WRAPUP 3-NATO commander warns of Russian threat to separatist Moldova region

Sun Mar 23, 2014 4:10pm EDT

(Adds Schaeuble quote, G7 to meet on Monday)

* NATO commander warns of threat to Transdniestria

* Says Russian force on Ukraine border is "very, very sizeable and very, very ready"

* Russian ambassador to EU says Russia has no expansionist views

* U.S. Senator John McCain draws parallel between Putin and Hitler

* Russian bank SMP says Visa, MasterCard resume processing payments

By Adrian Croft and Aleksandar Vasovic

BRUSSELS/FEODOSIA, Ukraine, March 23 (Reuters) - NATO's top military commander said on Sunday Russia had built up a "very sizeable" force on its border with Ukraine and Moscow may have a region in another ex-Soviet republic, Moldova, in its sights after annexing Crimea.

Russia was acting more like an adversary than a partner, NATO's Supreme Allied Commander Europe, U.S. Air Force General Philip Breedlove said, and the 28-nation alliance should rethink the positioning and readiness of its forces in eastern Europe.

Russian troops, using armoured vehicles, automatic weapons and stun grenades, seized some of the last military facilities under Ukrainian control on Saturday in Crimea, the Black Sea peninsula that Russian President Vladimir Putin formally annexed the day before.

Breedlove was one of several Western officials and politicians to warn on Sunday that Russia may not stop there in a crisis that has taken East-West relations lurching back towards the Cold War since pro-Western protests in Ukraine ousted Moscow-allied President Viktor Yanukovich last month.

"The (Russian) force that is at the Ukrainian border now to the east is very, very sizeable and very, very ready," the NATO commander told an event held by the German Marshall Fund think-tank.

U.S. President Barack Obama's deputy national security adviser Tony Blinken said the build-up might just be aimed at intimidating Ukraine's new pro-Western leaders but that Russia could invade the country's mainly Russian-speaking east. "It's possible that they are preparing to move in," he told CNN.

A meeting of the G7 group of industrialised nations has been hastily convened for Monday in the Netherlands to allow leaders to discuss a response to Russia's actions. Obama will also meet Russian Foreign Minister Sergei Lavrov for bilateral talks.

Russia said it was complying with international agreements and had no plans to invade. It has called the soldiers who took over Ukrainian bases in Crimea "self defence forces".

The United States and the European Union have targeted some of Putin's closest political and business allies with personal sanctions and have threatened broader economic sanctions if Putin's forces encroach on other eastern or southern parts of Ukraine with big Russian-speaking populations.

Germany, which has close trade ties with Russia, said the European Union was united in its readiness to impose sanctions on Russia if necessary, and that Moscow had the most to lose.

"None of us wants to escalate, but if Russia changes things unilaterally, then it must know that we won't accept it and that relations will be bad," Finance Minister Wolfgang Schaeuble told German television.

"VERY WORRISOME"

Ukrainian marine standards were still flying on Sunday alongside the Russian flag at the Crimean base of Ukraine's top military unit in Feodosia, but the Ukrainian troops were getting ready to leave after the Russian military takeover.

"Our only issue is that we want to leave this place with honour, weapons and vehicles," one Ukrainian soldier said.

Blinken said Washington was considering all requests for military assistance from the government in Kiev, but that it would be unlikely to prevent an invasion of Ukraine, which is not part of NATO. Breedlove said the military alliance needed to think about its eastern members, particularly the former Soviet Baltic states of Lithuania, Latvia and Estonia.

"We need to think about our allies, the positioning of our forces in the alliance and the readiness of those forces ... such that we can be there to defend against it if required, especially in the Baltics and other places," Breedlove said.

Breedlove said NATO was very concerned about the threat to Transdniestria, which declared independence from Moldova in 1990 but has not been recognised by any United Nations member state. About 30 percent of its half million population is ethnic Russian and more than half of the total speak Russian as a mother tongue.

Russia has 440 peacekeepers in Transdniestria plus other soldiers guarding Soviet-era arms stocks. It launched a new military exercise, involving 8,500 artillery men, near Ukraine's eastern border 10 days ago.

"There is absolutely sufficient (Russian) force postured on the eastern border of Ukraine to run to Transdniestria if the decision was made to do that, and that is very worrisome," Breedlove said.

The speaker of Transdniestria's parliament has urged Russia to incorporate the region, which lies to the west of Ukraine. The new leaders in Kiev have said Moscow could seek to link up pro-Russian regions in Moldova, and Georgia to Ukraine's east, in a destabilising southern corridor with Crimea in the middle.

Russia's Deputy Defence Minister Anatoly Antonov was quoted by the state's Itar-Tass news agency as saying Russia was complying with international agreements limiting the number of troops near its border with Ukraine.

Moscow's ambassador to the European Union, Vladimir Chizhov, said Russia did not have "expansionist views". Asked to give a commitment that Russian troops would not move into Ukrainian territory outside Crimea, he told Britain's BBC. "There is no intention of the Russian Federation to do anything like that."

U.S. Senator John McCain, a Republican foreign policy specialist, told the same BBC show that Putin's actions in Ukraine were akin to those of Adolf Hitler in 1930s Germany.

"I think he (Putin) is calculating how much he can get away with, just as Adolf Hitler calculated how much he could get away with in the 1930s," McCain said.

"PANDORA'S BOX"

Germany's Foreign Minister Frank-Walter Steinmeier underscored the huge potential repercussions of Russia's bid to redraw national borders in Europe.

"I'm very worried the unlawful attempt to alter recognised borders in our European neighbourhood, 25 years after the end of the Cold War, will open Pandora's Box," he said.

Belarussian President Alexander Lukashenko, a close ally of Russia, accepted on Sunday that Crimea was now "de facto" a part of Russia, but said the annexation set a "bad precedent".

Western sanctions lost some of their sting on Sunday when Russia's SMP bank, whose main shareholders were targeted by U.S. sanctions, said Visa Inc and MasterCard Inc had resumed payment services for its clients.

The bank said it was glad the two biggest international payments systems had listened to its arguments to reverse Friday's suspension of services as it was wrong to target the bank, which was not itself subject to any sanctions.

Putin and Russian media had mocked the sanctions, which did not stop the Russian military completing its takeover of Ukraine's military bases in Crimea. Russia's defence ministry said on Sunday that its flag was now flying over 189 Ukrainian military installations on the peninsula.

The EU emphasised its support for the new pro-Western government in Kiev, signing a political agreement with interim Prime Minister Arseniy Yatseniuk last week.

It also promised financial aid for the government - which Moscow says came to power by a coup to overthrow Yanukovich after he rejected an EU trade deal in favour of closer ties with Russia - as soon as Kiev reaches a deal with the International Monetary Fund. The IMF will report on Tuesday. (Additional reporting by Alexandar Vasovic in Simferopol, Alissa de Carbonnel and Oksana Kobzeva in Moscow and by Eric Beech in Washington; Writing by Will Waterman and Philippa Fletcher; Editing by Robin Pomeroy)

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