Zerohedge: Ukraine Ceasefire Deal Agreed After Negotiations All-Nighter; Doubts Remain About Its Implementation

http://www.zerohedge.com/news/2015-02-12/ukraine-ceasefire-deal-agreed-after-negotiations-all-nighter-doubts-remain-about-its

It would have simply been too much to handle for Europe and the risk off algos if hours after the embarrassing failure of the emergency Eurogroup meeting in Brussels failed to reach any deal involving Greece, the Ukraine ceasefire negotiations in Minsk were also to fall apart. Again. Which is probably why after a marathon session lasting 17 hours, and following repeated trial balloons that a deal had and/or had not been reached, a short while ago all major media outlets were delighted to finally blast some Risk On news namely that leaders of France and Germany brokered a renewed deal to end Ukraine’s 10-month civil war in the separatist eastern region, which means that we have a Minsk-signed Ukraine ceasefire. Again.

As the WSJ reports, “details of the agreement weren’t immediately available” but it involves a cease-fire starting on February 15, Sunday, with each side pulling back heavy weapons, as well as steps to give greater autonomy to the Russia-backed separatist regions in eastern Ukraine. All negotiators, namely Ukraine’s Petro Poroshenko, Russia’s Vladimir Putin, Germany’s Angela Merkel, and France’s Francois Hollande said there are no alternatives to peaceful solution.

Some more from Bloomberg according to which Ukraine would start getting border control day after regional elections and full control after constitutional reforms, including decentralization, according to copy of document signed by contact group in Minsk, Belarus.

  • Cease-fire to start Feb. 15, midnight Sat. to Sun. in Kiev
  • Accord sets amnesty covering conflict in Donetsk, Luhansk regions
  • Accord sets a minimum 50km buffer zone, 70-140km for missile systems;
    withdrawal set from front line as of Sept. 19 for rebels, current front
    line for Ukraine army 
  • Ukraine to pass constitutional reforms, including permanent special status to Donetsk, Luhansk, by end-2015
  • Ukraine to restore economic ties, banking links, pension, social benefits to east
  • Withdrawal of heavy artillery to start no later than 2nd day after cease-fire starts; to be completed w/in 14 days
  • Agree to create oversight mechanism to ensure peace accord is implemented
  • Agree to support 3-way talks w/ Ukraine, Russia, EU on gas supplies
  • Germany, France to help rebuild banking system in Ukraine regions affected by conflict
  • All “illegal” groups to disarm

Ukraine’s president Poroshenko was quick to preempt accusations that this was yet another major concession by Ukraine which has already ceded Crimea to Russia – a topic that was not touched with a ten foot pole -and said that there will be no autonomy for the separatist, natural gas and industry-heavy Donbas region and that the agreement won’t move to federalization. Still one can’t quite explain the 50km buffer zone, whose purpose is not exactly clear if not to provide precisely that: autonomy.

Others were quick to point out that the agreement was not really a breakthrough, such as Germany’s foreign minister, Frank-Walter Steinmeier, who said in e-mail that parties to Minsk talks sought to gain more from agreement sealed Thursday but achieved most important goal of sealing ceasefire. “We achieved something while  chance remains that Feb. 15 ceasefire accord could be upturned by intervening violence.”

“Today’s agreement is not a comprehensive solution and not at all a breakthrough” but added that the most “important” aim of ceasefire achieved in talks.  “For the first time we have clear tasks with time allotments for the implementation of the Minsk obligations: on voting, border controls, exchanging prisoners among others.”

Others chimed in as well: “Much, much work is still necessary,” Ms. Merkel said after the talks ended. “But there is a real chance that things will turn for the better.” Merkel said both Mr. Putin and Mr. Poroshenko acted constructively in the negotiations.

“President Putin indeed did all he could to achieve the possibility of ending the bloodshed,” Ms. Merkel said. She added: “In the end, President Putin also put pressure on the separatists” to agree to a cease-fire taking effect Saturday night.

Mr. Hollande described the pact as cause for “serious hope,” and said France and Germany had committed to verifying the implementation of the deal. “Everything is not yet accomplished, but this is a serious hope for Ukraine and a relief for Europe,” he said.

But the questions already emerged: the negotiations hit some snags along the way. Mr. Putin blamed the last-minute delay on what he called Ukraine’s refusal to negotiate directly with the separatist leaders. There was no immediate response from Kiev to that.

