Donbas war: No ceasefire, sides uncompromising

Макроэкономика 12.01.2015 Over the weekend, military and civilian casualties mount further as Ukraine's military reported a sizable increase in the number of attacks by pro-Kremlin militants, with as many as 50 on Saturday and about 40 on Sunday. Reliable sources report no ceasefire in sight in Donetsk as the Kremlin continues to ignore the Minsk agreement. Although a meeting of the heads of Ukraine, Germany, France and Russia was planned in Astana, Kazakhstan on January 15, German Chancellor Angela Merkel postponed the event following a phone call on the recent developments with President Putin. Although Putin reaffirmed his position of seeking a peaceful resolution on the Donbas war, pro-Kremlin militants continue to be supplied and supported by the Russian army. During his visit to Paris on Sunday to commemorate the victims of the January 9 terrorist attack, President Poroshenko told journalists that the meeting in Astana is still being planned and that he had the support of French and German leaders. Merkel conditioned that Russia must fulfill its obligations under the Minsk agreement. Only after that would she and other participants consider a meeting in Astana for another round of talks. In our view, the Russia stance reflects the Kremlin's ad hoc strategy of avoiding a quick solution to the standoff with Ukraine. The lengthy process of the standoff has been useful to the Kremlin as it has used the impact of the Western sanctions to consolidate support inside Russia. On top of this, the Kremlin has built a case recently for the EU to reconsider the sanctions, igniting fears among some EU officials that the collapse of the Russian economy could drag the EU's economy with it. The position of Germany and the US is clear: the sanctions will only be lifted after the Minsk agreement is reinstated. In the meantime, any progress is limited by the prolonged stalemate and lack of resolution as Russia continues on this purposeful path.