Deutsche Bank not withdrawing completely from Russia

Deutsche Bank said it was not withdrawing completely from Russia, drawing anger from investors and contrasting with Wall Street banks which are severing ties with the country over its invasion of Ukraine. Banks and asset managers have joined many other Western companies in pulling back from Russia following a raft of sanctions on the country.

"We are often asked why we are not withdrawing completely from Russia. The answer is that this would go against our values," Chief Executive Christian Sewing said in a note to Deutsche Bank staff on Thursday.

He added that it would not be the right thing to do in terms of managing those client relationships and helping them to manage their situation.

Bill Browder, an investor campaigning to expose corruption, said that by staying in Russia, Germany's biggest bank is completely at odds with the international business community and will create backlash, lost reputation and business in the West.

Russian forces bearing down on Kyiv were regrouping northwest of the Ukrainian capital, satellite pictures showed on Friday, and Britain said Moscow could now be planning an assault on the city within days.

Tim Ash, senior emerging market sovereign strategist at BlueBay Asset Management, said it was "just not good enough from Deutsche Bank ".

"Perhaps Deutsche Bank needs to take a fresh look at its own ESG (environmental, social, governance) framework," he said.

Fund managers are reassessing their approach to governance as a result of the invasion.

Goldman Sachs Group and JPMorgan Chase this week became the first US banks to suspend business in Russia.

Goldman Sachs, which has a credit exposure to Russia of US$650 million, said on Thursday it was winding down its business there. Any losses would be immaterial, according to a source familiar with the situation.

JPMorgan also said it was actively unwinding Russian business and was not pursuing any new business there.

JPMorgan has about 160 staff in Moscow. The bank did not list Russia in the top 20 countries where it has the most exposure, in its most recent filings.

The world's biggest insurance brokers Marsh and Aon also said on Thursday they were halting operations in Russia.

Deutsche Bank said earlier this week its credit risk exposure to Russia and Ukraine was US$3.18 billion and that it had reduced its Russia exposure further over the past two weeks.

Credit Suisse, Italy's UniCredit and France's BNP Paribas have also disclosed billions of euros worth of Russia risk.

"Most European banks are applying the strictest sanctions and even going further, trying to do what is right and what needs to be done," Ana Botin, President of the European Banking Federation and Executive Chairman of Santander, said in an interview with Spain's El Mundo newspaper published on Friday.

While the potential losses among major European lenders are not big enough to threaten their stability, analysts and investors fear it could derail their turnaround plans and halt payouts to shareholders.

European banking stocks have had a reprieve this week, clawing back some of their sharp losses made since the invasion

 

China: Wildcard in Russia-Ukraine Conflict

Washington is focused on Chinese President Xi Jinping as President Joe Biden grapples with Russian President Vladimir Putin’s violent military campaign against Ukraine.  

Biden administration officials are calling on Xi and his government to join other nations in condemning Russia, while warning China of consequences if it tries to evade export controls on Moscow. 

China is viewed as a key player because of its influence with Russia, which is expected to grow as Moscow finds itself further isolated by Western sanctions. 

“If there’s anybody that could make a difference, it’s Xi Jinping,” said Charles Kupchan, who served as Senior Director for European affairs at the National Security Council in the Obama White House. “China is Russia’s lifeline right now, and if the Chinese discover the gumption to tell Putin that it’s enough, I think the impact would be very considerable.” 

“I do not yet see any signs that China is going to head down the road,” he added.  

CIA Director William Burns told Senate lawmakers on Thursday that Xi has been unsettled by the war playing out in Ukraine and the unity it has inspired in the West. Burns assessed that the Chinese leader is worried about global economic consequences as well as damage to his reputation from being associated with the ugliness of Russia’s war.  

“I think the Chinese leadership, President Xi, has invested a lot in partnership with President Putin and Russia. I don’t think that’s going to change anytime soon. It’s for a lot of very cold-blooded reasons. I do, however, think that President Xi is unsettled by what he has seen transpire in the last 15 days in Ukraine,” Burns told the Senate Intelligence Committee.  

