Thank you, Julia, for the kind introduction and thank you to Atlantik Brücke and TBI for hosting me here today. I have visited Germany more often than any other country during the Biden Administration. This speaks not only to the depth but also the breadth of the U.S.-German partnership on economic, climate, and national security issues. But as you all know, the foundation of our partnership is deeper than our shared interests. Our people share the same values, including a deep and abiding commitment to promoting democratic values at home and abroad.
I’ve come to Berlin on the back of a trip to Kyiv, where I had a chance to meet my counterparts and brave Ukrainians who have been resilient in the face of unyielding war. I was reminded that Ukraine remains a democratic country today because its people are willing to fight for freedom.
Over two years ago, when Russia launched its full-scale invasion of Ukraine, the Kremlin expected to be in control of Kyiv within days and the entire country within weeks. But Ukraine stood up, and our coalition stood beside them, denying the Kremlin the quick victory it expected. And as the Ukrainian people fought off advancing Russian troops, we put in place unprecedented sanctions that cut off Russia’s largest banks from our financial systems and shackled the Kremlin’s war chest by immobilizing its sovereign assets held abroad.
In response to its strategic failure, the Kremlin has now committed nearly half a million troops to this unprovoked invasion and imposed a set of draconian capital controls to prevent money from escaping from Russia. As Russia’s strategy evolved so did our approach.
On one end, the United States, Germany, and our coalition provided Ukraine with weapons to defend against Russia’s aggression on the frontlines and economic support to bolster its resilience on the home front.
On the other end we took steps to isolate Russia from global financial systems and cut off access needed for military production. Simultaneously we targeted their main revenue source through an oil price cap reducing profits significantly. Putin's spokesmen acknowledged these measures are impeding military capabilities by limiting resources.
One objective was forcing hard choices between preserving economic potential or funding war efforts; clearly chosen was waging illegal warfare over domestic investment.
Putin has turned Russia into a war economy prioritizing military needs over civilian welfare akin Soviet-era policies allocating 29% budget towards defense doubling since 2021 driving inflation depleting reserves while exodus youth labor force continues amidst conscription/emigration worsening diversification woes amid nationalization trends exemplified by companies like Rolf Metafrax Kompaniya Etalon highlighting unreliable trade partner status dissuading international private sector engagement further transforming industries small but illustrative shifts such bakeries producing drones camping gear firms pivoting soldier supplies etcetera fundamentally changing industry-military nexus evidenced appointment Andrey Belousov Defense Ministry signaling industrial base focus ensuring war machine sustenance making difficult choices prolonging conflict necessitating adaptive policy responses increasing pressure again necessary recognizing costs potential strengthening militarily beyond pre-war status threatening NATO existential threat requiring decisive action expanding sanctions export controls reflecting wartime footing necessity clear-eyed understanding external support reliance primarily China importing $5 billion sensitive goods annually essential machinery components underscoring Harbin Institute visit joint campus emphasizing dependency unacceptable supporting military-industrial complex requiring explicit messaging deterring facilitation reinforcing compliance regimes preventing dual-use goods flow ready acting against facilitators strengthening enforcement ensuring alignment consistent communication Beijing unacceptable aiding Russian ambitions stark choice business economies equipping machinery readiness sanction accountability preferable healthy bilateral relations intertwined economies non-decoupling intent emphasized potential repercussions addressing supply chain scrutiny adapting models counteracting Putin ambitions proving confidence misplaced timely decisive concerted actions imperative preventing emboldened resurgent threats affirming unwavering support demonstrating resolve.
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