(Updates with Poroshenko cease-fire plan in 10th paragraph. For more on the conflict in Ukraine, see EXT2.)
Sept. 4 (Bloomberg) -- Vladimir Putin will continue his shadow war until he’s created quasi statelets in Ukraine’s easternmost regions with veto power over the country’s future, five current and former Russian officials and advisers said.
Even after Putin and his counterpart Petro Poroshenko agreed on steps to end more than five months of fighting, the Russian president won’t settle for less than broad autonomy for Ukraine’s mainly Russian-speaking regions of Donetsk and Luhansk, including the right to reject key decisions at the national level such as joining NATO, according to the people.
Putin is willing to wait until November, after Ukraine elects a new parliament and the heating season starts, to ensure his goals are met, in part by extending a natural gas cutoff to force a compromise if needed, one official said on condition of anonymity after speaking with Putin last week.
“Putin’s goal is to force Ukraine to its knees,” said Stanislav Belkovsky, a Kremlin adviser during Putin’s first term who heads the Institute for National Strategy in Moscow. “He wants a federal structure to put part of the country under Moscow’s informal control and block NATO membership.”
Russian and Ukrainian markets rallied yesterday after Poroshenko and Putin agreed to work on a “cease-fire regime” and take other steps to end a conflict that the United Nations says has killed 2,600 people and displaced more than 1 million.
The announcement came as President Barack Obama and other leaders of North Atlantic Treaty Organization nations headed to the U.K. for a meeting of the military bloc, which was created in 1949 in part to counter the Soviet Union.
The detente also comes as the European Union prepares to impose more penalties on Russia for funneling arms and troops to the rebels, claims that Putin, a former KGB colonel, has denied. Further sanctions could be put on hold if a cease-fire takes effect, a German government official said. Putin last year offered Poroshenko’s predecessor, Viktor Yanukovych, a $15 billion bailout to back out of an EU trade deal and tilt toward Russia’s rival bloc with Belarus and Kazakhstan, sparking protests in Kiev that led to Yanukovych’s ouster and Russia’s annexation of Crimea.
Putin told reporters in Mongolia yesterday that he has a seven-point plan that will be discussed tomorrow at a meeting between representatives of Ukraine, the rebels, Russia and the Organization for Security and Cooperation in Minsk, the capital of Belarus. The plan calls for both sides to pull back, urges prisoner swaps and humanitarian corridors and seeks a stop to the use of warplanes in settlements.
Ukrainian Prime Minister Arseniy Yatsenyuk said the plan is just “window dressing” before the NATO summit aimed at avoiding “inevitable” further sanctions. Ukrainian forces have been reeling from a series of reverses sparked by what they called a “full-scale invasion” by Russia last week.
Still, Poroshenko, speaking at the NATO summit today, said he’ll declare a cease-fire as soon as the Minsk talks begin. Poroshenko said he’ll do “everything possible” to achieve peace, including unspecified legislative changes on the status of eastern regions.
Frants Klintsevich, deputy head of the Defense Committee in Russia’s lower house of parliament, said any peace deal now will have to include the de facto partitioning of Ukraine.
“The leaders of these republics in Donetsk and Luhansk are ready to enter negotiations, but they won’t back down,” Klintsevich said by phone. “No matter what happens, they’ll live separately from Kiev. After so much bloodshed, there’s no other choice. They’ll fight to the last bullet if necessary.”
After the recent rebel offensive, it’s now militarily possible to gain full control of Donetsk and Luhansk and to create a “land bridge” to Crimea, which is separated from Russia by the Kerch Strait, according to Alexei Arbatov, the Defense Committee deputy chief from 1995-2003 who’s now a scholar at the Carnegie Moscow Center.
The insurgents, backed by what Ukraine, the U.S. and NATO say are Russian troops, intelligence, artillery and tanks, continued to close in on the strategic port city of Mariupol on the Sea of Azov today. They advanced on the airport in Luhansk earlier this week, prompting the retreating Ukrainian army to blow up a runway, after they seized Novoazovsk, a town on the Russian border. Ukraine’s Defense Ministry puts the number of active Russian and rebel troops at 10,000 to 15,000.