“That’s raised some question marks in the minds of Chinese leadership as they look at what is going to be an enduring partnership but maybe with a few more concerns than they had 16 days ago,” he said.  

White House Press Secretary Jen Psaki on Wednesday pointed to a handful of actions China has taken that were viewed positively by the West, including Beijing’s decision to abstain from voting on a UN Security Council resolution condemning the Ukraine invasion. Some believed China would vote against it in a nod to Russia. 

Psaki also said that China has largely abided by sanctions the administration has imposed on Russia thus far. 

“I would note, though, that if any country tries to evade or work around our economic measures, they will experience the consequences of those actions,” Psaki said. 

“Our assessment right now is that they’re abiding by the requirements that have been put in place, but we would continue to encourage any country to think a lot about what role they want to play in history as we all look back,” she said. 

The administration has stepped up its rhetoric with China in recent days. 

Commerce Secretary Gina Raimondo told the New York Times in an interview published Tuesday that the US would penalize Chinese firms that violate US export controls imposed on Russia by preventing them from using American software. 

“They have their own self-interest to not supply this stuff to Russia. So they’re not doing it out of the goodness of their heart. It would be devastating to China’s ability to produce these chips,” Raimondo told the Times. 

Days earlier, Secretary of State Antony Blinken urged China to use its voice to condemn Russian aggression during a call with his Chinese counterpart.  

“They have an opportunity for leadership here and we are all urging them to take it,” Under Secretary of State for Political Affairs Victoria Nuland told the Senate Foreign Relations Committee on Tuesday.  

The White House failed to convince China to avert a Russian invasion of Ukraine before it happened.  

Xi and Putin celebrated their close relationship in an in-person meeting ahead of the opening ceremony of the Olympics in Beijing. The two sides released a joint statement declaring the China-Russia relationship had no limits.   

Burns on Thursday described that as the “most sweeping expression of their commitment to partnership” that the US has seen but noted that the war has since unsettled Beijing. At one point during his testimony, Burns said China’s own intelligence didn’t appear to foresee Putin’s attack. 

The US is also watching China closely over concerns that Putin’s invasion of Ukraine will embolden Xi to launch a military takeover of Taiwan, the self-governed democratic island that Beijing views as a rogue territory.  

The administration in early March sent a high-level, non-governmental delegation to Taiwan in a show of American solidarity. The United States is required by law to provide Taipei with the military means and assistance necessary to repel a possible Chinese invasion. 

It’s unclear whether Biden will seek a call with Xi about Ukraine. The two leaders last spoke one-on-one during a virtual meeting in November. The White House made clear after Russia began its invasion that Biden was open to a call with Xi.  

“China is not going to reassess its view on the China-Russia relationship fundamentally on this alone,” said Michael O’Hanlon, a senior fellow at the Brookings Institution. “But we can make it more painful for China.”  

O’Hanlon noted that China would be the key to putting pressure on Russia to agree to some kind of diplomatic solution to the crisis in Ukraine. 

The Chinese leader earlier this week spoke jointly with French President Emmanuel Macron and German Chancellor Olaf Scholz. In its readout of that call, China said that Xi expressed support for peace talks between Ukraine and Russia and warned that sanctions were not in the global community’s interest.  

The relationship between the US and China has grown more confrontational in recent years, as former President Trump waged a trade war with Beijing. Biden has since made competition with China a centerpiece of his domestic economic agenda.  

Still, China maintains robust trade relations with the West and Europe in particular. A close association with Putin threatens to disrupt that.  

“They still find the international system useful to them. They are not risk takers the way that Vladimir Putin is,” Evelyn Farkas, deputy assistant secretary of Defense for Russia, Ukraine, and Eurasia, said of the Chinese. “If they stand with Russia, the world will condemn them.”  

Russia clarifies demanding written guarantees from United States

Russia has provided clarifications on its demand for written guarantees from the United States regarding the talks in Vienna over reviving the 2015 Iran nuclear deal. The clarifications were offered in a briefing at the Russian Embassy in Tehran with a limited number of reporters.

