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Question: Secretary Nuland, welcome to the show, welcome to Portugal. First question on the issue of Ukraine. Do you believe that the United States and Europe have different positions on Ukraine. Are we in sort of a war between U.S. and Europe because of Ukraine?

Assistant Secretary Nuland: Well, first, Nuno, let me just say how great it is to be back in Portugal and at this very important moment in our relationship and for Portugal. Congratulations on the 40^th anniversary of the Carnation Revolution. I think Portugal has an enormous amount to teach Ukraine and frankly to teach Russia. You made the transition to democracy without a drop of blood being spilled and that is what the people of Ukraine want for themselves. I don’t think that the United States and Europe have different positions. In fact, today we both said to Russia that we are dissatisfied with Russia’s implementation of the Geneva Agreement of less than two weeks ago. That we do not see the commitment that they promised to make to help stabilize Ukraine and, on the contrary, they are playing a negative, destabilizing role and, therefore, there have to be costs and we both imposed fresh sanctions today.

Question: You know what the Russians are saying is that, although they understand what they call the struggle of Eastern parts of Ukraine. They are not present militarily so the people that are there are grass roots people, probably some Cossacks, probably some paramilitary groups but not Russia as a state. Would you agree with that statement?

Assistant Secretary Nuland: That is complete garbage. We have high confidence in our assessment and, frankly, it is Europe’s assessment as well that Russia is playing a concrete role in organizing, funding, assisting, arming these protests and is playing an extremely destabilizing and dangerous role inside Ukraine, let alone the threatening moves that it is making with its 40,000 troops around Ukraine’s borders. Ten battalions of which went right up to the borders just a couple of days ago.

Question: Yeah, but that is the forces that are on the border. I am saying the forces that are inside of east Ukraine.

Assistant Secretary Nuland: And I said Russia is playing a concrete role. It has its own intelligence forces inside Ukraine who are organizing, coordinating, arming and funding the destabilization in the east. There are obviously some Ukrainians participating as well, but they are not the best actors inside eastern Ukraine and, in fact, if you look at the polling – Ukrainian polling, American polling, and European polling – that polling indicates that less than 18% of Ukrainians want anything to do with what Russia is proposing.

Question: I know you have discussed this topic with Christiane Amanpour, among others, but who is calling the shots in Moscow? Do you see this as a rational product of Russian foreign policy? You are a consummate diplomat, you are a professional diplomat. You have seen Russia in several shapes and forms. Is this a decision of a man or of a system? Do you see any rationality behind this Russian position?

Assistant Secretary Nuland: I believe, through my own experience, that you have to listen to what leaders say and believe what they say. We have a President in Russia who is talking about his greatest regret is the fall of the Soviet Union, who is invoking the period of Catherine the Great, one of the biggest expanders of the Russian empire, who is talking about “novo Russia” a time when half of Ukraine was part of Russia so you have to take him seriously when he says that is his aspiration.

Question: So people would argue that lots of problems that Ukraine is facing now are also due to their own incompetence, division, corruption, infiltration by other forces and surely also the fact that they are demoralized and maybe weakened at this moment, would you agree that?

Assistant Secretary Nuland: Absolutely, that is what Maidan was about. Maidan was about first the young people of Ukraine, but then old people and business people saying we want to turn the page on an era of corruption, on an era of bad government, on an era of a few rich people stealing the wealth of the country. We want to live in a clean, democratic country. That is what they are fighting for and that is what the U.S. and Europe are supporting. And that is what Russia is trying to deny them.

Question: As you know, Ukrainian Special Forces are hesitant to enter in to town centers because they do not want to arrest civilians, who are being used, apparently, as human shields, and so the operation is very difficult for the Ukrainians. If the operation doesn’t work, if the status quo continues, if everything continues to be occupied in those cities, the public buildings continue to be occupied, what is there to be done besides sanctions?

Assistant Secretary Nuland: Well, first to say, as you said, that the Ukrainians and their security services have shown enormous restraint in the face of the kind of terrorist, aggressive, vicious tactics that are being undertaken by the militants, and by the pro-Russian separatists. As you know, just this weekend, eight international monitors, OSCE monitors, taken hostage and taken to the dungeons of Slavyansk, now this awful epicenter of everything that is going wrong in Ukraine. Obviously, if Russia doesn’t change course. If it doesn’t allow Ukraine the breathing space to make its own choices, it is going to have to continue to cost and those sanctions and that isolation will just escalate. But, at the same time, the U.S. and Europe are intent, President Obama is intent, on leaving the door open for diplomacy, if Russian will change course. That is what our meeting in Geneva was about. But Russia has to make a choice. It can be a good neighbor or it can face isolation.

Question: Final thing because I know you are running out of time. One of the questions that Ukraine has to solve is that…

Assistant Secretary Nuland: What about something about Portugal? Are we going to talk about Portugal at all?

Question: Yes, we can say just one thing but just tell me one thing. Ukraine is very dependent, as Portugal is, on energy that comes from abroad. They don’t produce enough energy by themselves; we also feel that in another domain. How can it be solved for them to be less dependent on Russia?

Assistant Secretary Nuland: Well, first of all, you are absolutely right. This is one of the great difficulties that Ukraine faces, that other countries in Europe face, the great dependence on Russian energy. That is why we are working so hard as a transatlantic community, to diversify supply, to diversify types of energy. In the Ukraine context, the U.S. and Europe are working together: John Kerry, Cathy Ashton, Commissioner Oettinger were together two weeks ago to look at reverse flow, to move gas from Poland and Hungary and Slovakia back into Ukraine and we’re being relatively successful at that. But, you know, Ukraine is also exploring alternatives like shale gas and, if that works out, Ukraine will be a very rich country, very soon.

Question: Finally, about Portugal.

Assistant Secretary Nuland: Yes.

Question: How would you describe the present state of relations? We do not appear to have any storm between Portugal and the United States except for the questions of Lajes that gathered lots of opinions recently. Do you think there is a problem between Portugal and the United States because of the Azores base?

Assistant Secretary Nuland: We are great, strong allies. We so appreciate the transatlantic spirit and the global commitment of Portugal. What I wanted to say today is how proud we are of Portugal and the Portuguese people. How you have weathered these three years of difficulty. The intense reforms that you have undertaken and we have enormous confidence in Portugal’s future and what we want is for Portugal, and the Portuguese people, to have confidence in their future. Which is why I was here today talking with young entrepreneurs, the next generation, talking about the transatlantic trade and investment partnership that we are going to do that is going to bring jobs and growth on both sides of the Atlantic. We want to see Portugal continue to be that transatlantic engine of growth, the connection between U.S. and Europe that is going to make us all stronger and more prosperous. With regard to Lajes, we have a long, historic security relationship in the Azores. It is time now to broaden and deepen that relationship so it is also about economic opportunity, it is about protecting the environment, it is about tourism. We will continue to have a security relationship but let’s do more than that in the Azores.

Question: Have a safe flight.

Assistant Secretary Nuland: Thank you Nuno.