The sticking points between Russia, Ukraine and the West

A horrific series of attacks by ISIS in Paris, Beirut and over the Sinai in recent weeks have turned the world’s attention toward Syria – once again. Yet even as US Secretary of State John Kerry and Russian Foreign Minister Sergey Lavrov meet in Vienna to explore cooperation in the fight against ISIS in the Middle East, the West and Russia remain at odds in Ukraine. Over the past weeks, the situation in the Eastern Ukraine has also taken a turn for the worse, as Russian proxies renewed attacks on Ukrainian forces. The outbreak of new fighting in Ukraine’s Donbas region bodes ill for the fate of the Minsk peace process that is ostensibly regulating the conflict. The reality is that Russia, Ukraine, and the West have vastly different interpretations of what the Minsk implementation entails.

In September and October it appeared that the deal, which was signed earlier this year, was beginning to work. After a year and a half of fighting, the guns in Ukraine’s east finally fell silent. Both Ukraine’s government and Russian proxy forces discussed pulling back heavy weaponry. Several militia leaders in the Donbas who were opposed to the peace deal were assassinated or otherwise removed from power, in what was widely interpreted as a Russian move to reassert its direct control over the rebel forces in the Donbas as it prepared for complicated and controversial peace talks.

As the fighting receded, Ukraine made real progress reforming its economy and its political system. Ukrainian Finance Minister Natalie Jaresko negotiated a deal to restructure Ukraine’s unsustainable debt. The banking system is being cleaned up. Many so-called “pocket banks,” which oligarchs use to launder money, have been closed. Naftohaz, the state-owned gas company that has been a swamp of corruption, has new, more credible management. In the third quarter of this year, Ukraine’s economy posted positive GDP growth figures. And Ukraine announced that it will not purchase gas from Russia, as it can import from European sources instead. The Ukrainian government has also hiked gas prices, which will encourage consumers and industries to economize on gas usage.

Ukraine still has vast problems, some inherited from the USSR, others developed over 25 years of incompetent post-independence government, others still caused by Russia’s annexation of Crimea and invasion of the Donbas. Yet in the midst of foreign invasion and a brutal recession, Ukraine has avoided complete social or political collapse. Now it has a real chance of digging itself out of its post-Soviet hole.

Or it would have a decent chance, that is, if the war ended. But Russia has again gotten in the way. Even as Ukraine took painful steps to implement the Minsk deal, Russia has dragged its feet. The agreement – including the requirement that Russia return control of the Russian-Ukrainian border to the Kyiv government – was initially intended to be made effective by the end of 2015. That deadline will now be pushed into 2016. Elections are supposed to be organized in the Donbas in accordance with Ukrainian law, but it is far from clear whether the two sides will agree on what that means in practice.

More difficult still will be finding a consensus over “decentralization” in Ukraine. The Minsk agreements required Ukraine to pass constitutional amendments to provide for more regional autonomy. But the issue is a sensitive one in Ukrainian politics, because Russia has previously advocated for “federalization” in Ukraine as a form of semi-independence for the Donbas. Many Ukrainians strongly oppose such a move. Nonetheless, in the face of violent protests in Kyiv, Ukraine’s parliament provisionally passed politically controversial constitutional amendments providing for decentralization. The passage of these amendments imposed significant costs on Ukraine’s government, but they were necessary for compliance with Minsk.

That, anyway, is what the West thinks. Russia has a different view. Senior Russian officials including President Vladimir Putin have argued that Ukraine has to take yet more steps toward decentralization in order to comply with Minsk. Whether the Russian side actually has concrete demands or whether this is simply a delaying tactic remains to be seen. Many in Kyiv doubt that Russia has ever been serious about fully implementing the final step of Minsk, because such a move would mean an end to Russian proxies’ influence in the Donbas. Therefore Russia is unlikely to go along. The reality is that we are far from even testing that point. The Donbas is again ablaze with small arms fire.

The European Union will almost certainly renew sanctions on Russia for six more months come January. Through its proxies’ violation of the ceasefire in the Donbas, Russia has signaled that sanctions relief is not high on its priority list, as the West has repeatedly promised to lift the most painful sanctions if the Minsk process is completed. The Kremlin’s lack of speed in implementing the deal suggests that it believes the current impasse serves Russia well.

More disagreements are likely to come. Russia is threatening to impose vast economic sanctions on Ukraine beginning in January if Ukraine implements its trade agreement with the European Union. That would be a devastating blow for a country that has already suffered greatly over the past two years. It is too soon to be sure whether Russia’s threats of further sanctions are serious. But given that Moscow’s proxies are again fighting in the Donbas, no one in Washington or in European capitals is expecting a constructive Russian response.