In the meeting, Russian Ambassador to Iran Levan Dzhagaryan spoke in detail about the Russian special military operation in neighboring Ukraine. But he also spoke broadly about the Russian demand in Vienna.

Responding to questions from the Tehran Times about the nature of guarantees Russia is now demanding at the Vienna talk, the Russian Ambassador lambasted Western media for spreading misinformation about the Russian demand, underlining Moscow’s positive approach toward the 2015 nuclear deal, formally called the Joint Comprehensive Plan of Action (JCPOA), both during the 2015 negotiations that culminated in the deal and the current talks to revive it. 

“You now are hearing contradictory voices claiming that Russia does not want the JCPOA talks to succeed,” the ambassador told the press briefing, noting that these voices are wrong. “Russia has adopted a positive approach toward both the JCPOA negotiations in 2015 and the current talks. But it is natural that we will take into account our interests,” he added. 

The Russian demand for guarantees was first made public by Russian Foreign Minister Sergey Lavrov in a joint press conference with Kyrgyz Foreign Minister Ruslan Kazakbayev in Moscow on March 05.

Responding to a question on the prospect for the conclusion of the Vienna talks in the near future, Lavrov said, “Some problems regarding the interests of the Russian Federation have arisen recently. Agreements on resuming the JCPOA provide for a package of reciprocal commitments.”

He added that the original JCPOA provided for the absence of any obstacles to trade, economic and investment relations with Iran and to the implementation of military-technical cooperation projects with it. This could seem all right, but the avalanche of aggressive Western sanctions that is still rolling down gives one food for thought. These sanctions should be primarily reviewed by the lawyers.

He then broached the issue of guarantees. “We would like to receive a clear answer. We need guarantees that sanctions will not affect in any way the regime of trade, economic and investment ties set out in the JCPOA on Iran’s nuclear program. We asked our American colleagues (because they are running the whole show here) to give us guarantees in writing, at least at the level of the Secretary of State, that the current process launched by the US will not impinge in any way on our free full-scale trade, economic, investment and military-technical cooperation with the Islamic Republic of Iran,” he said.

The European parties to the JCPOA hinted that the Russian demand is extraneous in their March 08 joint statement to the IAEA Board of Governors.

Iran has so far refrained from evaluating the Russian demand and preferred to pursue the matter through diplomatic channels. Iranian Foreign Minister Hossein Amir Abdollahian spoke over the phone with Lavrov on Monday. Dzhagaryan said the two went over the Russian demand for guarantees in detail. 

The Russian Foreign Minister told his Iranian counterpart that the resuscitation of the JCPOA should ensure that all its participants have equal rights regarding the unhindered development of cooperation in all areas without any discrimination, according to a Russian Foreign Ministry statement.

Dzhagaryan reiterated this in his Wednesday briefing, saying that Russia wants the Vienna talks to achieve its goal. But we will also take into account our interests, he reiterated.

When asked to provide details about the guarantees Russia is seeking, the Ambassador said he is not authorized to give details in this regard. But he said, “We asked the United States. to give us a clear text on the guarantees which does not have any brackets so that we review it.”

Dzhagaryan said he is in regular contact with Iranian officials and they are fully aware of the Russian demand.

The Tehran Times asked the Russian ambassador whether the possible Western failure to provide written guarantees would impinge on the conclusion of the Vienna talks. “I’m not authorized to make predictions. Only the heads of the negotiating delegations in Vienna and the high-ranking officials in Moscow are in the know about this,” he said.

 

United States disappoints Ukraine, once again

The Pentagon on Wednesday spelled out reasons for not supporting the transfer of aging Polish fighter jets to Ukraine, calling it a high risk plan that would likely heighten tensions with Russia.  

Defense Secretary Lloyd Austin, in a morning conversation with his Polish counterpart, said the US government does not support the transfer of MiG-29 aircraft to the Ukrainian Air Force at this time, Press Secretary John Kirby told reporters. 

