Ukraine: Reaching a Limited “Minsk II” Ceasefire Accord

Published on February 10, 2015
SGH Insight
"And from the few signals we pick up from Moscow, we believe a cease fire agreement can indeed be reached."
Market Validation
(RT 02/12/15) "The MICEX index hit 1,805 points, its highest level since April 2011. The ruble, which has lost more than 50 percent against the dollar in the last year, improved 3.6 percent to 64.65 per 1 USD. Before the talks, it dropped nearly 3 percent against the dollar on the worry a deal wouldn’t be struck."

German Chancellor Angela Merkel met yesterday with US President Barack Obama to press Washington to back off from recent calls, started in Congress and subsequently affirmed as a possibility by the State Department, to authorize the supply of lethal arms to Ukraine in its ongoing war against the Russian-supported Donbas rebels in the east.

Despite those appeals, Obama kept the option of lethal military assistance to Kiev on the table yesterday, even as the two leaders downplayed any disagreement between the allies in their approach to negotiations with Russia.

*** The Obama administration, we believe, will nevertheless hold off on authorizing an escalation of assistance to include the provision of lethal arms supplies to Ukraine, and most certainly until after seeing the results of what has been pitched as tomorrow’s “last effort” diplomatic summit in Minsk between Merkel, French President Francois Hollande, Ukrainian President Petro Poroschenko, and Russia’s President Vladimir Putin. ***

*** And from the few signals we pick up from Moscow, we believe a cease fire agreement can indeed be reached. Our understanding at this point is that the more ambitious diplomatic objective for tomorrow’s summit of a comprehensive solution on Ukrainian regional autonomy and a durable agreement between Russia, the Ukraine, and the EU for a de-escalation of the conflict have been all but scrapped. The hope now is simply to finally get agreement, and most importantly implementation, of a 50 kilometer cease fire safety zone between combatants. ***

*** With the rebels now in control of a larger swathe of territory than at the time of last year’s failed Minsk agreement, a cease fire agreement now acknowledging those de-facto territorial borders is seen to be more favorable to them and to Russia than the original one. In return, for Kiev and the West, the major distinction this time around if an agreement can be reached at tomorrow’s summit would be the explicit inclusion of Moscow as a signatory to the treaty. ***

The original Minsk agreement was drawn-up between July and September of last year by the Trilateral Contact Group on Ukraine, which consisted of representatives from Ukraine, Russia, and the OSCE with the participation of informal representatives of the breakaway Donetsk and Luhansk People’s Republics. Russia was not a signatory but was represented by its Ambassador to Ukraine, Mikhail Zurabov. That will no longer be the case.

A cease fire would provide some badly needed diplomatic breathing space for the EU and IMF to move forward on financial assistance discussions with Ukraine. With little to no appetite for any fresh infusion of money from the EU, a deficit of trust towards the Kiev authorities, and only modest assistance forthcoming from the US and IMF, those negotiations are sure to be contentious.

Lowering the Objectives, Keeping the Threats

In an unusually impassioned, emotional plea over the weekend at the Munich Security Conference, Merkel, backed by her Minister of Defense Ursula van der Leyden, made it clear that Germany stood steadfastly opposed to a further militarization of Ukraine, and with it a direct escalation and engagement by the West with what are clearly now Russian proxy forces.

In that she was resolutely joined by key conservative ally, British Prime Minister David Cameron.

But with all previous cease fires lasting little longer than for the ink they were signed with to dry, it is almost certain Washington will, even if an accord is reached tomorrow, keep the threat of an escalation of military support in place over the objections of the EU partners.

And in light of sharply mounting domestic criticism of its stated foreign policy doctrine of “strategic patience,” even if it wanted to the Obama administration is not politically in a position to fully back off the threat of further escalation in the near future, especially given the low odds of a deal that would show any material progress on the more substantial political issues at hand.

But a cease fire would be a start, and allow for any threat of further escalation to be put on hold, at least for now, even as the longer term strategic goal of moving beyond a “frozen conflict” to an actual de-escalation appears to be far more elusive. The fifty kilometer zone is of course intended to put the conflict zone out of the range of the current limits of artillery shelling.

The tactical objective at this point is to freeze what has been a rapid escalation of hostilities beyond the Donbas into the key railway junction of Debaltseve, and more ominously keep it from threatening to spill over into the corridor connecting the eastern regions of Donetsk and Luhansk to Russia’s protectorate in the Crimea.

As to Crimea, it is increasingly clear to planners in Moscow that the logistics behind the hoped for construction of a bridge from the mainland of Khersk across the Sea of Azov to connect with the Crimean peninsula are far more formidable than initially thought. That only reinforces suspicions that Russia may seek to establish a supply corridor from the mainland and Donbas to Crimea through Ukrainian territories including Mariupol.

The threats from both sides will thus remain in place; we were for example reminded today somewhat ominously that there have been no attack helicopters used to date by the rebel forces. And all that could change if an open cold war style arms race were now to break out in in the area.

But in the meantime, Moscow appears to us to be willing to take a pause.

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