Draghi hails 'great progress' after banking union deal

European Central Bank (ECB) President Mario Draghi hailed the "great progress" made "for a better banking union" on Thursday, after the European Union agreed to complete the region's banking union.

Negotiators agreed to create a new agency to shut euro zone banks that are too weak to survive and a fund to help cover the costs, according to a draft agreement.

(Read more: German court says euro zone's crisis fund is legal)

All-night talks ended a stand-off between the European Parliament and euro zone countries over the new scheme, completing the second leg of banking union after supervision by the ECB.

"It's a very good agreement, its progress...We need a mechanism which is properly funded and the agreement actually improves on the pre-existing funding, and it's also a clear reference to enhanced borrowing capacity from the market by the fund," Draghi told CNBC on Thursday.

"The decision-making mechanism is also swifter and more operational so it's an improvement on that front too."

Chris Ratcliffe | Bloomberg via Getty Images

Mario Draghi, president of the European Central Bank (ECB)

The details of the compromise are outlined in a draft agreement and were confirmed by people involved in the talks. 

Under the compromise reached, a fund made up by levies on banks will be built up over eight years, rather than 10 as originally envisaged. It will also be possible for countries to share 40 percent of the fund from its first year.

(Read more: 'Dire' consequences loom for jobless Europe )

The deal also envisages giving the European Central Bank the primary role in triggering the closure of a bank, making it harder for the new 'resolution' agency to do so and limiting the scope for country ministers to challenge such a move.

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Aussie dollar resilience: Here today, gone tomorrow?

The Australian dollar has remained surprisingly stable this week amid volatile headlines from China and declining commodity prices but analysts are divided over whether this stability will last.

Australian assets are particularly vulnerable to economic swings in China– its largest trading partner – but fears over the strain on Beijing's financial system following two reports of corporate debt defaults and a tumbling yuan have yet to take their toll on the Australian dollar.

Furthermore, copper prices were on track to close out the week not far from three-and-a-half year lows. Exports of the metal bring in about $6 billion a year for Australia, making it a key commodity export with China representing one of the metal's top consumers.

(Read more: China moving closer to unleashing fresh stimulus)

The Aussie has managed to trade above 90 U.S. cents for a seventh straight session, rising to a three-month peak of $0.9137 on Wednesday.

"I don't expect anything below 7 percent for Chinese [gross domestic product] growth and I think that in terms of commodity prices, Australia doesn't have much to worry about, so 90 [cents per dollar] is a fair price," Michael Woolfolk, managing director and senior currency strategist at BNY Mellon told CNBC Asia's "Squawk Box."

"We're still several steps back now from our worst case scenarios in regards to growth expectations for the U.S. and China, so things look like they will improve from a couple weeks ago, which will be positive for the Aussie dollar," he continued.

(Read more: Australia resumes search for missing Malaysia jet)

But not everyone is as positive.

"I still think the China story is going to overshadow the Australian dollar. That story is still unfolding, there are a lot more chapters to be written and they may not have a happy ending. That could dampen any enthusiasm for the Aussie going forward," Michael Every head of financial markets Rabobank in Hong Kong told CNBC on Thursday.

Hamish Pepper, forex strategist, Asia Pacific at Barclays, also remains bearish, citing a target of 88 U.S. cents in the next three months.

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Ukraine crisis gives new impetus to EU-U.S. trade talks, U.S. says

Russia's annexation of Crimea underlines the need for the United States and the European Union to deepen their economic ties via an ambitious trade deal that would also allow Europe to import U.S. gas, Washington's top trade official said on Saturday.

Days before U.S. President Barack Obama and EU officials hold a summit in Brussels, U.S. Trade Representative Michael Froman said the rationale "could never be stronger" for a U.S.-EU free-trade pact, despite growing public hostility to it.

"Right now, as we look around the world, there is a powerful reason for Europe and the United States to come together to demonstrate that they can take their relationship to a new level," Froman told reporters.

(Read more: Russia hints at tit-for-tat response to EU sanctions )

"Recent developments just underscore the importance of the transatlantic relationship. "From both a strategic and economic perspective, the rationale for the T-TIP could never be stronger," he said, referring to the proposed accord's official name, the Transatlantic Trade and Investment Partnership.

Getty Images

President Barack Obama gives a statement on the situation in the Ukraine in the Brady Press Briefing Room of the White House on March 17, 2014 in Washington, DC.

