Putin Sees Basis for Talks After Scholz Meeting: Ukraine Update

(Bloomberg) -- German Chancellor Olaf Scholz met with President Vladimir Putin in Moscow as Western allies expressed reservations over a Russian statement that it was beginning to pull back troops from the Ukrainian border.

Putin told reporters on Tuesday that the talks with Scholz were businesslike and that U.S. and NATO offers on limits to missile deployments and confidence-building measures could be the basis for further discussions.

The meeting came after U.S. warnings of a possible Russian attack on Ukraine reached their most urgent level yet, with Washington saying an invasion could happen imminently. Officials in Moscow have repeatedly denied an incursion is planned.

Key Developments

• Sarcasm in Ukraine Roils Markets Swinging Between War, Peace
• Senators Weigh Non-Binding Resolution as Russia Sanctions Stall
• Where Military Forces Are Assembling Around Russia and Ukraine
• What Conflict in Ukraine Would Mean for Oil, Gas and Food

All times CET

Putin Says Russia Committed to Minsk Accords (3:56 p.m.)

Putin on Tuesday called for efforts to resolve the conflict in Ukraine’s Donbas to continue on the basis of the Minsk accords. Putin, speaking to reporters in Moscow following talks with Scholz, urged France and Germany to pressure Kyiv to implement the stalled 2015 peace agreement.

The Russian leader was responding to a question on a vote by Russian lawmakers asking him to immediately recognize separatist Kremlin-backed regions in Ukraine. Putin didn’t specify how he’d respond to the request. 

Scholz warned that such a move would risk scuppering the Minsk peace process, adding that failure of those discussions would be a catastrophe and that all parties needed to make contributions. 

Western Officials Seek to Clarify Russian Claims (3:07 p.m.)

German Foreign Minister Annalena Baerbock joined a chorus of Western voices expressing skepticism over Moscow’s statement that it was beginning to pull back troops from the Ukrainian border. “Every step of de-escalation would be reason for hope. But so far there are only words, which now have to be followed by actions,” she said on Tuesday.

U.S. Ambassador to NATO Julianne Smith told reporters that they would need to verify Russia’s claims, adding that Moscow made similar statements in December that couldn’t be supported by the facts.

Russia has rotated troops before and would need to demonstrate a significant reduction for a proper rollback, according to a NATO diplomat familiar with the alliance’s thinking. A mass movement of troops would also take time, the diplomat cautioned, so the situation would need to be monitored for a while to ensure it’s not a tactical ploy.

Ukraine’s Top Diplomat Wants to See ‘Real Withdrawal’ (2:40 p.m.)

Foreign Minister Dmytro Kuleba said he would need to see action before believing Moscow’s statement that it was beginning to pull troops back from Ukraine’s border. Kuleba wrote on Twitter that he would believe a de-escalation was in progress if “a real withdrawal follows these statements.” 

U.K.’s Johnson Sees ‘Mixed Signals’ in Russian Position (2:26 p.m.) 

Prime Minister Boris Johnson said Russia’s declaration that it was moving troops away from the Ukrainian border was a sign of a “diplomatic opening,” but added that U.K. intelligence “is still not encouraging.” 

“You’ve got more battalion tactical groups being brought closer to the border,” Johnson told reporters on Tuesday after being briefed by intelligence officials. “So, mixed signals, I think, at the moment.”

Johnson added that the U.K. will take steps to stop Russian companies from raising capital on London financial markets as part of a broad range of sanctions if Russia invades.

Euro Area at Risk From Gas-Supply Shock, ECB Finds (1:18 p.m.)

A potential reduction of gas supplies to the euro area would diminish economic activity in the region and worsen the hit from already-high energy prices, European Central Bank researchers said. 

Slovakia, Austria and Portugal would take the biggest hit, while the Netherlands, Luxembourg and Belgium would be relatively immune, the researchers said. 

NATO Says No Sign Yet of Russian Pullback (1:08 p.m.)

NATO has yet to see any signs of a reduced Russian presence on its border with Ukraine, Secretary General Jens Stoltenberg told reporters in Brussels, although he said Moscow’s announcement offered “reason for cautious optimism.” 

“So far we haven’t seen any sign of de-escalation on the ground,” he said. “Everything is in place for a new attack. Russia still has time to step back from the brink.” 

Estonian Spies See Long-Term Risk From Russia (1:00 p.m.)

NATO and its allies must be prepared for “sustained military pressure” from Russia and a continued military presence in Belarus that will pose a threat to Baltic nations, Estonia’s intelligence agency said in its annual report.

“Russia may continue to maintain a rotating force group on Belarusian territory,” the report said. “This would harm the wider security situation in the Baltic Sea region and for NATO, reducing the preparation time for an attack against the Baltic states.”

Russia’s military would only be a “political decision” away from a full-scale attack on Ukraine from the second half of February, according to the report. But even if current tensions de-escalate, the military pressure wielded by the Kremlin has become an “integral part of the foreign policy of Putin’s Russia” in recent years.

Russia’s Lavrov Says Security Deal Possible With U.S., NATO (12:10 p.m.)

Foreign Minister Sergei Lavrov said Tuesday that Russia is confident that diplomatic efforts aimed at resolving a tense stand-off with the U.S. and Europe will succeed.

Lavrov said his country will pursue talks on its demands for sweeping security guarantees including a halt to the expansion of the North Atlantic Treaty Organization that the U.S. and its allies have rejected. At the same time, Russia is ready to start talks at an expert level on proposals made by the U.S. on missile restrictions and confidence-building measures, he said, adding that Moscow would publish its response to the U.S. soon.

“Thanks to efforts on all these fronts, overall we can work out a fairly good package solution,” Lavrov told reporters in Moscow.

Duma Asks Putin to Recognize Ukraine Separatists (11:32 a.m.)

The Russian State Duma voted Tuesday to appeal to Putin to immediately grant formal recognition to separatist entities in east Ukraine. The Kremlin so far hasn’t publicly stated its position on the proposal. 

The U.S. has warned allies that Russia could try to create a pretext to move against Ukraine by causing a provocation in the eastern Donbas region, where Ukraine’s military has been fighting for years against separatists backed by Moscow, officials familiar with the matter said. 

Russia Shows Video of Troops Preparing to Pull Back (11:11 a.m.)

Units of the Western and Southern military districts are already loading equipment onto road and rail transport after completing their drills and will begin returning to their permanent bases Tuesday, Defense Ministry spokesman Igor Konashenkov said in a video posted on its website.

It remains unclear how many troops may be pulled back and how significant the process might become.

Some of the troops on exercise in Belarus have moved closer to the border than expected, according to Western intelligence officials. They added their intelligence showed there were currently 100 Russian battalion tactical groups massed near Ukraine’s borders and 14 more in transit. The officials did not provide the evidence behind their assessments.

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