Russian President Vladimir Putin held a rare midnight press conference on May 10 and called for direct talks between Russia and Ukraine in the Istanbul format, as the key EU members of the coalition of the willing met Ukrainian President Volodymyr Zelenskiy in Kyiv and threatened Russia with new extreme sanctions if Russia didn’t implement a proposed 30-day ceasefire immediately. (video)

US President Donald Trump proposed a 30-day ceasefire in hostilities in March after the peace talks kicked off in Riyadh on February 18. Ukrainian President Volodymyr Zelenskiy immediately and unconditionally agreed, but Putin agreed only in principle, provided a long list of conditions was first met. Now the EU leaders are insisting the ceasefire start immediately without conditions.

“So, all of us here, together with the US, are calling Putin out. If he is serious about peace, then he has a chance to show it,” British Prime Minister Keir Starmer told a press conference in Kyiv over the weekend. “No more ifs and buts, no more conditions and delays.”

Putin, fresh from celebrating the Victory Day parade in Moscow on May 9 with a bevy of foreign leaders, attempted to head off a fresh clash with the West and called in the Moscow press corps for a midnight meeting to propose a new round of talks in Istanbul, following on from the failed 2022 Istanbul peace deal.

He proposed restarting direct talks with Ukraine in Istanbul on May 15, "without preconditions," and that he intended to call Turkish President Recep Tayyip Erdogan on May 11 to discuss the idea.

“We’re in the mood for serious talks with Ukraine,” Putin said in late-night comments at the Kremlin, Bloomberg reports. Russia was ready to “resume direct negotiations and I emphasize - without any preconditions.”

He added that he didn’t exclude further ceasefire as a result of the talks. "We are committed to serious negotiations with Ukraine," Putin said. "There's war, and we're offering negotiations. What's bad about that?" Putin added.

Analysts say that the Istanbul format, that almost ended the war after one month in 2022, is unlikely to work this time, as the previous deal assumed strong security deals provided by the West that the West is not prepared to provide Ukraine.

Putin also took a swipe at the fresh Western demands and threats, saying that, “some countries are attempting to speak to Russia in an insolent manner, using the language of ultimatums, even during the 80th anniversary of Victory Day.”

Putin recently called a 30-hour ceasefire over the easter weekend and another 3-day ceasefire for the V-Day celebrations. Bankova (Ukraine’s equivalent of the Kremlin) said that the Armed Forces of Russia (AFR) ignored both stillstands.

US President Donald Trump is also getting impatient and last week called for Ukraine and Russia to meet for "very high-level talks," saying they are "very close to a deal" on ending the bloody three-year war. A White House official said at the weekend the president has said economic sanctions are “on the table” if a ceasefire isn’t reached.

Zelenskiy previously said he is also ready for peace talks but insists that the 30-day ceasefire be in place first.

Putin once again said at the press conference, the Kremlin needs a truce that would lead to a "lasting peace" instead of one that would allow Ukraine to rearm and mobilize more men into its armed forces. Putin repeated the Kremlin’s long-standing conditions for any lasting ceasefire: the need for acceptable international monitoring of the pause in hospitalities and a freeze on troop movements or weapons deliveries during the ceasefire. Russia believes it currently has the upper hand on the battlefield and doesn’t want to lose its momentum or give the Armed Forces of Ukraine (AFU) the chance to regroup or resupply if there is a pause in the fighting.

"An unconditional ceasefire by definition cannot be subject to any conditions. If Russia calls for such conditions, this can only be considered as an effort to prolong the war and undermine diplomacy," the EU leaders statement read.

The chances of Russia complying with the demand to implement a pause look poor as the EU leaders are unwilling to compromise. “We have no illusions that the ceasefire will be breached,” Zelenskiy said at the weekend.

New coalition pressure

The negotiations have become bogged down in recent weeks. In an effort to move them forward the top four leaders of the coalition of the willing (CoW4) – Polish Prime Minister Donald Tusk, French President Emmanuel Macron, UK Prime Minister Keir Starmer and the newly installed German Chancellor Friedrich Merz – travelled to Kyiv on May 10 to show solidarity with the embattled Zelenskiy.

They called for an immediate and unconditional 30-day ceasefire, issuing a list of new demands and insisting that the ceasefire start on May 12.

