As Stratfor wrote in Monday's Geopolitical Diary, a lot of pieces are in play this week in wide-ranging negotiations between the United States and Russia. Tuesday brought possible movement on one particularly thorny issue: Ukraine. On Jan. 19, an official from the Donetsk People's Republic said the pro-Russia separatist territory was open to compromise on the issue of local elections in Donbas — a key sticking point in the implementation of the Minsk agreement. Denis Pushilin, who will represent the Donetsk People's Republic at the next contact group meeting with Ukraine and the Organization for Security and Co-operation in Europe (OSCE) on Wednesday in Minsk, said his side "has to make concessions." However, he urged the Western-backed government in Kiev to do so as well, concluding that "something may work out then."
Statements like this can be interpreted as empty rhetoric, especially since fighting between Ukraine's separatists and security forces has intensified in recent days. Yet there are several reasons to take Pushilin's statement more seriously than usual, all of which are tied to recent developments related to the broader negotiations between Washington and Moscow.
One such development was a surprise meeting between U.S. Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland and Russian presidential adviser Vladislav Surkov on Jan. 15. Nuland, who is in the middle of a tour of Lithuania, Romania, Bulgaria and Turkey, was not originally scheduled to meet with Surkov. Still, she flew to the border of Lithuania and the Russian exclave of Kaliningrad to hold talks with the Russian official, who is on the U.S. and EU sanctions lists. These talks, which reportedly lasted for four hours, have been the focus of much media speculation. Several pundits and analysts have claimed the meeting produced a "secret deal" between the United States and Russia over the Ukraine conflict. The details of what this deal would entail have varied from source to source; some outlets claim Donbas would formally be part of Ukraine's territory but would be given special status and allowed to conduct its own foreign policy, while others report that Russia would concede on granting Ukraine control of its border with the separatist territories. The Russian media's emphasis on the U.S.-Russia negotiations concerning Ukraine could be an attempt to shape future talks and drive a wedge between Washington and Kiev by leading Ukraine to think the United States is making deals behind its back.
Chance for a Compromise?
These reports should be met with a large dose of skepticism; they have not even been attributed to unnamed Ukrainian or Russian officials, much less confirmed publicly by either Kiev or Moscow. However, the Nuland-Surkov meeting did coincide with other developments that could be interpreted as signals that both Russia and the West want to break the negotiation process out of its current stalemate. For instance, Moscow appointed Boris Gryzlov as Russia's new representative to the Minsk contact group talks at the beginning of the year. Gryzlov is known as a levelheaded security heavyweight in the Kremlin, and his appointment could be a sign that Moscow is taking this format of negotiations more seriously and perhaps more constructively than before. Meanwhile, the European Union has been making more frequent calls for Kiev to follow through with its end of the Minsk agreement implementation. In recent days, the bloc has been more vocal in asking the Ukrainian government to make constitutional changes that would grant greater autonomy and local decision-making to the areas currently under separatist control.
Another factor that could be raising interest in finding a compromise over Ukraine is the state of the Russian economy. The drop in oil prices has hit the Russian economy hard, and the expectation of sustained low oil prices is putting Moscow in a precarious position. The U.S. and EU sanctions against Russia are not nearly as much of a factor in the decline of the Russian economy as the fall in oil prices. But getting the sanctions lifted becomes more important as Russia's budget revenues shrink and the Russian deficit and ruble volatility grow. This situation could be the most important factor driving the recent uptick in diplomacy between the United States and Russia, especially since some European countries, including Germany and Italy, want to move toward a deal that would end a volatile conflict on the European Union's eastern periphery and lift the sanctions that have harmed their economies.
Although these circumstances could indicate progress toward an agreement over Ukraine, the obstacles to a deal will be extremely difficult to overcome. Kiev is caught between pro-Russia separatists and far-right nationalist groups; because the Ukrainian government is already weak, it risks complete collapse if it moves too far in either direction. At the same time, the Minsk agreement remains subject to different interpretations by Ukraine and the West, on one hand, and the separatists and Russia on the other. In Ukraine's view, Russia must relinquish control of its border with the separatist territories and allow OSCE observers to access those territories before it makes any political concessions. Meanwhile, Moscow and the separatists see constitutional changes and greater autonomy for Donbas as prerequisites for serious movement on the security front.
It is this difference in interpretation — along with Russia's underlying geopolitical imperative to establish a buffer space in the former Soviet periphery and the U.S. imperative to deny Russia that buffer space — that so far has prevented a resolution to the nearly two-year conflict. Some signs are emerging that there could be a greater willingness to break the current deadlock on more sensitive issues. Furthermore, potential movement on the Minsk agreement could facilitate military coordination in Syria, especially with Washington working to mediate between Russia and Turkey. (Stratfor sources have indicated that the United States probably will be carrying a message from Russia when Nuland and U.S. Vice President Joe Biden visit Istanbul later this week.)
All of this is not to say that a breakthrough is looming. Too many factors are still contributing to the prolonged standoff. However, these signs will make the negotiations between Washington and Moscow particularly important to watch in the weeks ahead.
