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Russia-Ukraine war: ‘Diplomacy is never dead even when it’s on life support,’ expert says

Max Bergmann, Senior Fellow at the Center for American Progress, joins Yahoo Finance Live to discuss U.S. sanctions and how Putin's invasion of Ukraine is a strategic disaster for Russia.

Video Transcript

KARINA MITCHELL: Welcome back. Well, the second round of talks between Ukraine and Russia wrapped today. That as Russia's invasion enters a second week. Russian forces gaining ground in the south. Meanwhile, the humanitarian crisis escalating, with the UNHCR saying more than one million people have fled Ukraine. And the US readies a new round of sanctions on oligarchs. With more on all of this, let's bring in Max Bergmann, senior fellow, Center for American Progress. Max, thanks so much for being here. And just want to get your take--

MAX BERGMANN: Thank you.

KARINA MITCHELL: --on the headlines crossing right now that the US has sanctioned eight more oligarchs and their families, and then slapping visa restrictions on many more.

MAX BERGMANN: Well, I think President Biden signaled this at the State of the Union address, and I think we're going to see more action as well. I think one of the things that has been particularly noteworthy is that this is also going to be done in conjunction with European allies. The administration announced the creation of a transatlantic-- essentially, a transatlantic sanctions task force to go after oligarchs, to go after sanctions-- the companies and others that are in violation of sanctions. So I think we're going to see a huge effort by the administration, by European allies, to really crack down on Russian oligarch money and those that are connected to the Kremlin.

KARINA MITCHELL: And Max, just want to go back to those discussions that wrapped up today between Ukraine and Russia. So they both went in with very different agendas, right? Russia wants Ukraine to give up its seat of government, weapons, not to seek NATO or EU membership, whereas Ukraine was looking for a ceasefire and humanitarian aid.

So I don't know how much closer they got to a resolution of this conflict, but there was some good news, right, that they're going to establish this humanitarian corridors that will allow for supplies and food and medical supplies to head into the most intense areas where the conflict is raging. And your thoughts on that because I'm wondering, does that signal at all that perhaps diplomacy isn't dead, and there could be a way forward?

MAX BERGMANN: Well, I think that is positive. Obviously, whenever humanitarian convoys are allowed, I think that shows a degree of good judgment on both sides. And I think when it comes to diplomacy, look, diplomacy is never dead, even when it's on life support, that there's always going to be an effort to engage, I think particularly from the US and European side toward Russia. And the Ukrainians have indicated a willingness to engage with Russia.

But Vladimir Putin's comments today also, I would say, run against any hope that diplomacy is going to yield significant results. I think, look, the Russians are sort of in too deep here. And to pull back or to make concessions, agreeing to a ceasefire or pulling out of forces would be such an admission of failure that I'm not sure Putin can do that. And for Ukraine, while continuing a war is going to be extremely costly, they have also shown that they are able to fight. And so I think we're in a place where it looks like this conflict is about to take an escalatory course and get even more violent, unfortunately.

KARINA MITCHELL: Yeah, unfortunately, I don't think it's in Putin's DNA to concede too much. But I'm wondering, do you think he realizes how badly he misjudged this invasion? He had no clue that World, Inc would turn their backs on Russia the way it did so quickly because it's a far different outcome what we're seeing now than when he annexed Crimea. What are your thoughts on that?

MAX BERGMANN: I think he badly miscalculated. And if he doesn't know it, then he's more out of touch than even I would have guessed. Because look, I think his assumption was that he had sort of, quote unquote, "sanction-proofed" his economy with 600 billion in reserves. And I think he questioned sort of going back to kind of the Soviet period that the West and its capitalist decadence would not sort of dare absorb any sort of economic cost for sanctioning Russia. And I think that he's seeing that that's totally incorrect.

And I think what's noteworthy is while the sanctions have been incredibly strong, there is room to escalate them. The United States hasn't done full blocking sanctions on many of Russia's banks. I think we're in a period where they want to pause and see what happens. But I think it shows actually the strength of the West economically and how badly he also misjudged the Ukrainian people. So this has just been one disaster after another for Vladimir Putin. He finds himself in a total military quagmire, economic quagmire, diplomatic quagmire. It's very hard to see a path out of this for him, unless he makes real concessions.

KARINA MITCHELL: And your reaction, Nancy Pelosi, the House Speaker just came out and said that the US should ban Russian oil. How surprised are you by that? And then do you think those sanctions come?

MAX BERGMANN: I think they likely will come. I think there's always, when it comes to sanctions, the administration oftentimes takes action, and then Congress waits to see what it does and then pushes it to be stronger. And I think what you're going to see is a dramatic effort not just in the US to get off Russian oil, which is not that significant for our economy, but in Europe, I think a crash course to reduce and eliminate their dependence on Russian fossil fuels. And while I think some of that will go into LNG, I think what we'll really see is a dramatic investment in renewable and clean technology in Europe.

And I think that's going to have real implications for the broader industry and for the broader efforts against climate change, that it's a crisis like this that causes people to move, causes things to change. We saw that already in German defense spending. I think we're going to see that on the energy side in Europe, and potentially the United States as well.

KARINA MITCHELL: And I wonder how long Russian citizens, who are going to get battered by all of these sanctions, how long do they tolerate having Putin in power. It remains to be seen. OK, we'll have to leave it there. Thank you so much for coming on, Max Bergman, senior fellow for the Center for American Progress.