• No conditions from Russia for the halt in hostilities, otherwise it is an attempt to disrupt diplomacy;
• The regime of silence must be comprehensive – in the air, on land, and at sea;
• The ceasefire requires effective monitoring in conjunction with the United States;
• In parallel, diplomatic work on the foundations of peace must continue;
• If the Russian Federation refuses, there will be a new powerful package of sanctions against the energy sector, banks, and the shadow fleet; and
• The leaders agreed on further military support and investments in the defence industry of Ukraine and Europe.

At the same time the CoW4 threatened to impose even tougher new sanctions on Russia if it didn’t agree to a stillstand. The Kremlin shrugged off the threat of new sanctions saying they would make little difference.

"We have all gotten used to the sanctions by now," presidential spokesman Dmitry Peskov noted in comments to journalists the same day. "We even have an idea already as to what we will do after they are imposed, how we will minimize their consequences and so on. We have learned to do this already. So, trying to scare us with these sanctions is a waste of time. And it is rather their problem that they are feeling antsy.”

The largest number of restrictions has been imposed by the US (7,384 sanctions, 25.5% of the total). The top three also includes Canada (3,639, 12.6%) and Switzerland (3,266, 11.3%). The EU has prepared a seventeenth package of sanctions, which it intends to vote on at the July summit, and issued 2,482 sanctions (8.6%), and the United Kingdom 2,078 (7.2%).

String of failed deals

After several initiatives, the ceasefire talks have stalled. The CoW4 demands are an attempt to break the deadlock and bring the White House back on board.

Trump called for an unconditional 30-day ceasefire at the start of the peace talk process. It was immediately accepted by Zelenskiy but the Kremlin qualified its acceptance, saying there were “nuances” that needed to be addressed and adding a long list of conditions. The Kremlin has repeatedly said it will not contemplate a ceasefire until the “core issues” at stake were addressed – banning Ukraine form joining Nato being first and foremost.

Subsequently, Washington has called for a phased seven-point “final offer” peace plan approach presented at a London meeting of the coalition of the willing, aiming for one deal that banned strikes on energy infrastructure and a new Black Sea grain deal, but all of them come with the same list of Russian conditions that have not yet been met.

Zelenskiy rejected the US plan, saying it gave too much away to Russia, and issued his own counteroffer peace plan that returns to the original 30-day ceasefire bargain where they started – a position that the coalition of the willing leaders have just thrown their weight behind at the weekend meeting in Kyiv.

Putin has said repeatedly that he is open to restarting direct talks in the Istanbul format, but Zelenskiy has repeatedly rejected the offer. Despite the ultimate failure of the deal, Istanbul showed there is a fair amount of common ground and a ceasefire deal is possible.

“The 2022 negotiations serve as a reminder that Putin and Zelensky are capable of entertaining significant concessions,” said Samuel Charap the Distinguished Chair in Russia and Eurasia Policy and a Senior Political Scientist at the RAND Corporation, and Sergey Radchenko, Professor at the Johns Hopkins University School of Advanced International Studies in Europe, wrote in an op-ed in Foreign Affairs on May 8. “Both men have gained a reputation for maximalism in the past three years. But Istanbul showed that they could be open to the kind of politically risky compromises necessary for peace.”

The analysts said there are two ways out of the war: offering security guarantees or a stalemate.

Security guarantees option

The core bargain of the Istanbul deal was Ukraine embracing permanent neutrality and abandoning its possible membership in Nato in return for ironclad security guarantees from its Western allies, Charap and Radchenko said, who have studied the agreement in detail.

Security is at the heart of what Putin wants too. He sees Ukraine’s mooted membership of Nato as an existential threat to Russia that he will not under any circumstances accept in any form. Indeed, he is almost paranoid in this belief as bne IntelliNews speculated in an op-ed that asked if Putin has gone mad.

But the Istanbul talks were rushed. The Armed Forces of Russia (AFR) was on Kyiv’s doorstep and so Ukraine did not include its Western allies in the talks, not even the Americans. They were simply told of the contents, including the need to give Ukraine very strong security guarantees, as a fait accompli. In retrospect, failing to win the West’s approval for these guarantees before the negotiations was naïve. As bne IntelliNews reported, the deal failed over the issue of the security deals, which went well beyond anything western powers were willing to offer. Indeed, as former UK Prime Minister Boris Johnson told Zelenskiy a few days later in April 2022, the West was not prepared to offer Ukraine any security guarantees whatsoever and told him to fight on.

