Opinion

Anatole Kaletsky

Why this Ukraine ceasefire will stick

Anatole Kaletsky
Sep 19, 2014 16:34 UTC

A boy sits on an APC as he poses for a picture during a parade in Luhansk, eastern Ukraine

The war in eastern Ukraine, which has had more impact on the European economy than any news coming out of Frankfurt or Brussels, appears to be ending. Despite the sporadic attacks that have wrecked previous ceasefire attempts.

Investors have mostly assumed that the ceasefire would not hold, either because Russian President Vladimir Putin is deceitful and greedy for more territorial conquest, or because Ukraine’s President Petro Poroshenko would not accept the splintering of his country that Russia demands. But this fashionable pessimism is probably wrong.

The ceasefire no longer relies on good faith or benevolence but on a convergence of interests: Putin has achieved all his key objectives, and Poroshenko recognizes that trying to reverse militarily the Russian gains would be national suicide.

Admittedly, there is still a “party of war” in Kiev, seemingly led by Prime Minister Arsenyi Yatsenyuk, who has called on the North Atlantic Treaty Organization to back his country in an all-out war with Russia. But this week’s vote in the Ukrainian Parliament on temporary autonomy for the rebel regions suggests that most of the country’s politicians have abandoned hope of winning a war with Russia. They also understood that Western military assistance is not coming.

Ukraine President Poroshenko speaks after his meeting with Obama in WashingtonThis may sound like a grimly defeatist analysis. Yet a modest victory for Russia was actually the least bad outcome to be expected — given that there was never any chance of economic sanctions stopping Putin, for reasons explained here in March. There are several good reasons to welcome the incipient Ukraine deal:

China-Russia is a match made in heaven, and that’s scary

Anatole Kaletsky
May 22, 2014 17:27 UTC

putin-li

Check-mate.

As Russian President Vladimir Putin signed Russia’s historic $400 billion gas-supply agreement with China, he must have felt the satisfaction of a chess grandmaster revealing the inexorable outcome of a complicated endgame.

In theory, the next phase of the chess match between Russia and the West in Ukraine will only begin with the Ukrainian presidential election on Sunday. But Putin’s positioning of the pieces means the outcome is pre-ordained, no matter who emerges as the next president in Kiev.

putin & troopsNo wonder the Russian stock market and ruble have both rebounded — with the MSCI Russia index gaining 20 percent in dollar terms since its low point on March 14.

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