Merkel, seeking firm line with Russia, meets Poroshenko

March 16, 2015

Ukraine's President Poroshenko addresses the commemoration for people killed in anti-government protests in 2014 in Kiev

German Chancellor Angela Merkel meets Ukrainian President Petro Poroshenko in Berlin.

Ahead of his visit, Poroshenko told Germany’s Bild newspaper that pro-Russian separatists are repeatedly violating the ceasefire in eastern Ukraine and called for additional sanctions against Russia for violating the truce.

At a summit in Brussels later in the week, European Union leaders will discuss the sanctions imposed on Russia’s financial, energy and defence sectors last July.

Germany and other countries want the EU to make clear sanctions on Russia will not be eased unless Moscow complies with the Ukraine ceasefire deal, officials said on Saturday. But with an uneasy ceasefire in place, neither is there any appetite for tougher measures against Moscow.

Moscow was ready to put its nuclear forces on alert to ensure Russia’s annexation of Crimea from Ukraine last year, President Vladimir Putin said in a pre-recorded interview aired on Sunday.
Putin has not been seen in public or on live television since March 5, prompting a wave of speculation despite the Kremlin’s insistence that he is operating as normal.

The independent news broadcaster Dozhd said the Kremlin had declined to comment on its report that Putin had not been in Moscow but at his Lake Valdai residence for the last several days. An Austrian newspaper reported that Putin was suffering from back problems and that a Viennese orthopaedic expert had travelled to Russia to treat him.

After securing the first $5 billion from an IMF programme worth $17.5 billion, Kiev is pursuing a debt restructuring with its bondholders to the tune of $15 billion.

The government said at the weekend that the process would involve principal writedowns as well as maturity extensions and coupon reductions. Russia, which holds $3 billion of Ukraine bonds maturing in December has said it will not play ball and private creditors may also fight a rearguard action.

There are a clutch of European Central Bank speakers today including President Mario Draghi and chief economist Peter Praet.

The ECB will also put out its first figures on bond-buying with new money after completing the programme’s first week. The scheme has had an instant impact. Euro zone bond yields are at record lows nearly across the board and the euro fell as low as $1.0457 in Asian trade, its lowest since January 2003.

The United States and five other major powers — Britain, Germany, France, China and Russia – are set to resume negotiations with Iran in Lausanne, Switzerland. They hope to clinch a framework agreement on its nuclear programme by the end of the month.

U.S. Secretary of State John Kerry said over the weekend he hoped “in the next days” it would be possible to reach an interim deal with Tehran if it can show that its programme is for peaceful purposes only. If an outline deal is struck by the end of March, a final accord would then be negotiated by June 30.

Kerry will meet Iranian Foreign Minister Mohammad Javad Zarif today and EU foreign policy chief Federica Mogherini hosts talks with the foreign ministers of Iran, France, Germany and Britain in Brussels as part of negotiations later in the day.

Reuters reported last week that the six powers and Iran have begun talking about a possible draft resolution to endorse any future deal and address the lifting of U.N. sanctions. The U.N. penalties could be eased quickly in the event of an agreement, Western officials said.

The Turkish central bank’s hand must be strengthened by increasing its credibility, Finance Minister Mehmet Simsek said on Saturday. The Turkish lira has lost more than 10 percent of its value against the dollar this year over concerns of political interference in central bank policy with President Tayyip Erdogan labeling opponents of lower interest rates as traitors.

Iraqi forces and mainly Shi’ite militiamen battling to wrest control of the city of Tikrit from Islamic State militants have paused their offensive as they await reinforcements. The Kurdish government said it had evidence IS used chlorine gas as a chemical weapon against Kurdish peshmerga forces.

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