Business New Europe: Ukraine’s Poroshenko orders “permanent ceasefire” in Ukraine following Putin conversation

(Business New Europe – bne.eu – September 3, 2014) Ukrainian President Petro Poroshenko permanent ceasefire in eastern Ukraine firing a conversation this morning with Russian President Vladimir Putin.

Poroshenko made the announcement on Twitter account.

“Mutual understanding was achieved concerning the steps which will enable the establishment of peace,” a statement said after Poroshenko and Putin spoke by phone.

The announcement comes after a summit in Minsk last week opened the way to a peace process. Rebel leaders from eastern Ukraine are still in Minsk talking with the Kyiv governments and trying to find a formula that would bring the fighting to an end. Rebels and the so-called Contact Group are due to meet again on Friday. The rebels on Monday offered several pieces necessary to make a piece of work including a promise to maintain unity and integrity of Ukrainian nation.

For his part Ukrainian president needs to bring the fighting to an end as soon as possible. The country is teetering on the edge of bankruptcy and the national currency has lost over 40% of its value since the start of this year. The IMF has agreed to concertina the next two tranches of its $17bn standby agreement into one payment and that money is due in Kyiv today. However with a Russian gas bill outstanding of over $5bn even the IMF aid will not be enough to bail Ukrainian economy out. Poroshenko desperately needs to launch sweeping and deep structural reforms to get the Ukrainian economy working again.

The announcement will upstage President Barack Obama, who arrived in Estonia for talks with Baltic leaders about the crisis in Ukraine last night. The leaders of Estonia, Latvia and Lithuania are reportedly concerned about possible Russian aggression following the recent intervention in Ukraine.

The peace announcement also comes on the same day that NATO begins a summit in Wales. The military alliance is threatening to create a rapid reaction force specifically designed as a response to Russian aggression in Ukraine. Relations between western Europe and Russia would decaying rapidly leading some to call for a NATO attack on Russia or at least arm the Ukrainian army and so lead to a much more serious confrontation.