Kremlin extends Ukraine olive branch

By bne IntelliNews May 7, 2014

Ben Aris in Moscow -


Russian President Vladimir Putin extended an apparent olive branch on May 7, as he announced he will respect the presidential elections planned in Ukraine for May 25, called for secessionist militia in the Donbass region to postpone a planned referendum on independence, and claimed Russian troops have been pulled back from the border.

"We have to do everything so that people in Ukraine's southeast will be confident that their rights, their lawful rights, after the presidential election on May 24 or 25, will be firmly guaranteed," Putin told the Kremlin journalist pool.

The comments came after a meeting with Swiss President Didier Burkhalter, who is currently heading the Organization for Security and Cooperation in Europe.  Burkhalter said the OSCE will soon propose a "road map" to defuse the Ukraine crisis.

Putin also claimed Russian armed forces have pulled back from the country's southwest border with Ukraine. "We're always being told that our forces on the Ukrainian border are a concern. We have withdrawn them. Today they are not on the Ukrainian border, they are in places where they conduct their regular tasks on training grounds," he said.

Nato claimed in March that as many as 40,000 Russian troops were camped close to the borders with Ukraine's restive eastern regions. Their presence has clearly encouraged seperatist militia in taking on the authorities in Kyiv, with several calls for Russian "peacekeepers" having been made in recent weeks. Therefore, if confirmed, the standing down of the Russian army would represent a major de-escalation of tension, and likely open the way for negotiated talks to bring the conflict to an end.

Putin has been playing from the baseline for the last few weeks, doing little more than sending Foreign Minister Sergei Lavrov to spar with his opposite numbers. The West has hit a bus load of politicians and businessmen with sanctions. But Putin statements are a high ball out of the blue that has landed squarely into the middle of the US and EU's court.

The international community has a simple choice. Either catch the ball and walk to the net in an effort to end the game, or smash it back. The pragmatists would argue that a four-way deal, which takes account of Russia's interests in Ukraine into account, is needed. The ideologue would argue that Ukraine can ignore Russia and push ahead with its presidential vote and total reorientation to the West.

What is at issue here is just how committed is Washington to the Cold War policy of containing Russia? Putin's offer is possibly the last opportunity for the two sides to end the cycle of attack and retribution, a spiral down into the abyss of bloody civil war. If the White House rejects Putin's offer to negotiate then the Kremlin will, with some justification, be able to claim that America is pursuing an aggressive policy designed to contain Russia at any cost – and that cost will be measured in Ukrainian blood.

Confusion and betrayal

It was going to be a tense weekend. On May 9, Russia celebrates defeat of the Nazis on "Victory Day". The annual parade on Red Square has long been use to buff national pride, but it has a specially poignancy this year, as the Kremlin accuses the interim government in Kyiv of being stacked with fascists.

The big event however was the seccession vote in Donbass. The West seems willing to let Crimea go, but loosing the heavily industrial eastern regions to Moscow would be a bridge too far, gutting Ukraine's economy of some of its few profitable businesses and resources.

However, Putin called for a delay. "We call on the representatives of south eastern Ukraine, the supporters of the federalisation of the country, to postpone the referendum planned for May 11," the president said.

That about face in Moscow reportedly sent pro-Russian fighters in eastern Ukraine into disarray. Some complained they felt betrayed after their colleagues had laid down their lives in the fight for control of the towns and cities in the region. One separatist told Buzzfeed: "It's difficult to comment. I'm confused."

The leader of the self-proclaimed Donetsk Republic, Denis Pushilin, told The Moscow Times   a final decision on temporarily delaying the vote would be made on May 8. However, he stressed that the referendum would eventually go ahead. "The referendum will definitely take place before the presidential election on May 25 no matter what. We do not want to legitimize the illegal government in Kiev," he insisted.

Perhaps Putin realised the logical inconsistency of recognising the results of the Donbass referendum. With no pro-Russian candidate likely to stand a chance, Moscow has clearly been preparing to reject the result of the presidential elections on the grounds that Ukraine is in the midst of a virtual civil war.

Window of opportunity

However, the gesture is a key moment in the ongoing struggle over Ukraine. He has opened a week's window in which it may be possible to broker a settlement and so overtake any efforts by the residents of the would-be Donbass Republic to leave the rest of the country. This is possibly the last chance to find a negotiated peaceful settlement to the clash between Washington and Moscow (with Brussels and Berlin being dragged along by the riptide).

However, by the time of writing neither the White House nor Brussels had responded. Ukraine's interim Prime Minister Arseniy Yatsenyuk however immediately expressed skepticism, calling the comments "hot air," according to Reuters.

The market reaction was also quick. Russia's RTS index soared 6% as Putin's comments emerged, as investors piled into the heavily oversold market in the hope that Russia Inc would soon be back in business.

With Putin having punted the ball into Washington's court, all eyes will be on the US for its response. Time is short as the situation on the ground remains very tense. The Russian army may have been withdrawn from the border area, but most of the actual fighting has been done by pro-Russian insurgents, that appear to have been armed by Russia with sophisticated weaponry.

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