Coronavirus pandemic, falling oil prices and the approaching global economic crisis may affect the course of negotiations to resolve the Russian-Ukrainian conflict in Eastern Ukraine.

 

   It is the sixth year since the beginning of Russia's hybrid aggression against Ukraine that resulted in the annexation of Crimea and the occupation of some territories in Eastern Ukraine.

 

   Following an active phase of hostilities in May-September 2014, the so-called “Minsk Arrangements” were signed in the capital of Belarus with the mediation of the OSCE, Germany and France, with the aim to end the conflict and pave the way for Ukraine to regain control over its territory. The last document of these Arrangements was the Comprehensive Measures for Implementation of the Minsk Agreements, approved by UN Security Council Resolution 2202 of 17 February 2015.

 

   All these measures can be summarized as follows:

1. Ceasefire, disengagement of opposing forces, amnesty of fighters and withdrawal of foreign armed formations (in fact Russian troops) from the territory of Ukraine.

2. Granting of special status to the individual areas of Donetsk and Luhansk regions and securing it by amending the Constitution of Ukraine.

3. Holding local elections under Ukrainian law.

4. Transfer of the border with Russia under the control of Ukrainian law enforcement agencies.

 

   The sequence of implementing these measures was not clearly spelled out in the Minsk Arrangements and therefore each side interpreted them in their favor.

 

   When signing the Minsk Arrangements, Ukraine was primarily interested in regaining control of its border, understanding that afterwards Moscow would completely lose its ability to influence the situation in the region.

 

   On the other hand, Putin’s team realized that the tactic of hybrid coercive compulsion of Ukraine to surrender under the Crimean scenario ("we are not there") does not work, and the open invasion by the Russian regular troops into Ukraine entails unpredictable consequences.

 

   Therefore, since 2015 Moscow has focused on the strategy of collapsing Ukraine from within while maintaining the low-intensity military conflict in eastern part of Ukraine. In addition, Putin had personal disdain of Poroshenko, which added to the delay in political settlement. In these circumstances, the negotiations in Minsk were used by Moscow primarily to discredit Kyiv in the eyes of Ukraine’s Western partners.

   This strategy could have had some prospects if Russia were not under international sanctions and had sufficient strategic resources. But since 2015 the economic situation in Russia has started to deteriorate due to falling oil prices and sanctions. In addition, Ukraine succeeded to overcome its energy dependency on Moscow, suppressed Russia's "fifth column", launched internal reforms and received significant support from the European Union and the United States. Thus, Moscow started to lose its traditional leverages of economic, political and social influence on the processes in Ukraine. So given the growing challenges inside Russia and the strengthening of international sanctions, it became economically unsustainable and politically dangerous for Kremlin to “freeze” the conflict in Ukraine for a long time (as it did in Abkhazia, South Ossetia and Transnistria).

 

   The best option for Moscow was to push Kyiv towards direct negotiations with the Donetsk and Luhansk, thus presenting the conflict in eastern Ukraine as a purely domestic political problem of Ukraine. This would provide Putin with the justification to demand that the Europeans and the Americans remove "unjustified" sanctions against Russia, allowing at the same time to control and delay the proxy talks in Donetsk and Luhansk for as long as it would be necessary.

 

   In 2019, following the presidential transition in Ukraine the Kremlin has focused its efforts on implementing this scenario by utilizing one of the provisions of the Minsk Arrangements that envisaged the involvement of representatives of “particular areas of Donetsk and Luhansk regions” in consultations and approvals within the Tripartite Contact Group.

 

   The new President of Ukraine, Volodymyr Zelensky, has identified ending the war in the east of the country and returning the temporarily occupied territories under Ukraine’s control as his main goal. To achieve this, he initiated direct dialogue with Putin, agreed with him on the disengagement of opposing forces on some sections of the frontline, the exchange of prisoners and the intensification of negotiations in Minsk.

 

   The parties replaced their authorized representatives in the negotiations. The new Russian delegation was led by Deputy Chairman of the Russian Presidential Administration Dmitry Kozak, known for his plan to settle the conflict over Transnistria in 2003.

 

   The Ukrainian team in Minsk was headed by the Head of the Office of the President of Ukraine, Andriy Yermak.

 

   During their first meeting in Minsk on March 11, 2020, Kozak presented the initiative to create a “consultative council” to "... carry out dialogue, consultations and make proposals on draft political and legal solutions to the conflict settlement, including elections in some areas of Donetsk and Luhansk regions of Ukraine". This “consultative council” was to include ten representatives from Ukraine and ten representatives from "separate areas of Donetsk and Luhansk regions" with voting rights, as well as one representative from each Russia, France and Germany with "advisory rights". The OSCE was to moderate the meetings of the “council”, and its decisions had to be advisory.

 

   Russia thus would effectively change the status from being the aggressor state to being the observer and advisor, like France and Germany. This would have been the first step towards lifting the sanctions.

 

   According to plan, the protocol on the establishment of such a “council” had to be signed on March 24-26, 2020. However, this signing did not take place. Again, both the Kremlin and the Office of the President of Ukraine did not take into account the reaction of civil society in Ukraine (especially war veterans), which strongly opposed any direct negotiations or consultations with representatives of Donetsk and Luhansk, who are justly regarded as mere sock puppets and mercenaries of Moscow.

 

   As a result, as of the end of April, there have been no major changes in the Minsk negotiations. This creates a dilemma for the President of Ukraine, who hoped to hold local elections in the temporarily occupied territories in the fall of 2020. At the same time, Ukraine's leadership is now forced to focus more on fighting the coronavirus pandemic and preparing for the encroaching economic crisis. Due to the support of its partners in Europe and the United States and the limited reliance on its economy on world oil prices, Kyiv has every opportunity to overcome the effects of the pandemic and the economic crisis.

 

   At the same time the coronavirus pandemic and the sharp fall in the price of oil have significantly worsened the economic situation in Russia. Moscow is rapidly spending its strategic reserves to compensate for the losses of the state budget, half of which is dependent on oil and gas exports, and is preparing for the worst-case scenarios of intensifying sociopolitical instability. Lifting international sanctions and reducing the costs of supporting occupied territories in Ukraine (including Crimea, which is a topic for a separate story) in these circumstances becomes critical for the Russian leadership, as such a crisis has not yet occurred in the modern Russian history.

 

   Therefore, paradoxically, in the near future Moscow may be potentially more interested in accelerating the Minsk negotiations than Kyiv itself.

 

   However, in these circumstances Ukraine must strengthen its army, carry out deep economic reforms, decisively fight corruption, improve the efficiency of state institutions and thus demonstrate the irreversibility of its pro-European transformation.

 

   Putin is doomed to leave Ukraine in order to save Russia from disaster.