Brussels and Washington say a trade pact encompassing almost half the world's economy could generate $100 billion in additional economic output a year on both sides of the Atlantic, as well as creating a market of 800 million consumers.

But since talks were launched eight months ago, reports of U.S. spying in Europe and accusations that an accord would pander to big companies have combined to erode public support.

(Read more: Where Russia's wealth is outside its borders)

Moscow's seizure of the Crimea region from Ukraine and Europe's reliance on Russian energy have focused minds across Europe about the need for stronger ties with the United States, while European Trade Commissioner Karel De Gucht warned that Russia was no longer a reliable partner.

"We should have a very clear idea of what Russia is doing by annexing Crimea. It doesn't have a place in normal international relations," De Gucht later told a conference alongside Froman.

"Do we have to swallow that? I think there is a price for that and I think we should be very clear, the EU and the United States together, that they (Russia) simply cannot do this," he said, although he declined to say if he backed a trade embargo.

Rethinking relations with Moscow

EU leaders dedicated a summit in Brussels on Thursday and Friday to rethinking relations with Moscow and accelerating their quest to reduce the bloc's reliance on Russian oil and gas, an area where the United States can play a role.

Froman laid out how companies could export U.S. liquefied natural gas (LNG) in tankers to Europe, as France, Germany and Britain seek, benefiting from the U.S. shale gas revolution.

Under U.S. rules, the Department of Energy must issue licenses to exporting companies, but license approval becomes much easier under a free-trade agreement, or FTA.

"Clearly, when the T-TIP is done, assuming it is done, there will be an FTA relationship with the European Union," he said.

Asia is for now a more lucrative export market for U.S. liquefied natural gas, but Froman said it was also up to European companies to decide where gas goes, and that exports did not depend on a transatlantic trade deal.

"Even right now, there have been four or five licenses approved for export to non-FTA countries. There are several European companies who are the contractors," he said, naming France's Total and GDF Suez.

"Where that gas goes is up to them. Conceivably, European governments have an interest in them bringing that gas to Europe," Froman said.

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The Week That Was: Russia annexes Crimea

CNBC's Tyler Mathisen looks back at the week's top business and financial stories. Markets stabilize following Russia's annexation of Crimea. Janet Yellen scared the markets a bit, hinting the Fed could raise interest rates next spring. And GM announced several new recalls.

The European Union's top two officials, Herman Van Rompuy and Jose Manuel Barroso, are expected to press Obama on the issue of energy on Wednesday when they meet in Brussels.

De Gucht said it was in the United States' interest that Europe should become less reliant on energy from Russia. "That's why I think we should have an ambitious chapter on energy in the T-TIP," he said, referring to EU demands for a clear framework setting out U.S. commitments on gas exports.

(Read more: Another Crimea? Ukraine's neighbor asks to join Russia)

Beyond Ukraine, other difficult issues include how to open up to each other's markets, removing barriers to business and customs duties that cost companies billions of dollars each year, particularly automakers such as Ford, General Motors and Volkswagen.

Washington and Brussels are at odds over an initial exchange of offers to open up markets and cut tariffs, with each saying the other has not been ambitious enough.

"We reaffirm that the goal of negotiations should be elimination of all tariffs. We would welcome Europe reaffirming that goal," Froman said.

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NATO warns of 'very sizeable, very ready' Russian force

NATO's top military commander said on Sunday that Russia had a large force on Ukraine's eastern border and said he was worried it could pose a threat to Moldova's separatist Transdniestria region.

Lonely Planet Images | Getty

Moldova, Eastern Europe, including breakaway region of Trans-Dniester

NATO's Supreme Allied Commander Europe, U.S. Air Force General PhilipBreedlove, voiced concern about Moscow using a tactic of snap military exercises to prepare its forces for possible rapid incursions into a neighboring state, as it had done in the case of Ukraine's Crimea region.

Russia launched a new military exercise, involving 8,500 artillery men, nearUkraine's border 10 days ago.

"The (Russian) force that is at the Ukrainian border now to the east is very, very sizeable and very, very ready," Breedlove told an event held by the German Marshall Fund think-tank.

The president of ex-Soviet Moldova warned Russia last Tuesday againstconsidering any move to annex Transdniestria, which lies on Ukraine's westernborder, in the same way that it has taken control of Crimea.