Mr. Putin also said one area of disagreement remained about the town of Debaltseve, where Ukrainian forces have been under siege from rebels for days. Separatist leaders called on Kiev’s forces to surrender and abandon the town, something Ukraine so far has refused to do.

By Mr. Putin’s account the agreement appears to split the difference on one key area of controversy—the dividing line between the two sides on the ground.

Mr. Putin said Kiev’s troops would pull back heavy weapons from the current front line, which reflects months of rebel gains, while the rebels would pull their equipment back from the line in the original September agreements.

Even before the negotiations had reached an agreement, the IMF sent out a notice that its staff had agreed on new US$ 17.5 billion extended fund facility with Ukraine.

“The mission has reached a staff-level agreement with the authorities on an economic reform program, which can be supported by a four-year Extended Fund Facility, in the amount of SDR 12.35 billion (about $17.5 billion, €15.5 billion), as well as, by considerable additional resources from the international community. The staff level agreement is subject to approval by IMF Management and the Executive Board. Consideration by the Executive Board is expected in the next few weeks, following the authorities’ implementation of decisive front-loaded actions to achieve program goals.

“The policies under the new arrangement, developed by the Ukrainian authorities jointly with Fund staff, are designed to address the many challenges confronting the Ukrainian economy. Economic activity contracted by around 7-7½ percent in GDP in 2014, weighed down by the conflict in Eastern Ukraine, which has taken a significant toll on the industrial base and exports, undermined confidence and ignited pressures on the financial system. The economic reform program focuses on immediate macroeconomic stabilization as well as broad and deep structural reforms to provide the basis for strong and sustainable economic growth over the medium term.

“The 2015 budget initiates an expenditure-led adjustment to strengthen public finances within the availability of resources. This required bold, but necessary, measures, including keeping nominal wages and pensions fixed. The budget is supported by revenue reforms, including increasing the progressivity of the personal income tax and streamlining the tax system. The authorities are committed to medium term reforms of the civil service and the important health and education sectors, aiming to improve quality and efficiency, as well as widening the tax base and improving customs and tax administration. Fiscal consolidation would continue over the coming years which together with the debt operation envisaged by the authorities will strengthen debt sustainability.

Alas, with Ukraine having no gold left, the probability of the IMF staying to implement a long-term structural reform in the country is slim to none which means hyperinflation is almost certainly inevitable, but while Ukraine may or may not have reached a (temporary) ceasefire, it will at least have the cash to pay for its external obligations. Mostly to Russia.

Finally, as a reminder, this is the second time Ukraine peace has been signed on paper in Minsk, only for hopes to crash and burn in the days that followed. Many are skeptical this time will not be different, most certainly if headlines such as the following continue to appear in the coming hours and days, until the actual ceasefire is implemented on Sunday.

#BREAKING Fifty tanks entered Ukraine from Russia during peace talks: Kiev

— Agence France-Presse (@AFP) February 12, 2015

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7 Responses to Zerohedge: Ukraine Ceasefire Deal Agreed After Negotiations All-Nighter; Doubts Remain About Its Implementation

  1. Pete says:

    “Germany, France to help rebuild banking system in Ukraine regions affected by conflict”
    “The 2015 budget initiates an expenditure-led adjustment to strengthen public finances within the availability of resources. This required bold, but necessary, measures, including keeping nominal wages and pensions fixed. The budget is supported by revenue reforms, including increasing the progressivity of the personal income tax and streamlining the tax system. ”

    “Even before the negotiations had reached an agreement, the IMF sent out a notice that its staff had agreed on new US$ 17.5 billion extended fund facility with Ukraine.”

    “Alas, with Ukraine having no gold left, the probability of the IMF staying to implement a long-term structural reform in the country is slim to none which means hyperinflation is almost certainly inevitable, but while Ukraine may or may not have reached a (temporary) ceasefire, it will at least have the cash to pay for its external obligations. Mostly to Russia.”

    So to recap this article. The Russians got paid, Western Europe keeps warm, Germany and France got the banks and the people of the Ukraine got their incomes fixed facing hyperinflation and higher taxes. I wonder how the IMF collateralized the loan?

    http://www.metal.com/newscontent/58480_ukraine-gold-reserves-reported-to-be-hastily-aircrafted-to-u.s

  2. Rich Buckley says:

    Notice the terms of the Ukrainian cease fire negotiated yesterday between Putin and Poroshenko and overseen by Merkel of Germany and François Hollande of France.

