CNN "CNN Newsroom" - Transcript: Ukraine Crisis

Interview

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TAPPER: Our next guest is a co-sponsor of that resolution and the chairman of the House Foreign Affairs Committee, Congressman Ed Royce of California joins us from Washington, D.C.

Congressman, good to see you. How much support do you expect for these sanctions specifically and more sanctions in general?

REP. ED ROYCE (R), CALIFORNIA, HOUSE FOREIGN AFFAIRS COMMITTEE: Well, it was interesting in the debate before the committee we ended up with the unanimous vote in support of this. But also we passed out an additional provision and that provision calls for the United States to start the process of leveraging Russia by exporting gas into Western Europe and into the Ukraine.

I think what's been missing in all of this is the very real leverage on Russia. And, in fact, 70 percent of their revenue from trade is from petroleum and 52 percent of the budget for the Russian government itself comes about as a result of their revenue given the monopoly pricing they have over Western Europe.

So we have a situation here in the United States where we're flaring gas, where we've got a glut, we can expand that into the market, and really give the Russians something to think about and making Europe much more independent in their decisions here. So I think introducing this leverage is important.

TAPPER: Congressman, yesterday started with President Obama, the White House announcing some of these sanctions on individuals in Russia, people responsible for the incursion into Crimea. That did not seem to result in Russia seeming intimidated at all. They launched a very large military exercise about 280 miles away from the border with Ukraine and, of course, now there are officials in Russia, allies of Putin, voicing support for the first time for this referendum in Crimea on whether or not Crimea should join the Russian federation.

Do you think anything the U.S. has done right now so far has caused Putin to do anything other than become more determined to take Crimea?

ROYCE: I think the Russians have perceived that we are willing to talk and the Europeans are willing to talk, but that there hasn't been really action that would give them second thoughts about further escalation. And my concern now is escalation of the eastern part of the Ukraine. So in order to get their attention, this is why I'm saying the White House, frankly, needs to come around to a strategy of supplying Europe, selling to Europe gas and replacing the monopoly that Putin has and the leverage that Putin has with Europe.

If we do that we can do many more things in tandem with Europe because the capitals in Europe, the decision makers across the European continent are very, very concerned about the pressure, the way in which Putin can bring down on them considerable leverage. We need to inverse that, reverse that by doing something that's going to help our balance of payments.

Frankly something that's going create jobs in the United States but most importantly finally give Putin something serious to worry about, which would to be implode his economy if this really became a long- term strategy of -- you know, with our ability to produce energy to supply Europe with that energy.

TAPPER: In addition to the energy issue, though, Congressman, isn't one of the issues the fact that the U.S. only does about $40 billion a year with Russia in trade whereas the European Union does, I think something like $460 billion and even if you remove the energy issue from the equation the Brits, the Germans, others in the EU just rely too much on Russia. Their economies are so intertwined that they are afraid that any sanctions imposed against Russia would respond in -- would result in retaliatory actions that would hurt their economies.

ROYCE: And, Jake, though it's a two -- it's a two-sided sword here. It's two edged in the sense that as much as it would help in the leverage, you know, here for the Russians, remember what it would mean if you had leadership on the part of Chancellor Merkel and from the UK that went with the United States and seriously threatened what I've just suggested.

If that were to happen you'd be looking at the collapse of the ruble, you would look at the collapse of the stock market in Russia. So it is clear that it would affect Russia far more than it would affect Germany or Britain. I think for that reason what's required is leadership here and at the same time consultations in which the Germans and the French sit down with the Russians and explain, look, how can we guide you towards an exit ramp here so that we do not end up with taking the steps that frankly would collapse Moscow's economy.

How do we -- how do we end the escalation of this, because the Russians continue to escalate it? And until we do something decisive on energy policy, until we have a strategy and a policy that actually is something that the Russians would really worry about long term we don't have that hammer.

But that's why I feel good about the action that the Foreign Affairs Committee took here because with the unanimous vote we now bring this to the floor, on Tuesday it will -- it will go off the floor and frankly it gives Merkel something to talk to Putin about in the next conversation in terms of what will happen next. And it's something that our allies in Germany and the rest of Europe really want to see is access to our gas.

So here is the way we convince Europe to stand with us on this. And here is how we can convince Putin, I think to stand down.

TAPPER: Congressman Ed Royce, chairman of the House Foreign Affairs Committee, thank you so much for your views. We appreciate it.

ROYCE: Thank you, Jake.

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