(Read more: Another Crimea? Ukraine's neighbor asks to join Russia)

The speaker of Transdniestria's separatist parliament had urged Russia earlier to incorporate his mainly Russian-speaking region. Transdniestria split away from Moldova in 1990, one year before the dissolution of the Soviet Union, amid fears that Moldova would shortly merge with neighboring Romania, whose language and culture it broadly shares.

Breedlove said NATO was very concerned about the threat to Transdniestria which he said, in Russia's view, was the "next place where Russian-speaking people may need to be incorporated."

"There is absolutely sufficient (Russian) force postured on the eastern border of Ukraine to run to Transdniestria if the decision was made to do that and that is very worrisome."

NATO had tried to make Russia a partner but "now it is very clear that Russia is acting much more like an adversary than a partner," he said.

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Obama Shows Europe How to Make Putin Pay

For the first time since Russian President Vladimir Putin began his adventure in Crimea, the West has given him something to think about: The U.S. has put strong sanctions on some of his closest aides, friends and business partners. Would that the same could be said of the European Union.

The EU has more power to threaten Russia’s economy and the wealth of its leaders, but today failed to follow the U.S. lead. EU-wide sanctions require unanimity among 28 countries. The lowest common denominator at the bloc’s summit in Brussels was inadequate to the gravity of Putin’s action: the first annexation of territory in Europe since 1945.

Standoff in Ukraine

The additions that President Barack Obama made to the U.S. sanctions list yesterday won’t push Putin to hand back Crimea -- nothing short of brute force could achieve that now. But by sanctioning Putin’s business allies and Bank Rossiya, which many Russians see as a savings bank for the president and his friends, Obama is extracting a price that Russia can't easily shrug off. The move lends credibility, as well, to his threat that if Putin goes further, the U.S. is willing to hit Russia’s economy harder.

The new list isn’t just about threatening the wealth of Kremlin allies, such as Gennady Timchenko, the 45 percent owner of the world’s fourth largest oil trading group, Gunvor Group Ltd. The Treasury document also implicates Putin in corruption, alleging that he "has investments in Gunvor and may have access to Gunvor funds." The warning that the U.S. can release more damaging information on Putin’s finances is clear.

EU leaders added a further 12 names to their sanctions list, but these don't include the Kremlin’s bankers and business fronts. The summit also promised to reduce energy dependency on Russia -- a good idea-- but the plan it announced is too vague to make a difference.

Europe's threat of further and more punitive sanctions still lacks credibility. This matters because Putin's recent assurances that he has no designs on the rest of Ukraine so long as Russian speakers are left in peace should be discounted. Russian forces continue to conduct exercises on Ukraine’s eastern border; pro-Russian self-defense forces are blocking Ukraine’s military from taking up defensive positions on the other side; and activists in Donetsk and other cities have kept their tents on the central squares, waiting for what comes next.

Willing European governments should act in concert with others, without striving for unanimity. France should cancel its $1.9 billion contract to sell two helicopter ships to Russia. (Allies in the North Atlantic Treaty Organization should buy them instead.) Ukraine has asked for defense and communications equipment; Europe should supply it. And Europe should kill Russia’s proposed South Stream natural gas pipeline project, whose purpose was to bypass Ukraine and increase EU dependence on Russian gas.

The U.K. has a particular responsibility. Its financial regulators should look closely at Russian assets in London. Much of the Russian money flowing through the City is legitimate, but some of it is money laundering. Sanctions aren’t required, just zeal to enforce existing law.

The point is to make Putin understand that his seizure of Crimea has wrecked Russia's relationship with its most important trading partners -- not just to his country's cost, but also to his own and that of his cronies. And the corollary must be made equally clear: If he goes further, so will the West.

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How Europe Can Ease Its Way to Inflation Goals

Inflation in the euro area fell to 0.7 percent in February, down a notch from January's 0.8 percent. The news, announced this week, should have attracted more attention. The European Central Bank is persistently failing to meet its goal of keeping inflation "below, but close to, 2 percent." It has the means to do something about this, but has decided not to act.

The situation demands further monetary easing -- but with interest rates already very low, that presents a problem.

Europe's QE Quandary

The ECB can't easily adoptquantitative easing, which the U.S. Federal Reserve and the Bank of Japan have used to good effect, because its legal power to do so is disputed. Germany's Constitutional Court referred the legality of Outright Monetary Transactions -- a bond-buying program announced by the ECB but never deployed -- to the European Court of Justice earlier this year, saying it believed the program to be illegal and wanted clarification from the higher court.

OMT is concerned with financial stability not monetary stimulus. But if OMT is illegal, then Fed-style QE would be too. Do these concerns over legality make sense?