“Western officials told us that Ukraine did not consult with the United States and other Western countries until after the Istanbul Communiqué had been issued,” said Chapman and Radchenko. “The lack of Western involvement in the talks made Western officials averse to embracing the communiqué, regardless of its merits. They might have said, “Nothing about the West without the West.” In short, agreements written without all those affected present at the creation are unlikely to succeed.”

The West has made is abundantly clear that its position on security deals has not changed. At the end of last year, Zelenskiy toured Western capitals touting his victory plan that started with accelerated membership of Nato, or some sort of bilateral equivalent, and was roundly rebuffed. At best the West has offered Ukraine “security assurances” which provide long-term access to money and materiel, but stop short a commitment to put Western boots on the ground in Ukraine if Russia attacks for second time.

“No durable peace deal will be possible that does not address Ukraine’s and Russia’s fears about each other over the long term… The primary imperative for both sides in any agreement will be ensuring their long-term security,” said Chapman and Radchenko. “The lack of Western willingness to provide Ukraine security guarantees has been a major challenge to reaching a settlement; it remains an impediment.”

Since the Russian Ministry of Foreign Affairs issued its eight-point list of demands in December 2021 in the run up to the war, the Kremlin has made it crystal clear that its first concern is with preventing Ukraine’s membership of Nato, and all other points on the list, such as sovereignty over Crimea and the four annexed regions, are secondary. Indeed, in the 2022 Istanbul deal, the Kremlin was willing to kick all the territorial disputes down the road. And Kyiv also compromised, agreeing to give up its Nato ambitions and return to neutrality. (Incidentally, the Kremlin has never objected to Ukraine’s plan to join the EU.)

The Trump administration has ruled out Ukrainian Nato membership, but the Kremlin still worries that the issue may be revived by a post-Trump administration. He has also made it clear that the US will not offer Ukraine any security guarantees other than increasing America’s commitment thanks to the presence of US companies working in Ukraine as a result of the minerals deal signed on April 30.

The UK and France have also both backed away from a plan to send some 10,000-30,000 peacekeepers to Ukraine as unworkable, as only likely to enflame the Kremlin further and possibly pull Nato-backed forces into direct conflict with the AFR.

Stalemate option

The ceasefire talks have effectively stalled. Without a western commitment to providing Ukraine security guarantees, the only viable option for bring the conflict to an end is to make a ceasefire more attractive than continued fighting. As Russia feels like it is winning on the battlefield, that means providing Ukraine with enough help to ensure a stalemate.

“Istanbul demonstrated that when push came to shove, Ukraine’s Western backers were unwilling to give Kyiv the guarantee that it believed to be essential for its security,” said Chapman and Radchenko. “Western governments distanced themselves from the Istanbul Communiqué .. [because] the document went far beyond what Washington and allied capitals were willing to provide.”

The Istanbul framework included language much more concrete than that contained in Nato’s Article 5 collective security clause, says Chapman and Radchenko. It called for concrete military support from the West, including things like a no-fly zone over Ukraine, whereas Nato’s Article 5 starts with consultations amongst members before a military response per se, which is not actually guaranteed.

Without real security agreements, Kyiv’s options are limited. Zelenskiy has said himself that Ukraine needs to build its “own Nato” – a very large well-equipped army as the only de facto security guarantee he can hope for.

The CoW4 leaders admitted there are no Western security deals in the works, by adding the crucial importance of “strengthening Ukraine’s Defence and Security Forces as the primary guarantee of Ukraine’s sovereignty and security” as part of their May 10 statement. However, they also suggested that a watered-down peacekeeping force, now called the “reassurance force”, will be part of the deal. The Kremlin has categorically rejected the idea of Nato-banked forces on Ukrainian soil in any form.

This has been the de facto position of the West all along over the last three years: to ensure a stalemate. The West needs to make it clear that it will continue its “some, but not enough” supplies to Kyiv so that Russia cannot win the war, but neither can Ukraine, in the hope that the drain on Russian resources and lack of military progress will be enough for Putin to cut his losses and end the conflict. This policy has to be clear and coordinated by all the Western actors to be effective, argue Chapman and Radchenko. The priority is to make it too costly for Russia to keep fighting in Ukraine, Ukrainian Foreign Minister Andrii Sybiha confirmed at the weekend.

