Merkel and Putin in ‘secret’ Ukraine deal?

Merkel and Putin in ‘secret’ Ukraine deal?

Rumours are circulating that German Chancellor Angela Merkel and Russian President Vladimir Putin have been secretly working out a plan that would put an end to the tragedy in Ukraine.

Sources say discussions are ongoing despite the downing of Malaysia Airlines Flight MH17 on July 17, 2014, with the loss of 298 lives. If this is true, it might seem to open a window of opportunity.

At a first glance, the alleged components of the talks make a lot of sense.

The first step would be for the Kremlin to disown the rebels in eastern Ukraine. The Ukrainian armed forces would then be able to finish the ‘anti-terror operation’. The price for that step would be that the government in Kiev would pledge not to join Nato, and would embark on a rewrite of the country’s constitution allowing more autonomy for the eastern region.

The second step would be to reach a long-term agreement with Russian gas-giant Gazprom. The flow of gas to Ukraine was stopped in mid-June due to a refusal by Kiev to pay its outstanding bills. By early October the country will have run dry. Finding a long-term solution would be in everybody’s best interest. This would entail Kiev finally delivering the billions owed to Gazprom for past gas deliveries.

Third is that Russia would compensate Ukraine for the loss of rent Moscow had previously agreed to pay for its lease of the Black Sea naval base at Sevastopol. In return, there would have to be international recognition of Russia’s annexation of Crimea.

Fourth is that Russia would not retaliate against Ukraine for signing a free trade agreement with the EU. The price would be an assurance that European goods would not be imported duty free via Ukraine into Russia, which at present has a duty free regime with Ukraine. This would also be in everybody’s best interest.

An eventual deal with Russia will have to entail elements of the kind mentioned above. It is foolish to think that the Kremlin would back off without getting anything in return.

However, there seems to be little reason to believe a deal will be possible any time soon following the tragedy of Flight MH17. The idea of even recognising the Kremlin’s seizure of Crimea would seem to be sufficient to scupper any deal.

But the real cause for concern is that pretty much all that is now on the table was reality before the ‘revolution’ in Kiev in February 2014.

There were no separatists in eastern Ukraine. The Russian navy had a long-term lease on the Sevastopol base for which a substantial rent was paid. Kiev had said it would not join Nato. A deal was in place on gas deliveries at a very substantial discount. And in December 2013 Moscow agreed to grant Kiev substantial credits to prop up its flagging economy.

What was missing was a deal on free trade with the EU and on wider autonomy for eastern Ukraine. Both could have been negotiated. But by opting instead to try to bully Russia out of Ukraine, the EU brought disaster both upon the country and on relations between Russia and the West.

In the words of US diplomat Henry Kissinger: Europe succeeded in transforming a negotiation into a conflict, with devastating implications.

A German government spokesperson says a secret deal between Germany and Russia has ‘no basis in fact’.

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