Paul de Grauwe of the London School of Economics disputes it. He says the German court made two main arguments, both flawed.

First, according to the court, OMT overrides investors' judgments about the right prices for distressed government bonds, and that's not "monetary policy," which the ECB is confined to, under the terms of its mandate. Second, OMT (like QE) exposes the central bank to the risk of losses that would ultimately be borne by taxpayers. This makes OMT a kind of fiscal policy -- so again the ECB would be exceeding its powers.

De Grauwe says the first point is mistaken because the court is assuming that investors, left to themselves, would price bonds correctly. In fact, they don't, and the central bank is acting properly if it intervenes to fix errors. On the second point, he acknowledges the risk of defaults that could deplete the central bank's equity. But this isn't a problem, he says, because central banks, unlike governments, can't ever default. They can print money, so they don't actually need any equity.

Europe needs OMT to be available, so it would be good if the European Court of Justice accepted De Grauwe's arguments. Trouble is, his arguments aren't that convincing.

The fact that the central bank might have good reasons to buy distressed bonds doesn't bring such transactions within the realm of orthodox monetary policy: If that's the test the law imposes, De Grauwe's first argument isn't much help. And his second argument -- that central banks needn't worry about sustaining losses -- is too far-reaching. That view would justify plain vanilla direct financing of governments, where the central bank covers the government's budget deficit and simply forgives the loans it makes in the process. Forbidding that practice was the whole point of the law defining the ECB's powers.

The best way to legalize OMT and QE would be to give the ECB a new mandate -- one that explicitly allows unorthodox monetary policy in emergencies. But that won't happen, because the EU finds it harder to fix broken treaties than to adopt them in the first place. The European court, with luck, will fudge the issue, employing lawyerly ingenuity to justify ignoring the bad law as it stands. If that doesn't happen either, there's one more way to go.

Harvard's Jeffrey Frankel tells Mario Draghi, the ECB's president, you can do QE legally by buying U.S. bonds rather than the debts of EU governments. This doesn't rescue OMT, because that program has to buy EU debt. But ECB purchases of U.S. debt would be a way to undertake QE within the bounds of the mandate. And right now, the EU may need QE more than it needs OMT, because the threat of deflation looms larger than the danger of government defaults.

QE done this way usually goes by another name: unsterilized foreign-exchange intervention. It's certainly within the ECB's remit. It would ease monetary conditions in Europe both by expanding the money supply and by driving down the value of the euro. As Frankel says:

The strength of the euro has held up remarkably during the four years of crisis. Indeed the currency appreciated further when the ECB declined to undertake any monetary stimulus at its March 6 meeting. The euro could afford to weaken substantially. Even Germans might warm up to easy money if it meant more exports rather than less. ...
As the Fed tapers back on its purchases of US treasury securities, it is a perfect time for the ECB to step in and buy some itself.

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Obama’s Europe Trip Shifts to Mobilizing Ukraine Response

U.S. President Barack Obama is turning a European trip originally focused on nuclear security and trade into a mission to mobilize international opposition to Russia’s annexation of Crimea.

White House National Security AdviserSusan Rice said yesterday that Russian President Vladimir Putin’s moves to claim Crimea from Ukraine have prompted the U.S. and Europe to reevaluate their post-Cold War relationship with Russia.

“What will be clear for the entire world to see is that Russia is increasingly isolated,” Rice said at a White House briefing on week-long trip, which begins March 24 in the Netherlands. The U.S. is leading the charge to impose costs on Russia “for its aggression against Ukraine.”

Russia’s incursion into Ukraine has become the central issue for Obama as he enters into a series of discussions with leaders gathering for a nuclear security summit and the annual U.S.-European Union meeting. While there, Obama also will meet with other leaders of the Group of Seven nations, Chinese President Xi Jinping and U.S. allies in Asia.

It will be the first broad gathering of world leaders since Russia moved into the Crimean region. Russia completed its annexation of Crimea yesterday with Putin signing legislation in Moscow to absorb the Black Sea peninsula and its port, Sevastopol, from Ukraine.

Other Stops

The situation also is overshadowing other stops on Obama’s itinerary: his first meeting with Pope Francis at the Vatican and a visit to Saudi Arabia to discuss Syria, Iran and Mideast peace talks.

