From Fort Russ, 2-5-2015

What doomsday looks like on the financial markets–the course of Hryvnya today.

2/5/2015

Merkel and Hollande are coming with new proposals
By Yurasumy
Translated from Russian by J.Hawk

Interesting things are happening on the diplomatic front.

No. 1. Kerry has been talking about something with Poroshenko. Seemingly no big deal. As expected. But the initial expectation was that their talk was supposed to have happened tomorrow, and then Kerry and Poroshenko would have gone to visit Angela in Munich.

No. 2. What is more, Merkel and Hollande are coming to Kiev already tonight. They want to present Poroshenko with new apartment swap options (just kidding, of regulating the Kiev crisis).

No. 3. And tomorrow the sweet Euro decisionmaking pair is flying to Moscow. To convince Putin to adopt their variant.

All of that is happening against the background of Strategic Rocket Forces drills and Russian Ground Forces maneuvers along Ukraine’s borders.

A reminder: even a few days ago the weekend was planned differently. Kerry was supposed to meet with Poroshenko on Friday, and on Saturday everyone was to fly to Bavaria for shish-kebabs. There they’d put together a new Munich agreement aimed at Russia.

But something had changed their plans. Considering that they are working over Poroshenko first, it means that the EU proposals are not going to be on the basis of the Minsk Protocol. Considering that the Kremlin doing everything (balalaika, vodka, Budenovka, and PPSh) to show that it is not about to retreat and in view of yesterday’s discussions in Washington concerning federalization, I can assume that has already been decided. Now Putin only has to believe them. But after all that’s happened a “gentleman’s word” is not going to be enough. Apparently they are bringing “cookies” to Moscow.

What can this mean for the Donbass. Well, maybe nothing. They may fail to reach an agreement. Secondly, as long as the bombardment of cities continues, Putin will not order the destruction of the UAF to stop. The main issue is the line of demarcation. It was already raised, but it is not yet known in any detail (it was announced earlier that it would be wherever the front line is at the moment of a new ceasefire). Therefore it is not in the West’s interests to prolong the process, because the line will change with every day. On the other hand, I can’t imagine (or, rather, can imagine) what they will do to Poroshenko in Kiev after that.

In any event, the weekend will not be boring.

J.Hawk’s Comment: As noted just yesterday, Ukraine is facing the options of peace, victory, or doomsday. Victory is out of the question for obvious enough reasons. Continued fighting can only lead Ukraine into a nation-wide disaster. But for that to be averted the “parties of peace” at some point have to neutralize the “parties of war” and reach a solution. Kerry, Merkel, and Hollande are in the “peace” camp, so their meetings with Poroshenko and then Putin suggest it will be a meeting of like-minded (on the question that the fighting ought to stop, rather than escalate) individuals.

What Yurasumy’s analysis leaves out (though hints at) is the problem of the war parties. What if Biden makes one of his “trips” to Kiev again? What if the “volunteer battalions” raise the cry of “treason” against Poroshenko? Might Turchinov and Yatsenyuk not be tempted to oust Poroshenko using yet another “wave of popular anger”? 

On the other hand, it is clear that Ukraine is on the brink of its doomsday. The Ukrainian currency is plummeting, the country’s currency reserves appear to be completely exhausted, and there is zero possibility than IMF assistance will suddenly provide Ukraine with new financial means to continue the war. 

http://yurasumy.livejournal.com/375027.html

http://fortruss.blogspot.com/2015/02/on-brink-of-doomsday.html