis in Ukraine. 

- Geoffrey Steinberg, there seems to be some challenges in definition when it comes to Ukraine, in particular Crimea, of what is legal and what is not.

Why do not you review, if you can, the situation there because as of now we are looking at 10 days from now that this referendum is going to take place.

Of course you have the interim government there, saying that this is illegal and of course you have Crimea along with Russia saying that Crimea wants to join the Russian Federation.

- Well, I think that you have to go back one step and raise the question of whether or not the current government in Kiev is, in fact, legal.

If you go back to the last week of February when you had three European Union foreign ministers going to Kiev and joined by an emissary from Russia as well, an agreement was reached to, basically, establish an interim government with President Yanukovych still in and with a number of issues to be handled through diplomatic means and then you had violent protesters in the Maidan including people who are associated with some organizations that can be fairly called neo-Nazi, who used force including activating sniper attacks against both police and other demonstrators to, basically, affect a change in government through military force in violation of the very agreement that Yanukovych and the three opposition party heads and the European foreign ministers had all signed.

So if you do not look at those events first, it is really not fair to evaluate the events in Crimea as if they were the starting point of the crisis in Ukraine.

Remember again that this all began were protests were activated against Yanukovych when he refused, back in November, to sign the European Union Eastern Alliance Partnership Agreement, which was quite frankly a bad deal from the standpoint of Ukrainian sovereign interest including severe economic problems that would have been precipitated had they gone along and signed that.

So this is not a simple...issue and you cannot selectively pick something that has occurred ....into the process and declare that that is illegal when the whole character of the current Kiev government violates the international law because a legitimately elected, undisputed legitimately elected government was overthrown by violence.

So unless there is a willingness to step back and look at the whole picture, I see this going in a very dangerous direction, possibly even leading to a war confrontation between NATO and Russia, which would be horrific.

- Perhaps you are not also aware, as I think, as I gather from Peter Sinnott, that the EU has come out and they have announced what they have called these sanctions, this is pretty much a threatening sanction, as they called it. They are going to target Russian officials, visa bans; they have joined the United States on that. This was the result of the meeting that took place in Brussels. It also has threatened, and I underline the word threatened, about the broad range of economic sanctions should Russia embark on further steps to destabilize Ukraine.

How did that happen? I was having the impression that the EU was pretty much, as our guest there said, economically somewhat obviously reliant on Russia and of course the big question about gas comes into play here, of the amount of gas that Russia provides the EU countries with.

- Well, first of all I think that Peter (Sinnott) is right that left to their own devices, the European Union would very much like to, number one: avoid being drawn into major economic sanctions against Russia because quite frankly the Russian have a lot of economic leverage.

The City of London handles a great deal of Russian money, both oligarchical money and Russian state funds and those banks are not in a very good shape and a sanctions regime which cut off the flow of those funds into the City of London and the other financial centers in Europe, could have a tremendously disastrous impact because, frankly, the European banking and financial system is on a very weak ground.

Secondly, Secretary Kerry was just in Kiev and he announced that the US is prepared to give a billion dollars in loan guarantees to Ukraine and it is already widely acknowledged that most of that money is likely to go to Russia in the form of payments for the increased cost of Russian natural gas to Ukraine because the especial discount prices, negotiated between Putin and Yanukovych, are going to be cut off in April.

Yesterday the Russians also announced that they were going to hold off on deliveries of fuel for nuclear power plants in Eastern Europe and Ukraine because of the “security situation” and Ukraine has 15 nuclear power plants that get most of their reprocessed fuel from Russia.

So, I think that if we get into the game of the economic warfare it is very questionable who is going to come out on top. I think that the Europeans...

- We are in the middle of it. The US has come out and announced these sanctions. The other ones being threats of, as I mentioned, targeted sanctions as well as a broad range of economic measures.

They have not announced specifically what those may be; so we are on that road, we are there. So what is going to happen?

- Well, let me just finish my thought. The US carries a great deal of leverage with the Europeans and I am sure that various US officials, if not Secretary Kerry, then certainly National Security Advisor Rice and others, were working the phones, maybe even President Obama himself; so that the gap between the European action and the US action was as narrowed as possible.

Until we see the content of the sanctions coming from the Europeans, one has to reserve judgment and say: well, there are sanctions in name and there are sanctions in deed, and it remains to be seen just how far this is going to go.

Again, I just want to say that there is just a much bigger threat issue here, namely that if NATO winds up on the border of Russia, with Ukraine being fast-tracked into not just the EU but NATO with the plans now even to possibly deploy missile defense systems into Ukraine, that has been muted in the last 24 hours, we could be dealing with a much greater strategic crisis and conflict than one having to do with economic ties and sanctions and the war danger implicit in this, has been described by some people as a kind of reverse Cuban missile crisis that could bring us to the brink of the kind of the confrontation that I do not think anybody’s interests are served by pushing that button.

- Geoffrey Steinberg, you seem to think that the bigger picture is about this, perhaps, military type of confrontation that may occur but, you know, maybe we do not have to go that far back; just a few days ago when Putin actually did issue a threat, this was against the US in that famous press conference that he had at his home outside of Moscow. He said, and this was in reference to the US, I think obviously now with the development of the EU coming and imposing sanctions; he said: If the US imposes sanctions on Russia, we may start using the Dollar for international transactions and an attempt to announce sanctions would end in a crash for the financial system of the United States, which would cause the end of the domination of the United States in the global financial system.

Do you think that Putin would go through with that?

- Well, I think that regardless of Russian actions, that the transatlantic financial system is on an extremely shaky ground, to begin with; and I do not think that Russia is the decisive or determinant factor in that.

European banks are going through stress tests and probably about a third of the major European banks, the systemically significant banks, are going to be failing those tests. They are undercapitalized, the EU is under enormous pressure of the ECB to do a quantitative easing policy like the Fed.

The Fed in the United States is now sitting on a portfolio of overvalued security assets in the range of two to three trillion dollars; that has never happened before. So I think that we are on a fragile ground to begin with.

So I think that the economic problems are there regardless of whether we get into a kind of a pissing contest of back and forth sanctions with Russia threatening to step away from the Dollar role as a world reserve currency.

Sergey Glazyev made statements in that general direction over the last few days as well. He is the head of the Customs Union; but I think that the weakness of Europe, as Peter (Sinnott) indicated, there was no impulse towards a Marshall Plan.

Yanukovych, in the closing days of negotiations around the Eastern Partnership, said that Ukraine would need 14 billion Euros a year in investment for an undisclosed number of years to rebuild the economy up to a level to be competitive with European Union standards...