(Bloomberg) — The leaders of Russia, Ukraine, Germany and France agreed on a cease-fire to stem the conflict that’s devastated eastern Ukraine and triggered the worst crisis in more than 20 years between Russia and its former Cold War foes.
“We agreed on the main things” Russian President Vladimir Putin told reporters in the Belarusian capital of Minsk. “We expect all sides to show restraint until a full cease-fire.”
The accord was struck early Thursday after all-night talks between Ukrainian President Petro Poroshenko, Putin, German Chancellor Angela Merkel and French President Francois Hollande. The deal envisages a truce starting at midnight at the start of Feb. 15 and reaffirms some commitments from a failed September bid to end the conflict.
The collapse of previous cease-fires has stoked skepticism as to whether this one will hold. Ten months of fighting have killed more than 5,000 people, ravaged Ukraine’s economy and propelled Russia toward recession through U.S. and European sanctions. Raising pressure to deliver a settlement, the run-up to the summit was accompanied by escalating violence and calls for the U.S. to supplying weapons to Ukraine’s struggling army.
“The conflict will continue, even with this agreement,” Joerg Forbrig, a senior program director at the German Marshall Fund in Berlin, said by phone. “Eastern Ukraine is now basically lost to central government control.”
‘Great Hope’
Ukrainian bonds due 2015 jumped 3.6 cents to 62.6 cents on the dollar after the accord was announced, data compiled by Bloomberg show. The hryvnia, the worst-performing currency in the world in the past year with a 67 percent plunge against the dollar, was little changed. Ukraine’s shrinking economy got a boost earlier Thursday as the International Monetary Fund announced a $40 billion bailout package to stave off a default.
The ruble gained 0.6 percent to 64.8710 against the dollar, erasing a drop of as much as 3.3 percent.
Merkel told reporters that Thursday’s agreement “gives us great hope” and provides a “real chance” to ease the conflict. Even so, she said there’s “still a big effort to make” in future talks over Ukraine.
Poroshenko said control of Ukraine’s border with Russia would revert back to his government by year-end, contingent on a constitutional overhaul. While he also pledged to decentralize some powers away from Kiev, he rejected autonomy for the two breakaway eastern regions and refused to switch to a federal system of governance.
Other commitments in Thursday’s accord include a removal of heavy weapons to start not later than the second day after the truce and end within two weeks. The withdrawal should be overseen by the Organization for Security and Cooperation in Europe
