US prepares $1 billion aid package for Ukraine

MOSCOW — Accusing the West of encouraging an “unconstitutional coup” in Ukraine, Vladimir Putin said Tuesday that Moscow reserves the right to use its military to protect Russians there but voiced hope it won’t need to do so. The Russian leader’s first comments on Ukraine since its fugitive president fled to Russia came as U.S. Secretary of State John Kerry arrived in Kiev to meet with Ukraine’s new government.

Putin declared that Western actions were driving Ukraine into anarchy and warned that any sanctions the West places on Russia for its actions there will backfire. Both the U.S. and the 28-nation European Union have raised the possibility of sanctions against Russia.

The U.S. announced a $1 billion aid package Tuesday in energy subsidies to Ukraine, which is scrambling to get international loans to fend off looming bankruptcy. Its finance minister, who has said Ukraine needs $35 billion to get through this year and next, was meeting Tuesday with officials from the International Monetary Fund.

Tensions remained high Tuesday in Crimea, with troops loyal to Moscow firing warning shots to ward off protesting Ukrainian soldiers. Russia took over the strategic peninsula on Saturday, placing its troops around the peninsula’s ferry, military bases and border posts. Two Ukrainian warships remained anchored in the Crimean port of Sevastopol, blocked from leaving by Russian ships.

The new Ukrainian leadership in Kiev, which Putin does not recognize, has accused Moscow of a military invasion in Crimea.

Yet world markets seemed to recover from their fright over the situation in Ukraine, clawing back a large chunk of Monday’s stock losses, while oil, gold, wheat and the Japanese yen gave back some of their gains.

“Confidence in equity markets has been restored as the standoff between Ukraine and Russia is no longer on red alert,” David Madden, market analyst at IG, said Tuesday.

Speaking from his residence outside Moscow, Putin said he still considers Viktor Yanukovych to be Ukraine’s president and hopes that Russia won’t need to use force in predominantly Russian-speaking eastern Ukraine.

“We aren’t going to fight the Ukrainian people,” Putin said, adding that the massive military maneuvers Russia has been doing near Ukraine’s border had been planned and were unrelated to the situation in Ukraine.

Earlier in the day, Putin had ordered tens of thousands of Russian troops participating in those exercises to return to their bases — some 150,000 troops, hundreds of tanks and dozens of aircraft in all.

Putin also insisted that the Russian military deployment in Crimea has remained within the limits set by a bilateral agreement on a Russian military base there. He said Russia had no intention of annexing Crimea, but insisted its residents have the right to determine the region’s status in a referendum set for later this month.

Putin accused the West of using Yanukovych’s decision in November to ditch a pact with the EU in favor of closer ties with Russia to encourage the months of protests that drove him from power and put Ukraine’s future in turmoil.

“We have told them a thousand times ‘Why are you splitting the country?’” he said.

Yet he acknowledged that Yanukovych has no political future and said Russia gave him shelter only to save his life. Ukraine’s new government wants to put the fugitive leader on trial for the deaths of over 80 people during protests last month in Kiev.