Russia is unlikely to retreat from its annexation of Crimea so the primary goal of Obama’s meetings in Europe is to reassure allies on the periphery of Russia such as Poland and the Baltic states and send Putin “a clear deterrent message,” said Robert Litwak, director of International Security Studies at the Wilson Center in Washington.

The U.S. and EU have slapped financial sanctions on Russian officials and Putin allies to pressure Russia. Obama and European leaders have signaled that Russia may face further repercussions if it doesn’t stop what they see as destabilizing actions in Ukraine.

“We’re already quite closely coordinated with our European partners,” Rice said.

Possible Sanctions

Obama signed a new executive order on March 20 authorizing though not implementing economic sanctions affecting parts of the Russian economy. They would target financial services, energy, metals and mining, defense and engineering. Those measures carry the risk of squeezing the economies of the U.S. and EU because they would hit multinational companies that do business in Russia.

The turmoil already has had an impact in Russia. Yesterday, the country’s benchmark Micex Index (INDEXCF) of stocks fell 1 percent, the most among emerging markets, to 1,307.34 by the close, and yield on government bonds due February 2027 jumped 12 basis points, the most in a week, to 9.42 percent. The ruble has tumbled 9.3 percent against the dollar this year, the worst among 24 emerging markets tracked by Bloomberg after Argentina’s peso.

Strobe Talbott, president of the Brookings Institution in Washington who was deputy secretary of state in President Bill Clinton’s administration, said Putin’s “appetite is unsated” by seizing Crimea and it’s too soon to say whether the sanctions will be enough to stop him from going further.

Russian Behavior

“It certainly hasn’t changed Russian behavior and it’s not going to change Putin’s own predilections,” Talbot said on Bloomberg Television’s “Political Capital with Al Hunt” airing this weekend.

The massing of Russian troops near Ukraine’s borders have raised concerns that Putin may push further into the second most populous former Soviet republic.

Rice said the U.S. views with “skepticism” Russia’s assertion that movements of its military on the borders of Ukraine were simply training exercises.

Since the breakup of the Soviet Union, the U.S. and EU have supported Russia’s integration into the global economy, such as backing its entry into the World Trade Organization.

“But that was predicated on an expectation that Russia would play by the rules of the road, the economic and security rules of the road, international law,” Rice said. “What we have seen in Ukraine is obviously a very egregious departure from that.”

G-8 Debate

Rice alluded to discussions about suspending Russia from the Group of Eight, saying members will “consider the optimum disposition of the G-8/G-7 mechanism going forward in light of recent developments.”

Russia still will take part in the nuclear security conference in The Hague. The summit -- the first was held in Washington in 2010 -- is aimed at working to prevent the spread of nuclear material and the spread of weapons.

While Obama and other heads of state will be attending, Putin is staying home. Russia will be represented by Foreign Minister Sergei Lavrov. Rice said that decision was made before the confrontation over Ukraine.

“We have every interest in continuing to cooperate with Russia and other countries, even where we have differences with them on other issues, on the issue of nuclear security,” Rice said.

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Russia Accepts Ukraine Monitors as West Warns on Troops

Russia agreed to international monitors arriving in Ukraine amid more turmoil in the region and as Western nations expressed growing concern over the Kremlin massing troops on the border with its neighbor.

While talks about the monitors with Russia were “difficult,” their presence may help avoid escalation of the conflict, German Foreign Minister Frank-Walter Steinmeier told reporters in Kiev yesterday. Pro-Kremlin forces seized a military airport in Crimea and ousted Ukrainian leader Viktor Yanukovych’s supporters protested in the country’s east.

The six-month monitoring mission is meant to cool tensions in the worst standoff between Russia and the West since the end of the Cold War. As Russian President Vladimir Putin completed the annexation of Crimea, the two sides exchanged sanctions, raising concern about escalation. U.S. President Barack Obama will meet allies during a European visit starting tomorrow.

MAP: The Russian Troops Along the Border

“It is important that we in the free world not accept the occupation of Crimea, that we continue to resist, and that we do not return to business as usual with the Putin regime until such time as the occupation of Crimea ends,” Canadian Prime Minister Stephen Harper said in Kiev yesterday at a news conference with Ukrainian Premier Arseniy Yatsenyuk. “The consequences of these actions will be felt far beyond the borders of Ukraine.”

East Ukraine

With Putin’s annexation of Crimea completed, attention shifted to whether Russia would seek to claim other parts of Ukraine. White House National Security Adviser Susan Rice said the U.S. was watching events on Russia’s frontier with Ukraine.