“Ukrainian forces are clearly outgunned by the Russian aggressors,” John Herbst, U.S. ambassador to Ukraine from 2003-2006, said Sept. 2 on the website of the Atlantic Council in Washington, where he directs the Dinu Patriciu Eurasia Center. “Without help, Russian troops can roll ever-deeper into Ukraine.”
Russian Foreign Minister Sergei Lavrov said Sept. 1 that the rebels would continue to gain ground unless Ukraine sued for peace. The same day, Italy’s La Repubblica newspaper said Putin told European Commission President Jose Barroso he could take Kiev in two weeks if he wanted, remarks Kremlin aide Yuri Ushakov said were taken out of context. Last week, Putin warned against any “aggression” toward Russia, noting the country remains “one of the world’s biggest nuclear powers.”
“The West is afraid of a major war and Putin is exploiting that,” said Belkovsky, the former Kremlin adviser. “The point is to frighten the West and Ukraine into thinking he’ll take Kiev and change the map of Europe unless he gets what he wants. He’s bluffing.”
Bluff or not, Putin’s strategy is clearly working, according to Dmitri Trenin, head of the Carnegie Moscow Center.
“A cease-fire is an important victory for Russia,” Trenin said by phone. “If it actually goes through, Russia will be bargaining from a position of strength. Putin’s strategy is evolving. His end goal is a Ukraine that is a buffer state between Russia and the West.”
The rebels in Donetsk and Luhansk are negotiating with Russia to ensure separate natural gas supplies, Leonid Baranov, a top security official for the self-declared Donetsk People’s Republic, said on Russkaya Sluzhba Novostei radio.
“We’re the only two regions that don’t depend on Ukraine at all,” Baranov said.
Putin said in March that he decided to annex Crimea, home to Russia’s Black Sea Fleet since its founding by Catherine the Great in 1783, in part because of NATO’s eastward expansion, which he said violated commitments made to his predecessor, Boris Yeltsin, by then-NATO Secretary General Manfred Worner after the Soviet Union disbanded in 1991.
“We are against having a military alliance making itself at home right in our backyard or in our historic territory,” Putin said at the time.
NATO’s current chief, Anders Fogh Rasmussen, said Aug. 29 that Ukraine would eventually become a member and Yatsenyuk, the premier, urged parliament yesterday to adopt a bill on seeking to join the military alliance.
Ukraine’s plan to drop its non-aligned status is an attempt to break off political dialogue, Lavrov was cited as saying by Interfax today.
Between 1999 and 2009, NATO admitted 12 eastern European countries, including members of the Warsaw Pact and the three former Soviet Baltic republics of Latvia, Lithuania and Estonia, where Obama spoke yesterday of America’s commitment to the collective security of the bloc’s 28 members. Recalling the Soviet occupation of the Baltic states, Obama said the U.S. and NATO won’t let that happen again and will come to their defenses in the event of Russian aggression.
“An attack on one is an attack on all,” Obama said in the Estonian capital Tallinn. “You lost your independence once before. With NATO, you’ll never lose it again.”
Not so for officially non-aligned Ukraine. Both the U.S. and the EU have ruled out military intervention in the current conflict. That and the failure of sanctions to influence Russian behavior has given Putin a “free hand,” according to Ian Bremmer, president of the Eurasia Group, a New York-based political risk research and consulting firm.
“For Putin, you have to feel that you’re not going to be challenged seriously,” Bremmer said in an interview with Bloomberg Television on Aug. 28.
Because of that, Ukraine’s only way out is to admit defeat, said Arbatov, the former deputy chairman of the Russian parliament’s Defense Committee.
“The longer Ukraine waits, the more territory it will lose and the harsher demands it will face,” Arbatov said.
--With assistance from Daryna Krasnolutska in Kiev and Elena Mazneva in Moscow.