The United States does not want Poland to directly transfer the aircraft to Ukraine, nor does it want Warsaw to first give the MiG-29s to Washington to then give those to Kyiv, as publicly suggested by the Polish Government on Tuesday. 

“The intelligence community has assessed that the transfer of MiG-29s to Ukraine may be mistaken as escalatory and could result in significant Russian reaction that might increase the prospects of a military escalation with NATO,” Kirby said.  

“Therefore, we also assess the transfer of the MiG-29s to Ukraine to be high-risk.” 

NATO ally Poland caught Washington off guard with the announcement it would transfer its fleet of MiG-29s to the US military’s Ramstein Air Base in Germany, a move that would allow Washington to then move the jets to Ukraine. Kyiv has begged Western officials for the Russian-made combat aircraft, which its pilots are trained to fly.  

But the Pentagon swiftly met the announcement with one of its own on Tuesday, calling the plan untenable, due to the geopolitical battlefield that is moving jets from a US-NATO base to a non-alliance country to help in its fight against Russia. The Kremlin warned this week that such a move could be seen as NATO inserting itself into the conflict.   

The United States has already quickly moved to send Ukraine hundreds of millions of dollars in lethal aid — including a US$350 million package approved late last month — but Wednesday's announcement appeared to draw a line at transferring combat aircraft. 

Kirby said the US is not drawing a red-line here, but would not detail the sausage making of how this particular decision was made. 

The US believes the best way to support Ukraine is by providing the weapons and the systems that they need most to defeat Russian aggression, in particular anti-armor and air defense, Kirby said. 

He also asserted that the Ukrainian Air Force already has several squadrons of mission-capable aircraft and adding to the inventory is not likely to significantly change the effectiveness of the Ukrainian Air Force relative to Russian capabilities. 

In addition to ruling out combat aircraft transfers, at least for now, Washington has repeatedly stressed it would not send US troops into Ukraine to fight or to patrol the skies.  

The United States also does not support a no-fly zone over Ukraine over fears it could set off another world war with nuclear-capable Russia.

Austin will travel to Brussels next week to meet with his NATO counterparts, where the Ukraine-Russia conflict will likely dominate talks, Kirby said. 

 

Russia-Ukraine conflict: Indian dilemma

Russian war in Ukraine has exposed Indian strategic vulnerabilities as few other things could, raising fundamental questions about the country’s position in the world, its regional security and the wisdom of its long-term relationships.

India abstained in a succession of United Nations votes—in the Security Council, the General Assembly and the Human Rights Council—condemning the Russian invasion. In its initial explanation of vote, India didn’t even mention Russia or deplore the invasion. Instead, India merely urged a de-escalation of the conflict by those involved, as if both countries were belligerents, when in fact there is an obvious aggressor and a clear victim. India didn’t even object to Russia’s earlier recognition of the independence of the separatist Ukrainian regions of Donetsk and Luhansk.

In subsequent statements, Prime Minister Narendra Modi’s government has at least reiterated India’s longstanding principles, while calling for ‘concerted efforts from all sides to return to the path of diplomatic negotiations and dialogue’. In the face of mounting casualties—including an Indian student killed by Russian fire while queuing for food in Kharkiv—Modi’s government continues to call in vain for peace, while ensuring that no criticism, let alone condemnation, of Russia passes official lips.

The reasons for India’s reticence are easy to discern. For starters, Russia supplies India with about 50% of its weapons and defence equipment. And while India’s other commercial ties with Russia are much more modest than those it has with the United States, diplomatic relations with the Kremlin have been close since the days of the Soviet Union. Soviet vetoes at the UN frequently shielded India on Kashmir, and the Kremlin’s protection was indispensable during the 1971 Bangladesh War of Independence, when the US and China supported Pakistan.

Russia’s increasing closeness to, and geopolitical affinity with, China has therefore been worrying Indian policymakers for some time. The Kremlin has also been visibly warming to Pakistan, China’s client state. Pakistani Prime Minister Imran Khan was in Moscow on the day Russia invaded Ukraine, and continued with his meetings, including with President Vladimir Putin—a clear sign that Russia’s calculations in the subcontinent have shifted. India seems to feel that it needs to cling to Russia’s goodwill in order to avoid losing it altogether.