“The Russians have stated that they are intending military exercises,” Rice said at a March 21 briefing in Washington. “Obviously, given their past practice and the gap between what they have said and what they have done, we are watching it with skepticism.”

U.S. intelligence and military officials said there are now Russian troops on virtually all of the country’s border with Ukraine. Some units have moved within 31 miles of the border, said the officials, who requested anonymity to discuss classified intelligence reports.

Russian troops in some sectors, including near corridors from Russia to major Ukrainian cities, have been reinforced with armor, attack airplanes and helicopters, the officials said. There are also signs that the troops are receiving substantial logistical support, which could signal preparations for sustained operations, they said.

‘Far-Reaching Consequences’

The number of Russian troops along the border is about double what it was when the defense ministry in Moscow announced that its armed forces would hold exercises near eastern Ukraine, according to the officials. Even so, the officials said it’s hard to assess whether the Russians are preparing for an invasion or are trying to intimidate the pro-Western government in Kiev.

If Russian troops enter east Ukraine, it “would trigger far-reaching consequences in a broad range of economic areas,” U.K. Prime Minister David Cameron told reporters March 21 after a summit in Brussels. “That must include the key areas like finance, like the military, like energy.”

About 40 kilometers (25 miles) from the Russian border, Yanukovych supporters rallied in the city of Donetsk yesterday, urging the Kremlin-backed leader’s return and a referendum to give Ukraine’s regions wider power. More than 2,000 people gathered in the city of more than 1 million, according to the Interfax-Ukraine news service.

Federal Ukraine

“I’m for an integrated Ukraine, but with a federal form of governance,” said Mykola, 58, a retired mining engineer at the rally who declined to give his last name for fear of reprisal. “The east and west of Ukraine for sure should have a common defense, common science, common culture, but most of the region’s revenues should be kept within this region.”

The comments echo those from Russia, which has urged its neighbor to adopt a federal constitution that guarantees political and military neutrality, grants powers to Ukrainian regions, and makes Russian a second official language. There’s no indication that would be acceptable to the Ukrainian government or to its Western supporters.

Russia welcomes the decision by the Organization for Security and Cooperation in Europe to send monitors, the Foreign Ministry in Moscow said in a website statement yesterday. Their mandate doesn’t extend to Crimea, which reflects “the new political and legal realities.”

Airport Seized

In the Black Sea peninsula, pro-Russia forces yesterday seized Belbek airport and arrested its Ukrainian commander, Yuliy Mamchur, he said by text message. There were no injuries, he said. About 100 Ukrainian troops were forced from their Novofyodorovka base in Crimea earlier, Vladyslav Seleznyov, a spokesman for Ukraine’s Defense Ministry, said by phone.

Belbek is the main airport for the city of Sevastopol, where Russia’s Black Sea fleet is based. The main civilian airport in Crimea is in Simferopol.

Fewer than 2,000 of the more than 18,000 Ukrainian troops in Crimea have said they want to leave, Russian state-run news service RIA Novosti reported, citing the Russian Defense Ministry. Russian flags have been raised over 54 of 67 Ukrainian ships and Defense Minister Sergei Shoigu ordered his forces to allow the orderly exit of Ukrainian troops, RIA said.

Ukraine’s government, which on March 21 signed the political chapters of an association accord with the EU, discussed military cooperation with European partners, Yatsenyuk said in Kiev yesterday.

Leaders’ Meeting

Leaders of the U.S., the EU, China, Japan and other nations meet in The Hague starting tomorrow, and Obama plans to use the gathering to mobilize opposition to Russia’s incursion into Crimea.

While ruling out military action, Obama has joined European leaders in warning of further consequences if Russia fails to yield. The U.S. is focusing on diplomatic and economic tools to defuse the crisis, Rice told reporters.

The Obama administration continues debating what military aid to send Ukraine in addition to ready-to-eat meals and other non-lethal assistance, one administration official said, speaking on condition of anonymity to discuss the policy deliberations.

The EU, moving more slowly than the U.S. on sanctions, on March 21 expanded to 51 individuals its list of Russians and Ukrainians punished with asset freezes and travel bans.

Sanctions List

The U.S. the previous day widened its list of people targeted to 27 Russian officials and four Ukrainians. In addition, Obama that day authorized potential future penalties on Russian industries, including financial services, energy, metals and mining, defense and engineering.

