By Mike Smith ,AFP
KIEV — It seems to have played out exactly as Western powers hoped: sanctions and falling oil prices have hit Russia hard, presumably making Moscow more willing to compromise on the conflict in Ukraine. But as is often the case with Russian President Vladimir Putin, the reality is far more complex. Despite its economic woes Russia still holds a number of trump cards in the Ukraine crisis and may be betting on the fact that the ex-Soviet republic to its west is in even worse straits, analysts say. ��If it’s a race to the bottom, then Ukraine will get there much faster than Russia … as they see it,�� said John Lough, Russia specialist at London-based think tank Chatham House. It is a dilemma Western nations have faced throughout the crisis in Ukraine, which is badly in need of financial assistance and has struggled to institute the kinds of reforms that could eventually put it on a sound footing. Corruption remains a major problem. The longer the war in the country’s east goes on, the more it will drain Kiev’s resources �X and the more help it is likely to require from the West. The International Monetary Fund has warned that Ukraine may need a further US$15 billion from world lenders this year, on top of a US$17 billion loan the IMF approved in April. Ukrainians may also lose faith if the conflict drags on, said Vadym Karasyov, director of the Institute of Global Strategies in Kiev.
��Putin wants Europe to get tired of Ukraine and lose interest,�� he said, warning of the risk of renewed unrest in other areas of Ukraine in the case of a protracted war. But Russia too would seem to be engaged in a risky gamble, apparently banking on European nations wavering on sanctions and oil prices making a recovery even as economists predict a deep recession.
The latest setbacks to a peace deal came this week, when a planned summit was postponed due to a lack of progress in talks between ministers in Berlin and a new wave of violence rocked Ukraine’s east. On Tuesday, 12 civilians were killed when a rocket hit a bus southwest of Donetsk, with both sides trading blame. It was the deadliest attack on civilians since a September truce that only partially stemmed the fighting between Ukrainian forces and Moscow-backed rebels.