President Barack Obama and German Chancellor Angela Merkel agreed Friday to tighten sanctions against Russia's economy if it continues to provoke violence in eastern Ukraine and disrupts this month's Ukrainian presidential election.
At a Rose Garden news conference, Obama said he and Merkel preferred a diplomatic solution to the crisis but would "move quickly on additional steps" if the elections were impeded.
"The next step is going to be a broader-based sectoral sanctions regime," Obama said with Merkel at his side.
The administration had previously said it would impose wider penalties against Russia's economy if Moscow moved troops across the Ukraine border. But the president said a disrupted election in Ukraine would leave the U.S. and Europe with no choice "but to move forward with additional, more severe sanctions."
Europe had backed a measured pace of sanctions, but Merkel said Friday that further steps would be "unavoidable" if the election didn't stabilize the crisis.
"This is something that we don't want," she said through a translator. "But we are firmly resolved to continue to travel down that road" if Russia doesn't agree to a diplomatic solution.
Obama, who's come under criticism at home for not imposing more severe sanctions against the Russian economy, wouldn't say which areas the United States would target, but said consultations were ongoing among U.S. and European Union officials.
There's been reluctance to impose broad sanctions on Russian sales of oil and natural gas, reflecting concerns that such a step would cripple Europe's economic recovery _ Germany is the No. 1 recipient of Russian natural gas _ and likely drive up global oil prices. That could also hurt U.S. consumers and slow the U.S. economy ahead of November's midterm election.
Obama called it "unrealistic" to suggest that Russian oil or natural gas would be shut off, but said there were a range of targets "that have a significant impact on Russia," including its lines of credit for trade and its energy, arms and financial sectors.
The sanctions aren't aimed at punishing Russians, the president said, but at persuading Russian President Vladimir Putin to change direction.
"We do think that Mr. Putin and his leadership circle are taking bad decisions and unnecessary decisions," Obama said.
The U.S. and the European Union have already imposed two rounds of sanctions on Russian officials with close ties to Putin and on several Russian companies.
Merkel, who's said to have a good relationship with Putin and had spoken with him earlier this week, wouldn't say what she'd gleaned from the conversation. But she said Russia had failed to live up to an agreement to de-escalate the situation and that it needed to persuade pro-Russian separatists to release seven international observers who were being held hostage, including four Germans.
"This is a very crucial step that needs to happen for us," she said.
Merkel made it plain that revelations that the National Security Agency had been eavesdropping on her and other German officials were still a point of contention between the allies.
She noted in her opening remarks that the U.S. and Germany have "very close cooperation" on intelligence matters, but said there were still differences of opinion on striking the right balance between surveillance and privacy.
Further talks between the countries will be required, she said, "in order to overcome these differences of opinion."
Obama, who said he was "pained" that the "Snowden disclosures have created strains in the relationship," said his administration was committed to closing the gap between how U.S. and German intelligence operated.
"These are complicated issues, and you know, we're not perfectly aligned yet," he said.
The president also said at the news conference that he planned to ask Attorney General Eric Holder for an analysis of how the U.S. put convicted criminals to death, calling a botched lethal injection this week in Oklahoma "deeply troubling."
Obama said he supported the death penalty for crimes that included mass killings and the deaths of children. But he noted that there have been problems with carrying out the death penalty in the U.S., including racial bias and situations in which death row inmates were later found innocent.
"All these, I think, do raise significant questions about how the death penalty is being applied," the president said.
He said he'd talk with Holder for an analysis of what steps had been taken in the area of executions. In Oklahoma, a 38-year-old died of a heart attack Tuesday night a half-hour after his vein exploded as he was being administered an experimental cocktail of lethal drugs.
"I think we do have to, as a society, ask ourselves some difficult and profound questions around these issues," Obama said.
By Lesley Clark
McClatchy Washington Bureau