But India has also been looking west in recent years, building a strategic partnership with the US that includes increasingly significant defence ties. It has embraced the US-led Quad (an informal four-country grouping that also includes Japan and Australia) as a useful counter to China. But Indian leaders realize that their continuing failure to join their Quad partners in opposing Russia’s invasion could jeopardize these links. The government thus finds itself on a tightrope, anxious not to fall to either side.

The war in Ukraine poses another strategic challenge for India. Until the crisis began to escalate late last year, the US seemed to be focusing on the global threat posed by China, and on the Indo-Pacific rather than Europe. But America may now revive its adversarial obsession with Russia. That could reduce US hostility towards China, India’s menacing northern neighbor, which has repeatedly encroached on Indian Territory along the two countries’ disputed Himalayan border, even killing 20 Indian soldiers in an unprovoked attack less than two years ago.

All this is happening at a time when the security threat from Afghanistan is at its greatest since the Taliban were last in power two decades ago. China’s build-up of military infrastructure in the region, its financial patronage of the Taliban, its opening to Iran (which cooperated with India in countering the previous Taliban regime) and an increase in Pakistani-supported militancy in Kashmir have put India on the defensive. Russia, China and Iran recently conducted joint naval exercises in the Indian Ocean.

India’s traditional allies in the region can sense which way the wind is blowing. Nepal has allowed China to build major railway lines and highways across its northern border areas. Bhutan signed a border agreement last October that surrenders territory coveted by China, giving the Chinese an advantage in any future conflict with India. Most of India’s other South Asian neighbors have signed up to China’s Belt and Road Initiative, which India strenuously opposes.

China’s increasing influence over these countries undermines India’s diplomatic position in its own backyard. And to the east, the ruling junta in Myanmar has declared a ‘special kinship’ with China, whereas its predecessor had come to see India as a valuable counterbalance to China.

In short, Russia’s invasion of Ukraine has placed India in an unenviable position. Ideally, India would have liked to continue strengthening its partnerships with Western democracies, especially Australia, France, Japan, the UK and the US, while maintaining its traditional closeness to Russia, in the hope of deterring China from further encroachment on India’s core security interests. Instead, India finds itself between a rock and a hard place. It could antagonize the West while still losing Russia to China’s embrace, even as Pakistan—with friendlier Afghan and Iranian neighbors—feels emboldened in Kashmir.

The conflict in Ukraine is posing a profound challenge to Indian grand strategy. Non-alignment is hardly an option for a country with antagonistic neighbors seeking to violate its borders. India’s traditional reluctance to choose sides on major international issues could prove highly costly in the not-too-distant future, when it wants other countries’ support. It will be either Hobson’s choice, or Modi’s.

 

Russia or United States: Who benefits from revival of Iranian nuclear deal?

Russian invasion of Ukraine is throwing into doubt global efforts to revive the nuclear deal with Iran, just as international mediators appeared poised to announce a breakthrough.

Negotiators from the United States, Europe, Russia, China and Iran had largely managed to seal themselves off from outside crises around the globe over nearly a year of talks in Austria.

But international condemnation against Russia and a globally coordinated sanctions regime – now targeting Russian oil exports, its main financial artery – is reverberating through the conference rooms in Vienna.

“The Russia-Ukraine crisis has certainly cast a darker shadow over the talks than it did a few days ago,” said Naysan Rafati, senior analyst on Iran for the International Crisis Group.

Biden administration officials say that Russia has a key stake in reviving the agreement to reduce global risk for another nuclear-armed state, despite Russian President Vladimir Putin waging war against the West.

“Russia, for its own reasons, has chosen to be a participant in these negotiations because it wants to see Iran's ability to get a nuclear weapon constrained,” Victoria Nuland, Undersecretary of State for political affairs, told the Senate Foreign Relations Committee on Tuesday.

