• Bloomberg


Angela Merkel and Francois Hollande will press Vladimir Putin for a cease-fire in Ukraine on Friday as U.S. and Russian officials expressed skepticism that a quick resolution to stem the spiraling violence is possible.

After meeting Ukrainian President Petro Poroshenko on Thursday, the German and French leaders head to Moscow on Friday to present an alternative to a peace proposal drawn up by Putin that laid separatist claim to swathes of eastern Ukrainian territory. The U.S is also working to “change Russia’s behavior,” said Secretary of State John Kerry, who also met Poroshenko in Kiev, though President Barack Obama’s administration said a deal may be tough to achieve.

“We have seen the Ukrainian government live up to a lot of those agreements and at least try to implement them,” White House Press Secretary Josh Earnest said Thursday. “But those efforts have been entirely undermined by Russian-backed separatists with the full support of Russia completely ignoring those commitments.”

Even as Russia, the U.S. and European Union states call for a truce after a new offensive by separatist forces, the standoff between Putin and his country’s former Cold War foes is intensifying as the warring parties pour more troops and firepower into the conflict. The war is also pummeling Ukraine’s economy. The hryvnia plunged 31 percent Thursday after the central bank loosened its management of the currency.

As the rebel advance triggers calls for an immediate truce to evacuate civilians from the conflict zone, Poroshenko has appealed for arms to fight what his government labels a war of “Russian aggression.” Merkel has rejected the idea of providing lethal assistance and Obama has remained skeptical.

Poroshenko hosted the European leaders for dinner in Kiev, and said the meeting gave “hope for a cease-fire,” according to the presidential website. The contents of the Hollande-Merkel plan are being kept secret. A French official said that while new sanctions aren’t currently on the agenda, they can’t be ruled out. The official spoke on condition of anonymity because he’s not authorized to talk to the press.

The proposal follows a plan put forward by Putin, that, according to a Western diplomat who spoke on the condition of anonymity, advocates creating a territory similar to the frozen-conflict areas of Abkhazia or Transnistria — breakaway provinces of Georgia and Moldova that enjoy Russian patronage.

The offer backs away from a pact agreed on Sept. 5 in Minsk, Belarus that calls for a cease-fire, creating a buffer zone between the adversaries, withdrawing heavy weapons from the front line, monitoring Ukraine’s border with Russia, and other actions, the diplomat said.

Following a meeting with Kerry, Ukrainian Prime Minister Arseniy Yatsenyuk said Russia must adhere to the agreement before a new truce can be forged and Ukraine insists on maintaining its territorial integrity.

At the same time, Putin and other officials are losing faith that their preferred outcome — greater autonomy for the Donbass region within a federal Ukraine — will come to pass, according to three people familiar with the matter who asked not to be identified because they aren’t allowed to speak publicly about the discussions. It’s increasingly likely the rebel-held regions will break away, according to three people familiar with the matter, they said.

“I don’t see a compromise,” Joerg Forbrig, senior program director for central and eastern Europe at the German Marshall Fund of the U.S., said by phone. “Ukraine will accept nothing less than the demilitarization and full administrative control over the east, and won’t accept the federalization that the Russians are demanding.”

Ties between Merkel and Putin, who have spoken about 70 times since the conflict erupted, hit a low in Brisbane, Australia, last year when the German leader pointed out places on a map that she saw as targets of Russian meddling, according to a meeting participant who asked not to be named because the talks were private. Putin insisted he’s encircled by U.S.-led powers and isn’t seeking expansion.

Merkel, who will visit Moscow for the first time since the violence flared in 2013, opposes supplying Ukraine with weapons “because Russia would react with military steps and we would find ourselves in a spiral of violence,” German Ambassador to the U.S. Peter Wittig said Thursday.

The U.S. should provide lethal and nonlethal assistance to Ukraine, top lawmakers of both parties on the Senate Armed Services Committee said on Thursday, and Obama’s nominee for defense secretary said Wednesday he could support such a move.

Obama will decide on the issue “soon.” Kerry said in Kiev, adding however that the U.S. isn’t “interested in a proxy war” with Russia.

Still, there’s little the Obama administration can do to deter Putin for supporting a push by separatists to grab and hold territory, four U.S. military and intelligence officials and diplomats in Washington said on condition of anonymity to discuss internal deliberations and international talks.

The officials, who expressed skepticism that Putin will back down in the face of increased U.S. and EU economic, or even military, pressure, said they’re increasingly convinced he won’t settle for less than control of Donbas, an area that includes the contested Donetsk and Luhansk regions.

Russia denies Ukrainian, U.S., EU and NATO allegations that it’s fueling the insurgency to pressure its neighbor, a key energy transit hub. Yatsenyuk said Thursday Russia is the world’s only country that denies Putin has sent weapons and troops into Ukraine. The conflict has killed at least 5,358 people and wounded 12,235, the United Nations estimates.

The railway crossroads Debaltseve is the scene of the fiercest fighting, although both the Ukrainian military and the rebels are building up positions along the entire front line stretching across the country’s easternmost regions to the Sea of Azov. EU foreign policy chief Federica Mogherini called Wednesday for an immediate, three-day cease-fire to allow evacuation. The humanitarian situation is complicated by harsh winter weather and power and gas outages across the combat zone.

“The situation in Ukraine is so serious, it’s becoming worse,” NATO Secretary-General Jens Stoltenberg said at a defense ministers’ meeting in Brussels. “It’s moving in the wrong direction.”

Putin also has economic leverage on Ukraine, with Russian Finance Minister Anton Siluanov saying his country may demand repayment of a $3 billion bond at “any minute.”

That may complicate efforts by Ukraine to restructure its sovereign debt, which Finance Minister Natalie Jaresko said the government in Kiev may seek after finalizing a new aid program with the International Monetary Fund in the coming days.

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