I spent the day speaking at Davos at Ukraine House, listening then to Zelensky’s speech and talking with various Ukraine related contacts.

Here are some observations.

One overwhelming impression from those I met was that while there was great anticipation last year at the WEF that Trump could deliver a peace in Ukraine - he had leverage over Putin and the hope was that he could use his famed “Art of the Deal” - this year the mood was downbeat. I guess the deal that Trump promised in 24H, 100 days, by Easter, then Christmas, et al has proved elusive. Ukrainians are also having to cope with brutal attacks on critical infrastructure which have damaged heating, water et al, and the winter is brutal. And Trump has failed to supply Ukraine with sufficient air defence missiles.

Zelensky spoke at the WEF after meeting Trump. His speech was tough, diplomatic but you could understand the frustrations with the weak Europeans, and with Trump who, despite having the power to force Putin to the negotiating table, has pulled his punches. Zelensky has to be diplomatic with Trump, as Ukraine still desperately needs US munitions to help defend its skies against the constant onslaught of Russian missiles and drones.

Some time in the future we are likely to hear what Zelensky, and other Western leaders, really think about Trump. That will be enlightening. One thing for sure though, he will not be referred to as “daddy”!

There were hopes that the big $800 billion peace time investment programme would be signed off by Zelensky and Trump this week, but the focus on Greenland and I sense also doubts whether the EU will sign off on Ukraine’s early EU accession - talk of 2027 - likely stalled that.

Let’s face it, $800 billion is pie in the sky for Ukraine, without an EU accession anchor and security.

Zelensky appeared particularly critical of the EU in his speech and perhaps that reflects EU foot dragging on the early EU accession bid. That is a big decision for the EU, and there seems to be an entrenched camp that thinks allowing Ukraine to jump the queue would set a dangerous precedent. It’s shame that those same EU blocking forces are not appreciative enough of the huge sacrifices being made by Ukraine in defence of Europe and European values.

On the security issue Zelensky noted that a deal had been agreed with the US, but not signed. My sense is that this fell well short of Ukrainian expectations - the US likely committed only to provide some intelligence and monitoring of any ceasefire with only a very limited military backstop either for Ukraine or the potential Coalition of the Willing forces on the ground. Ukraine I think resigned itself to that is what it is, and rather than walking away from talks, and losing munition supplies during the war, it has gone along with what is on offer - if that is the best that the U.S. is willing to accept, then something is better than nothing.

But concrete security guarantees are key if Ukraine is going to agree to concede any more territory to Russia as part of any peace deal - it would be impossible to sell any such deal domestically in Ukraine without that security backstop. And I sense this deal lacks sufficient a security backstop. And even then, post the Greenland spat, can Trump be trusted at all?

Having concrete security guarantees is also critical as noted above for the success of this $800 billion post war reconstruction plan/fund for Ukraine.

I think the Trump view is that the prospect of investment deals scan solve anything, and that a free trade zone in Donbas, will pull in investment making both Russia and Ukraine focus on doing business not war. This fundamentally fails to understand the emotions behind the war. For Putin this is not about business, but his obsession with bringing Ukraine to heel under the Russian yolk. For Ukrainians it is defending their land and their identity and very existence against a campaign of genocide waged by Russia.

And without proper security guarantees - which can only be provided by the USA - Iittle investment will flow to Ukraine, and certainly not $800 billion.

Again Ukraine is going along with all this because it has little choice but to appear willing in negotiations, so as to keep the munitions supplies coming from the US.

Zelensky knows though that any deal which envisages the surrender of its frontline fortresses in Donbas, with limited security guarantees, and no firm EU accession anchor will be very difficult to sell at home. It’s perhaps why he is saying that any deal will have to be signed off by the Rada - constitutionally it will need to be. But I fear here that a bad deal will destabilise Ukraine, with a risk of social and political unrest, even a coup.

Witkoff and Kushner jetted off to Moscow tonight for talks with Putin and seemingly three way talks are scheduled now later in the week in UAE, with Russia and Ukraine attending.

There is some optimism in the market now that Putin will give the green light and that we might be approaching the final straight in peace talks.

I have my doubts.

Putin has thus far resisted Trump’s efforts for an early end to the war - including the Anchorage trip. All the messaging is that Putin thinks that Ukraine might be on its last legs - and his latest barrage of Ukrainian critical infrastructure might be the last blow. Likely he also looks at events in Davos this week, over Denmark, and he sees weakness and division in NATO. I would think he thinks that if he holds out just a little bit longer that he can secure his maximalist demands on Ukraine. And in Trump he has a counterpart who has shown a reluctance to impose any real signficant cost on Russia. Trump has had the cards and has not used them - we can debate why. Likely Putin thinks that Trump will tire of Zelensky and Ukraine because ultimately the US needs Russia more for its ultimate hegemonic battle with China. Putin will see in Trumps actions that he bullies the weak and panders to the strong. He thinks Trump will ultimately pull support for Ukraine and get back to doing business with Russia. And Trump’s billionaire bros who made a killing from globalisation but are not the clarions of MAGA - smelling yet more money - are egging him on their. The emperor really has no clothes.

Putin likely sees a big deal with Trump and the US, a deal that he will need to turn the Russian economy around and likely create enough of a feel good factor that can help satisfy the great expectations of the millions of Russian war veterans returning home and who will be asking what this war achieved. Putin needs a big win in Ukraine, or with a big business deal with Trump and the US to justify the enormous losses to Russia from this war. Arguably the lowest risk strategy for Putin is continue the war, keep up the war economy and the propaganda machine that tells the Russian population to stand firm in the face of Western aggression. Once the war stops, the ability to keep up this facade weakens and Putin would then be vulnerable to internal fissures - as ultimately brought the collapse of the USSR after the failed Soviet intervention in Afghanistan.

An alternative view might be that Putin might think that if he can get Trump to force a bad deal down the throat of Zelensky, it will destabilise Ukraine so much as to produce scope for a further and decisive assault on Ukraine. Such a phoney peace push would also destabilise NATO, putting European NATO further on the back foot and bolstering the position of Trump. Putin might then think that with NATO dead, that Trump might reward Russia for agreeing a deal on Ukraine, with an alliance then against China. Putin would still use this for further attacks on Ukraine.

Bottom line here, there is no scenario in my mind where Putin leaves Ukraine alone, as he has zero interest in a succesful and independent Ukraine. Trump has no clue on this, it’s beyond his mental capabilities. He just thinks everyone is like him and it’s all about “me, dollars, gold and Bitcoin”. Not for Putin, it’s emotional and personal on Ukraine. He will never tire of trying to screw Ukraine unless he is defeated or the costs for his malign action against Ukraine are increased so much as to make him back off. Trump has shown zero understanding of Putin, and zero inclination to impose any pain on Putin.

The future for Ukraine looks bleak at this point in time - a choice between a bad, and ultimately unsustainable peace, or an extended war.

Timothy Ash, the senior sovereign strategist at BlueBay Asset Management in London. This blog first appeared in his substack here. Subscribe here.