“The United States should also work with its European allies so that they line up behind the same goals. By inducing a stalemate, such a policy would make talks more attractive than continued fighting for both sides,” the analysts said.

Under the terms of Putin’s proposal, the West should:

• Recognise Russia’s sovereignty over Crimea de jura;
• Recognise Russia’s sovereignty over the four annexed regions de facto;
• List all the sanctions imposed since 2014; and
• Provide legally binding guarantees that Ukraine will never join Nato.

Zelenskiy has ruled out the de jura recognition of Crimea belonging to Russia. The de facto recognition of Russia’s occupation of the four regions is moot as they are already de facto acknowledged as under Russian control. And sanctions relief is not going to happen unless the EU is on board; Brussels has said there can be no sanctions relief until the AFR quits Ukraine entirely.

Everything on the list is a distraction from the main goal of the talks: solving the security problems, argue Chapman and Radchenko: “Focusing on territory distracts from the primary security agenda. Russia did fine without any country formally recognizing its occupation of Crimea since the territory’s March 2014 annexation, and it can survive perfectly well without such recognition going forward.”

Sanctions threat

To add some steel to their demands, the CoW4 leaders said if Russia ignores the call for a ceasefire, then new and stronger sanctions should be applied to its banking and energy sectors, targeting fossil fuels, oil and the shadow fleet.

The UK last week imposed the “biggest ever” package of sanctions on Russia, targeting its shadow fleet of tankers. The departing Biden administration also imposed the “harshest ever” oil sanctions on Russia in December, which the US Senate is threatening to expand.

Macron added that Russia would face "massive" coordinated European and US sanctions if it didn’t sign up to the 30-day ceasefire this week.

"In the event of a violation of this ceasefire, we have agreed that massive sanctions will be prepared and coordinated between Europeans and Americans," Macron told a press conference in Kyiv.

In Washington, Republican Senator Lindsey Graham has put together a bipartisan bill that has the support of 72 colleagues that would enact “bone-crushing” new sanctions on Moscow. the main thrust of the bill is to target any country that does business with Russia, using secondary sanctions. The punishments would include a 500% tariff on imports from countries that buy Russian oil, petroleum products, natural gas or uranium, according to a draft seen by Bloomberg.

Until now, the oil sanctions have largely failed because primarily India and China have ignored them. However, Graham’s bill suggests that if the Asian powerhouses continue to buy Russian crude they may come under sanctions. Both countries have been cautious about bring down sanctions on their own heads. Chinese and Turkish banks dropped their Russian customers when they were threatened by new highly effective US financial sanctions last year. India also turned some Russian tankers away after Biden’s oil sanctions were imposed. The so-called US strangulation sanctions on Russia’s shadow fleet of tankers has also proven to be more effective than the EU’s sector-based sixteen rounds of sanctions.

Since 2014, approximately 29,000 sanctions have been imposed against Russia, mainly by the United States, Canada, and Switzerland, RIA Novosti said, citing the independent analytical portal Castellum, Report informs.

However, as bne IntelliNews has reported, the sanctions have largely done more damage to the EU via a boomerang effect than they have to Russia, which has been among the fastest growing large economies in the world in the last two years.

Russia’s major economic problem today is not a lack of revenue thanks to the sanctions, although the sanctions have reduced revenues, but sticky high inflation caused by a massive military Keynesianism boost to military spending that the Central Bank of Russia (CBR) is unable to control using traditional rate hikes. As a result, CBR governor Elvia Nabiullina has adopted an unorthodox non-monetary policy methods to artificially depress growth as her only option to bring inflation down. The Russian economy is cooling and actually contracted in real terms in the first quarter of this year as Russia was hit with external shocks including oil prices that fell below $60 per barrel, suggesting that Nabiullina may have over done it. However, after the first few rounds of sanctions on things like SWIFT membership in the first week of the war, and the twin oil ban at the end of 2022, sanctions have had little impact on the Russian economy.

Addressing scepticism over whether fresh sanctions against Moscow will work, Merz said "almost all member states of the European Union and a large coalition of the willing around the world are determined to enforce these sanctions even if our initiative of the weekend should fail."