Russia’s benchmark Micex Index of stocks fell 1 percent on March 21, the most among emerging markets, to 1,307.34 by the close, and the yield on government bonds due February 2027 jumped 12 basis points, the most in a week, to 9.42 percent.

Russia reserves the right to impose sanctions following the EU’s decision to expand its list, Russia’s Foreign Ministry said in a statement yesterday.

The ministry is proposing retaliatory steps, as “unanswered sanctions may whet appetites to impose new measures,” Deputy Foreign Minister Grigory Karasin told lawmakers.

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German court says euro zone's crisis fund is legal

The highest court in German upheld a 2012 ruling on Tuesday, confirming the legality of the euro zone's new, permanent crisis defense mechanism.

The 700 billion euro ($974 billion) European Stability Mechanism (ESM) is a crisis fund which replaced the temporary European Financial Stability Facility (EFSF). The fund issued bonds at the height of the euro zone sovereign debt crisis in 2012. The proceeds were lent to troubled countries under a bailout program.

The ruling - which was widely anticipated by market watchers - means that German taxpayers' ESM liability must be limited to 190 million euros.

(Read more: Germany willsend bond-buying program to European court)

Matthias Hangst | Getty Images | Getty Images News

The Judges of Germany's Constitutional Court

Making loans to struggling euro zone nations or buying up bonds in debt markets, this euro zone fund was initially given a fast-track ruling by the court back in 2012 after eurosceptics questioned whether it conformed to German law. Two caveats placed on the fund were that the Bundestag lower house had the powers to veto it and that it could ensure limited liability for German taxpayers. Both rulings were confirmed by the constitutional court on Tuesday.

Christian Schulz, a senior economist at Berenberg Bank told CNBC that the news was positive as there was no "additional trouble" from Karlsruhe court. "It is still an important, positive ruling because the ESM is central to the euro zone's financial stability architecture," he said.

However, although it is widely expected to be considered as legal by the constitutional court, investors were keeping a keen eye on the decision for any signs on future issues surrounding some of the ECB's crisis-fighting policy tools. In September 2012, ECB chief Mario Draghi announced the Outright Monetary Transactions (OMT) program which sought to buy the sovereign bonds of stricken euro zone members if they applied for aid.

(Read more: 'Battle lines drawn' in German court over ECB bond buying)

Draghi hasn't so far had to use the program but it has spread calm across European markets with sovereign debt yields for struggling nations receding from their peaks during the crisis. Like the ESM, the OMT had to be ratified by the court, with the German taxpayer essentially being asked to backstop other euro nations.

In early February, the German judges decided to pass the OMT case on to the Court of Justice of the European Union to take into account the views of Luxembourg. It is expected to make its own ruling in the future but no further comments were made on the likely outcome of this ruling on Tuesday. Schulz said that this would be a more important decision because the OMT has had such a major impact on markets compared to the ESM. The decision by the court to send the ruling over to Luxembourg also highlights the uncertainty regarding the OMT, he said, with the German judges taking a more negative approach than they did with the ESM program.

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Where The Rich And Famous Go For Addiction Treatment

Richard Taite is a bit of an incongruity. For the CEO of one of the world’s most successful addiction treatment facilities (financially and in treatment success rate), he’s refreshingly down-home and modest, in an industry that’s often not so. Part of his humility might come from the fact that he was an addict himself for 20 years before getting clean, becoming professionally successful, and founding Cliffside Malibu. So he understands his patients’ plights in the most intimate way.

“If you had told me twenty years ago that I would one day get sober,” Taite says, “marry an amazing woman who consistently inspires me to be a better man, have a child who is the love of my life, and become the founder of one of the leading addiction treatment centers in the world, I would have laughed in your face. Then I would have taken another hit of crack.”

In the throes of his addiction, Taite was smoking crack every day, going for a week or more without sleep, and eating a Big Mac once a week just to stay alive. He was homeless at one point, too. He ultimately managed to pull himself out of addiction in a sober living facility and a lot – a lot – of therapy. Today he says that the core issues with addiction for most people come from long held and erroneous beliefs about oneself that begin in childhood. Abusing alcohol or drugs, he explains, is often an addict’s attempt to cope with these beliefs that develop early but, unfortunately and destructively, stick around and shape us as adults. His treatment facility’s methods center around helping the patient get to the bottom of their “issues,” which has to happen first for a person to surface from their addiction.

