Serious horse trading between Russia and Ukraine is underway as the Kremlin responds to Ukrainian President Volodymyr Zelenskiy 20-point peace plan (20PPP) submitted to the Kremlin on December 24.

Encouragingly, the Kremlin’s objections to the 20PPP are largely secondary points on the various lists that kicked off with the 28-point peace plan (28PPP) otherwise known as the Witkoff-Dmitriev plan, named after its reported authors, US Special Envoy to the Middle East Steve Witkoff and the head of Russia’s sovereign wealth fund, Kirill Dmitriev.

Moreover, it appears none of the suggestions made by the EU, in its various suggestions, including a 24-point peace plan (24PPP) floated by European Commission President Ursula von der Leyen following the Geneva summit on November 23, are under discussion or part of the currently back-and-forth between the Kremlin and Bankova (Ukraine’s equivalent of the Kremlin). Most of the EU suggestions were deal-breakers and “unacceptable” to the Kremlin, according to Yuri Ushakov, Putin’s top foreign policy advisor. Both the Kremlin and the US team have completely cut the EU out of the negotiations.

Ukrainian President Volodymyr Zelenskiy submitted a counter offer to the Kremlin including 20 points after intense talks with the US envoys at the Berlin meeting on December 14-15 and the Miami meeting on December 20-21, highlighting Ukraine demands.

Encouraging, as bne IntelliNews reported, the latest 20PPP includes several important concessions, including an offer to cede land to Russia in the Donbas. Both sides are now seeking a formula that would allow Ukraine to give up territory, without admitting to a formal withdrawal by the AFU from the 15% of territory not occupied by Russia in Donetsk, one of the two regions in Donbas.

The 20PPP plan was submitted on Christmas Eve and an answer was expected until Christmas Day, but in an initial reaction, the Kremlin listed points it has a problem with in the new list.

The fact that the Kremlin responded so quickly and so specifically strongly suggests that serious horse trading is underway and that a workable deal could be close. Both Russian President Vladimir Putin and US President Donald Trump are in a rush to do a deal before the end of the year, otherwise the US could walk away from Ukraine and Putin has promised to end the conflict by force if no compromise is found soon.

Russia is seeking significant revisions to a proposed US-backed peace plan, demanding stricter curbs on Kyiv’s military and firmer guarantees over Nato expansion, according to a person close to the Kremlin, Bloomberg reported on December 23.

Moscow is said to be dissatisfied with what it views as vague provisions in the current proposal, particularly regarding the future security posture of Ukraine and its potential path towards EU membership.

The source stated that Russia opposes the absence of “guarantees for Nato's further eastward expansion and Ukraine's neutral status should it join the European Union.”

The 20PPP does not include comments on Ukraine’s Nato membership, but in separate comments in the last day Zelenskiy has kept that door open.

The 20PPP draft plan, which has not been made public in full, has reportedly gained momentum among some Western allies, but Russian officials have expressed frustration that it does not include restrictions on the size and capability of Ukraine’s post-war armed forces.

The Kremlin is also insisting on guarantees for the status of the Russian language and the freedom of the Russian Orthodox Church to operate in Ukraine, politically charged issues that have featured prominently in Moscow’s justification for its invasion.

In addition to security concerns, Russia is demanding “clarity on the lifting of sanctions and the hundreds of billions of dollars of Russian state assets that remain frozen in the West,” the person said.

Roughly $300bn in Russian central bank reserves have been immobilised by the US and its allies since the start of the full-scale invasion in February 2022. The EU tried to mobilize those assets with the Reparation Loan last week at the European Council (EUCO) summit on December 18 but the vote on the Reparation Loan failed and the EU voted to raise €90bn for Ukraine by collective borrowing separately. However, Brussels has invoked Article 122 of the EU’s founding treaty that grants emergency power to permanently ringfence Russia’s money for possible future use. European Commission President Ursula von der Leyen said last week that the money will not be returned to Russia unless it first pays reparations for war damage.

While the US has not commented publicly on the latest Russian demands, Washington has maintained that any settlement must uphold Ukraine’s sovereignty and territorial integrity.

The Kremlin is expected to make a fuller response to the 20PPP plan on Christmas Day, a regular working day in Russia, which celebrates Christmas on January 7 as it still uses the Julian calendar for religious festivals.