Ukraine and Russia both signaled progress toward settling their festering row over gas on Friday, raising hopes of an EU-backed resolution of the broader conflict embroiling the Soviet-era allies.
Russian President Vladimir Putin met his Ukrainian counterpart three times in the space of 10 hours in Milan, twice in the company of various EU leaders then, finally, in their first private meeting since late August.
“We have some certain progress [on the gas issue], but left some details which need to be discussed,” Ukrainian President Petro Poroshenko said after the final meeting, adding that he hoped a deal could be done at or before already-scheduled talks in Brussels next week.
“Before Oct. 21, we hope to find a solution for the energy question,” he said.
Putin also implied a deal was close and urged EU governments to help finalize the complex funding package required for it to happen.
French President Francois Hollande had earlier described a gas deal as “within reach,” following a four-way meeting involving himself, Putin, Poroshenko and German Chancellor Angela Merkel.
EU-brokered talks with Ukraine and Russia have produced a draft accord whereby cash-strapped Kiev would pay US$3.1 billion in unpaid bills to Moscow by the end of this month, with a new contract to cover subsequent deliveries.
If confirmed at Tuesday’s talks in Brussels, this could represent a real advance.
Putin threatened earlier this week to cut supplies completely if no agreement was reached — a move that could disrupt winter supplies to Europe.
Russia accounts for about one-third of the EU’s consumption, half of which transits via Ukraine, and previous disruptions, in 2006 and 2009, led to sharp spikes in prices.
In a sign of continuing uncertainty regarding the Russian economy, ratings agency Moody’s downgraded Moscow’s credit rating to “Baa2” from “Baa1” on Friday, citing the Ukraine crisis as one of the reasons.
Hollande said progress had also been made on the implementation of a ceasefire and peace accord reached in Minsk between Kiev and pro-Russian rebels early last month.
“There has been progress. We have not reached the end yet, but there are good things, including gas,” Hollande said.
Ukraine and Russia reconfirmed their commitment to the Minsk accords, agreed to speed up prisoner exchanges and moved forward on the idea of border monitoring by the Organisation for Security and Co-operation in Europe using satellites and drones, the French president said.
Putin said there had been progress on this, but Poroshenko struck a downbeat note.
“Unfortunately, this is the same that we [previously] agreed... the main problem is implementation of the agreement,” Poroshenko said.
British officials said a key sticking point is whether Putin can be pressured into using his perceived influence with the rebels to ensure that nationwide Ukrainian elections on Sunday next week are held across the country, including in rebel-held territory.
The rebels are threatening to stage their own vote, underlining their demand to be treated as virtually an independent sub-state.
“What we have achieved ... while not a definitive resolution of the crisis, marks progress, which will be confirmed in the coming days,” Hollande said.
More than 3,600 people have died in fighting in eastern Ukraine since Russia annexed Crimea in March, punishing its former Soviet satellite Ukraine for having turned its back on Moscow in favor of ties with the EU.
The diplomatic exchanges over Ukraine took place on the sidelines of an Asia-Europe summit completely overshadowed by a crisis which has also claimed Asian victims.
Dutch Prime Minister Mark Rutte and Australian Minister of Foreign Affairs Julie Bishop met Putin to demand better cooperation with an investigation into the July shooting down of Malaysia Airlines flight MH17 over eastern Ukraine.
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