“I’m the worst CEO on the face of the Earth, FOR SURE,” Taite jokes. Some would say he hasn’t always made the best financial decisions with the organization, spending out-of-pocket money to help clients in unconventional ways. “If,” says Taite, “you run a business like a love call, you are a ‘bad businessman.’ But you get to help a lot of people, and in the end that’s exactly why we are so successful.”

The fact that his facility looks much like a luxury resort is somewhat of an accident. He bought the house that would later become Cliffside Malibu to live in himself, and thought he would spend the rest of his life there. That did not happen, however, as the house quickly evolved into his treatment facility – the Ralph Lauren furnishings and ultra-modern flat-screen TVs that he handpicked for his own use now remain for the comfort of his patients.

“It’s funny,” says Taite. “The therapists I interviewed and who toured the site, were disgusted by having a flat-screen in every room. I said to them, ‘You want me to teach these people how to fall asleep in 30 days?’ If you’re a therapist with little experience, you don’t know addicts. An addict doesn’t know how to fall asleep: he passes out.  If I can help him pass out watching MSNBC on a big-screen TV, instead of using his drug of choice, then we’re doing pretty good.”

To be sure, treatment comes with a hefty price tag. Depending on the length of the stay, which can range from 30 to 120 days, the cost of sobriety can cost many tens of thousands of dollars. Taite has brought in the most highly skilled staff he could find to support his integrative treatment approach, he says, and has a guarantee on clients’ treatment success. “My staff are top-notch people, and they are not desensitized to the process, which is what you often find in addiction treatment. They’re here because they love what they do, and never lost that.” Taite and his team use a theory of behavior change, originally developed by Dr. James Prochaska, in their treatment, which he credits for the facility’s high success rate.

Getting into the head of an addict who’s a bigwig is a particular challenge since there is so much at stake, and so much power and ego involved. As with other individuals, helping the high-powered recover is not a switch that happens over night, it’s more like a very gradual dial, says Taite, which takes time to turn. “The exec, the CEO – he’s so successful at making money, you can’t tell him anything, you can’t talk to this guy. With the ‘dial,’ though, you can win his heart over, even if you can’t win over his head right away. He thought the first day of treatment is going to be worst day of his life, that all the fun is over. When you win his heart, you have this guy; and it’s not what he expected.”

Taite adds that at the end of the day, the goal is to create a shift in his clients’ heads so that existence “is no longer driven by the trauma, the anxiety of your past. Everything in your childhood, every story you developed when you were 8 is now running your 45-year-old life and creating wreckage. A lot of these high-functioning guys don’t have the tools; that’s why they use. Once you replace the trauma and the stories with the truth, you realize what’s real and what’s not. We addicts have a built-in forgetter, however, so you have to do constant maintenance and constant reminding.”

There is, of course, an extra degree of privacy at Cliffside Malibu because many of his patients are highly visible in their normal lives. “The fear is, ‘it can’t leak it out that CEO is a drunk and that we might lose billions in stock,’” says Taite. “These guys get a little bit of perspective while they’re here. They stop creating wreckage; they stop self-sabotaging, and start to actually begin to take in and be present for their children, their wives. And, of course, they become volumes more productive at work.”

In answer to the question of whether he has to turn people who can’t afford treatment away, Taite says, “That’s a bad deal. That’s a really bad deal. That’s why I wrote the book [Ending Addiction for Good] – because 99% of people can’t afford good treatment. This was the global way I could address that problem. We do turn people away; that’s why my staff won’t let me answer the phone, because I have a very hard time doing that. Sometimes we have to make recommendations about other places for treatment. What do you do when someone has no money?

“What I’m doing is putting something out there that has worked for us and, hopefully, based upon our reputation in the community, the directors, clinical directors or program directors of the 1150 or so nonprofit treatment centers in California and in places just like that around the country will say ‘wow, this is what they do at Cliffside Malibu, I want to try this.’” So Taite’s book was his way of disseminating the models he uses to other treatment facilities around the country, and perhaps the world. “It doesn’t cost anything to become better educated in your craft and to better serve the people who you’re charged with helping.”

As to how Taite is able continue his “love call” with the same enthusiasm with which he began, he says this: “The reason I do this every day, and continue to love it every day, is because I’ve got a three year old daughter and wife who is 42 and about to have our second baby. We got it together just in time so we didn’t miss out on that. We’ve got intense love and gratitude for something that saved our lives. I understand what successful treatment takes, because I lived it and have helped so many others achieve it. And if you know how to do something – especially treat a person for addiction – and you don’t do it… well, then you’re a fucking idiot.

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