    Blah-blah-blah military this and that…and then what this war is all about…neocon western banking hegemony:

    “Ukraine to restore economic ties, banking links, pension, social benefits to east”…(this term by the way is the one term left out of The Guardian’s Top of the Page review of the cease fire in this morning’s US Publication)

    Our western political US neocons are neurotically rushing around Washington salons and pushing a story line to send lethal aid which in their minds must be done because why?

    Because we are going to squeeze Russia to get them to blunder into a full out war and send traceable resources across the boarder so we can say “look what they did!” and use mission creep to expand into an ever larger conflict.

    In this cause neocons show over and over there is no end to the casualties they will expect you to pay.

    Never mind that this region has comprised Russia’s homelands and culture for over 350 years. Never mind that part of our post Cold War collapse disarmament agreement with Russia was to not squeeze in our military power on to their boarders in return for Russian withdrawal of nuclear weapons.

    We have to have our western corrupted banking system there or we’ll bomb everyone to oblivion. We are totally under banking controls with neocon henchmen pushing the agenda…by arming The Candy Man (Poroshenko-a billionaire candy distributor) we put in power — that’s right, candy, not drug distribution, no, no,no. Not running girls, not running weapons, not being a bagman for the dark side of the CIA, not a black market king pin…he’s simply a candy man … that somehow is able to make drug-runner-black market-bag-man-weapon-sales size profits through his quint confectionary business. That’s all. A totally clean operation. Just like See’s Candy except with 10,000 percent greater profit margins.

    So why are Poroshenko army units wearing the same Nazi Insignia Arm Patches as the WWII Nazi invasion units wore? How connected is this region to Russia? Here’s Russia’s WWII time line and sacrifice for it in WWII http://www.secondworldwarhistory.com/soviet-union-ww2-events-timeline.asp

    Notice this was called Russia in WWII, all the way south to the Crimea on the Black Sea.

    So why are Poroshenko army units wearing the same Nazi Insignia Arm Patches as the WWII Nazi invasion units wore? Maybe to reclaim their WWII mission? In your face like it or not. We have become them. The neocons are them. They think, function, strive, and project war and kill, project fear, intimidate, remove civil liberties, remove habeas corpus, push for one world government, and most important of all…..keep everyone and all nations in perpetual debt to the owners of the Federal Reserve Banking System.

    Let’s change the Federal Reserve and print treasury dollars in stead of debt creating federal reserve dollars. We can do it without the help of congress. The President has the constitutional authority to do it. Instead of giving Obama new war powers, just elect a next President that promises to coin and issue treasury dollars. Yes it may be that simple.

  3. Ri-chard says:

    I guess we now wait for Obama and Kerry’s approval. Should there be a true cease fire will this give Obama and friends time to arm his puppet government with “lethal defensive weapons” ?

    • Ken Harris says:

      That seems to be the case with past cease fires. I think this time Poroshenko has realized the futility of continued aggression, especially since Ukraine’s economy is in ruins and the road to recovery long and arduous. There is also the unwillingness of military aged conscripts to participate in this war. Even the heavy handedness of the Neo-Nazi militias will not change to growing anti-war sentiment of the Ukrainian people. The freedom fighters in the east will follow the agreement as long as the Kiev follows it. But the eastern forces are being very wary, essentially stating that they will believe it when they see it. My focus is on a lasting peace and the revealing of the truth in respect to the circumstances that led to this conflict for all the world to see and comprehend.

    • Ken says:

      I don’t think there is no waiting at all. The wheels of the Neocon PNAC agenda have been in place for a very long time and we can only hope their over reach will be their undoing. The US in my opinion is using subterfuge and political artifice to implement their hastened timeline of taking out Syria, Iran, Russia, China and Saudi Arabia and we are witnessing their desperation.

      Ukraine is a planned distraction as the Neocons are trying to stall the fusion of the Eurasian Union and ultimately the BRICS coalition from usurping the Rothschild’s wet dream. With the Ukrainian puppet government in place they can cross Russia’s border at any time under a False Flag. Their problem is that Syria and Iran have not caved in despite the onslaught of sanctions, assassinations, bombings and chaos. Humanity be damned they will continue until they are put in their place.

      As Edgar Cayce predicted “Russia will become beacons of hope for the world.”
      It appears to me that only through the leadership of Mr. Putin does he give humanity a chance to stand up and remove the parasitical bankers and their enablers. The outcry to this obvious illegal transgression needs to ring loud in the global consciousness if we are to root out this infestation.

      Let’s hope our work tips the scales of balance. We can all see the man behind the curtain, now let’s all continue to point him out. The Emperor in deed has no clothes.

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