WASHINGTON - President 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 United States 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 underway 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 elections.
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.