If Moscow continues fueling unrest in Ukraine, Russian President Vladimir Putin and others in his leadership circle will face increasingly broad sanctions, U.S. President Barack Obama warned on Friday.
Appearing with German Chancellor Angela Merkel at a joint news conference in the White House Rose Garden, Obama praised her for being a strong partner on Ukraine.
The two nations, he said, “are united in our unwavering support for Ukraine.”
Any Russian attempts to interfere with Ukraine's May 25 presidential election would prompt new pressure on Russia's energy sector, Obama said. Ukraine's parliament had voted in February to remove Victor Yanukovych as the country's leader.
Both Obama and Merkel said they want to see a diplomatic resolution to the crisis. Otherwise, Putin and others involved in destabilizing Ukraine “will face increasing costs as well as growing isolation,” Obama said.
Sanctions, imposed in March after Russia annexed Crimea, were expanded April 28. They include visa bans and the freezing of any U.S. assets for nearly 50 political and business allies of Putin.
New violence involving pro-Russian forces in eastern Ukraine suggests the measures are not curbing the Kremlin.
Obama also urged Moscow to press pro-Russia militants to free the seven military observers taken hostage last weekend. Continued detention of the observers, from the Organization for Security and Cooperation in Europe, is "disgraceful" and "inexcusable," Obama said.
During meetings Friday, the two leaders were to discuss the National Security Agency's spy program, which targeted Merkel's phone conversations and caused tension between the two allies. Since then, "we've tried to reform what we do," Obama said at the news conference, emphasizing the continued need to balance privacy and security concerns.
Merkel and Obama said they were united in the goals of supporting Ukraine and of penalizing Russian leaders for fomenting unrest there.
"We're united in our support for Ukraine, including the very important IMF program approved this week," Obama said. The International Monetary Fund announced a $17 billion, two-year aid package to the besieged country.
Obama promised "sectoral sanctions" on Russia if Moscow disrupted plans for Ukraine's election. The energy and banking sectors, plus military arms sales, are among the most likely targets.
Some of Germany’s largest businesses have voiced strong opposition to broader sanctions against Russia, The Wall Street Journal reported Friday.
They include Deutsche Bank, Volkswagen, Adidas, chemical giant BASF and engineering and electronics conglomerate Siemens, all with operations in Russia.
Getting Europe to agree to tougher sanctions has been a challenge for Obama. Some European nations have tight economic ties to Russia and many of them depend heavily on Russian oil and gas imports.
Moscow has indicated it is willing to use its gas supplies as leverage in the dispute over Ukraine. Russia has substantially raised the price of gas to Ukraine and threatened to reduce the amount it supplies.
In their conversations Friday, Obama and Merkel discussed the need for Europe to diversify its energy sources.
At the news conference, Merkel called for support of the proposed Trans-Atlantic Trade and Investment Partnership, which would ease trade restrictions between the U.S. and Europe.
"We are firmly convinced this offers a lot of opportunities" to trade partners, Merkel said.
She later addressed the U.S. Chamber of Commerce concerning the strength of the German-American relationship and trans-Atlantic trade.
VOA White House reporter Luis Ramirez and Reuters contributed to this report.