Geneva Statement on Ukraine Going Nowhere

At first blush the short statement released yesterday in Geneva by the four parties -- Russia, United States, European Union, Ukrainian putschists -- seemed like a Russian capitulation. Emphasis was placed on ending the occupation of public buildings and spaces with only vague language committing the putschists to an open dialogue in any forthcoming constitutional process.

My reaction was that there must be more here than meets the eye. To understand what that it is check out this morning's post "DECONSTRUCTING THE RESULT OF THE FOUR PARTY TALKS" by Da Russophile:

As its text makes clear what this document is in reality is not an an agreement to settle the Ukrainian crisis or even an outline of such an agreement but rather a statement of basic principles around which an agreement should be negotiated. The real agreement (if it comes about) will emerge from negotiations based on the principles set out in this document. 

A number of points: 

1. Kiev’s claims to the contrary notwithstanding, the statement that “all sides must refrain from all violence, intimidation and provocative actions” clearly rules out the “anti terrorist operation” in the eastern Ukraine that Kiev launched on Sunday; 

2. As Lavrov has correctly pointed out the provisions in the third paragraph that require the disarmament and dissolution of armed groups is clearly intended to refer as much to Right Sector and the Maidan Self Defence Force as it does to the protesters in the east. Note specifically that the statement calls for a general amnesty except for those who have committed capital crimes (ie. murder). So far no protesters in the east have murdered anyone. Even Kiev admits that none of its soldiers have so far been killed. The same obviously cannot be said of Right Sector and of the Maidan Self Defence Force even if one disregards their likely responsibility for the sniper killings in Kiev on 20th February 2014; 

3. The document clearly refers to Maidan itself, which it says must be cleared. Specifically alongside illegally occupied buildings the document refers to “all illegally occupied streets, squares and other public places in Ukrainian cities”. The reference to “squares” clearly is intended to refer to Maidan, which the militants in Kiev have said they will continue to occupy at least until the elections on 25th May 2014 and even beyond; 

4. Importantly there is NO time line in the document. There is no demand therefore that buildings be evacuated by any particular date or time. That has to be agreed and coordinated with the OSCE monitors on the ground. The people in the eastern Ukraine are therefore entirely within their rights to stay in the buildings at the moment until a timeline is agreed with the OSCE monitors, one requirement of which will surely be parallel evacuations of occupied squares and buildings in Kiev and the west including Maidan. 

5. The referral to the OSCE as the enforcement and mediation agency between the regime and its opponents gives Russia a formal role in the process since it is a member of the OSCE. By contrast the negotiations which took place before 21st February 2014 were negotiated and mediated by the EU of which Russia is not a member; 

6. The reference to the fact that in the negotiations concerning constitutional changes there should be “outreach to all the Ukraine’s regions and constituencies” (note especially use of the word “constituencies”) gives a role to the protesters in the east in the negotiations and not just to those formal official bodies currently recognised by Kiev. 

This document on its face therefore represents a shift towards the Russian/east Ukrainian side. Indeed it basically sets out principles Russia has been arguing for ever since Yanukovitch was deposed on 22nd February 2014.

The putschists have zero ability to project power by use of force. They will be unable to clear the Maidan; they will be unable to disarm Right Sector. Subsequently, the pro-Russian protesters will refuse to relinquish control of any public buildings in the east. The contours of this impasse are already taking shape. For a helpful roundup this morning consult Niqnaq's "right, let’s start with the post-sellout sitreps." One of the stories Niqnaq refers to appears in The Telegraph, "Russia and West reach surprise deal on Ukraine crisis":

In a demonstration of the difficulties ahead, a separatist leader in eastern Donetsk declared the first concession must come from the revolutionaries that drove out former president Viktor Yanukovych after occupying central Kiev for months. 

Alexander Zakharchenko, a protest leader inside the Donetsk regional government building, said: “If it means all squares and public buildings, then I guess it should start with the Maidan in Kiev. We’ll see what they do there before we make our decision here.”

As Da Russophile predicts,

Unfortunately that does not mean this road map is going to be successfully followed. Already Kiev is trying to argue that the “anti terrorist operation” it has ordered is somehow exempt from it (it isn’t) whilst the US is threatening to impose more sanctions on Russia if following the weekend Russia fails to impose pressure on the eastern Ukrainians to evacuate buildings they occupy without the US undertaking to put any corresponding pressure on its clients in Kiev (shades of Syria here). It is very easy to see how the US and its allies could then blame Russia for the failure of the road map whilst having caused that failure themselves.

The long game belongs to Russia. Recall the Forbes story I linked to the other day, the one about the impending economic collapse of Ukraine:

Ukraine also faces enormous problems re-paying its debts, a substantial portion of which are denominated in dollars and other foreign currencies. Although it attracted little attention at the time, when it bought $3 billion worth of bonds at the end of 2013 Russia inserted a clause that stipulates that the total volume of Ukrainian state-guaranteed debt cannot exceed 60% of its annual GDP. If that threshold is breached, Russia can legally demand repayments on an accelerated schedule. Given the parlous state of the Ukrainian economy and its government’s extremely weak finances, this essentially means that if Ukraine’s debt exceeds 60% of its GDP Russia can legally force it to default. 

Current projections show that Ukraine could stay below the 60% cutoff through 2014. Maybe. The margin of error, however, is relatively small and some combination of weaker growth, a weaker Hryvnia, and a bigger deficit could easily push it past the limit. Given the relentlessly negative trajectory of the entire Ukrainian economy and the fact that virtually every forecast has had to be adjusted downwards, it seems like a safe bet that things will end up worse than the initial projections and that Ukraine’s debts will in fact head perilously close to that 60% limit. Given Russia’s extraordinary aggressiveness on every other front, it’s basically impossible to imagine that the Kremlin won’t use the debt lever to the fullest extent possible.

The same sort of assessment, more from a geopolitical perspective than an economic one, is quoted from a beltway think tank analyst in a story today by David Herszenhorn, "Away From Show of Diplomacy in Geneva, Putin Puts On a Show of His Own":

Mr. Putin’s view that the West has lied to Russia and humiliated him on numerous occasions, including its plans for Libya, explain why he will continue to talk — and act — tough on Ukraine even as he takes diplomatic steps toward resolving the crisis, said Samuel Charap, the senior fellow for Russia and Eurasia at the International Institute for Strategic Studies, a research organization in Washington. 

“They are going to keep the boots on Ukraine’s throat until they are 100 percent convinced that they have gotten what they wanted,” Mr. Charap said in an interview. “They believe that if they completely pulled back from the pressure they are applying, tomorrow the West would swoop in and try to steal Ukraine away again.”

Mr. Putin’s willingness to challenge the West aggressively also reflects his relatively strong position — militarily in post-Soviet space, and politically on the domestic front. “He’s at the top of his game,” Mr. Charap said. “In terms of the situation on the ground and Ukraine’s future, they have the upper hand.” He added, “There’s a sense you get watching him of someone who has an 80 percent approval rating and has been supported by the people he cares about most.”

So all in all the talks in Geneva yesterday and the statement that was generated mean very little. Some clock will be burned, some talking points generated, the upcoming debate that will erupt when neither Right Sector nor the People's Republic of Donetsk fade away will have a frame of reference. That is about it.