Nuland said negotiators in Vienna have nearly completed an agreement on a pathway for the US and Iran to return to compliance with the Joint Comprehensive Plan of Action (JCPOA), the formal name for the nuclear deal that former President Trump withdrew from in 2018.

But Russian and Iranian officials in recent days have issued statements laying out hard-line demands and casting doubt on the potential of the talks concluding.

Iran’s President Ebrahim Raisi said Tuesday that Tehran would not abandon its red lines over rejoining the deal, which are said to include guarantees that would bar any future US presidential administration from withdrawing from the deal, lifting all sanctions and allowing Iran a measure of recourse if United Nations sanctions were reimposed in a so-called snap-back, according to Iran’s semiofficial FARS News agency.

Russian Foreign Minister Sergey Lavrov has recently pressed for Russia to have unhindered access to the Iranian market when sanctions are lifted against Tehran, as Moscow is buckling under sanctions imposed over its invasion of Ukraine.

Russia’s ambassador to Iran, Levan Dzhagaryan, reiterated on Wednesday, “The negotiations on the nuclear deal with Iran should take into account the legitimate interests of Russia in the implementation of comprehensive cooperation with Iran.” 

Yet Nuland, in front of lawmakers, said the US would not bow to Russian extortion efforts related to the nuclear deal.

“Russia is trying to up the ante and broaden its demands with regard to the JCPOA and we are not playing let us make a deal,’” she said.

Meanwhile, critics opposed to the nuclear deal in general are expressing fury over Russia potentially benefiting from sanctions relief on Iran.

“Let me get this straight, we're working hand in glove with Vladimir Putin to reach a deal that will help Russia evade sanctions being imposed for its aggression in Ukraine and work with its ally, Iran,” Senator Bill Hagerty, a member of the Senate Foreign Relations Committee, said on the Senate floor on Tuesday.

Senator Bob Menendez, Chair of the Senate Foreign Relations Committee and an opponent of the deal, said “I am specifically concerned that returning to the JCPOA will benefit Russia economically at a time when the international community is committed to squeezing Moscow.”

Former Secretary of State Mike Pompeo, who was the architect of the Trump administration's maximum pressure sanctions campaign on Iran after the US exit from the deal, called it “completely nutty” to both work with the Russians in Vienna and consider lifting terror designations on Iran, “who are trying to kill people all across the world.”

“But the Biden admin is doing both,” said Pompeo, who is considered a potential 2024 Republican presidential candidate.

The Biden administration argues that reviving the Obama-era nuclear deal is the best chance to box in Iran’s nuclear ambitions, with the regime in Tehran having significantly advanced its nuclear stockpile of weapons-grade uranium and infrastructure for building a bomb since it started violating the agreement’s terms in 2019. 

“Nuclear capability of the kind that we don't want to see could come to Iran in a matter of weeks and months if we don't get them back into this agreement,” Nuland said, “That is not good for the planet. And to have both Iran and Russia able to threaten all of us in that way would be catastrophic at this time, not to mention what they might do if they teamed up.”

A restoration of the JCPOA is likely to entail the Biden administration lifting specific sanctions on Iran in exchange for Tehran disposing of its nuclear material stockpiles and opening itself up to intrusive monitoring by international nuclear watchdogs.

Suzanne DiMaggio, an expert on diplomacy with Iran at the Carnegie Endowment for International Peace, said the Russians’ most recent demands for access to the Iranian market could be met using legal carve outs, if they are limited to the implementation of a restored JCPOA.

“But if the goal is broader – such as sanction-proofing a range of Russian interactions with Iran beyond the scope of the deal – it will complicate things,” she wrote in an email to The Hill. 

“The implications are still unclear because the Russians haven’t clarified their objectives. The longer they take to spell out their end goals; it appears their intention is to derail the process.”

Behnam Ben Taleblu, a senior fellow at the Foundation for Defense of Democracies, said that reaching an agreement is still possible with Russia’s eleventh-hour demands, but it does require grit and a willingness to delay the deal.

“Make no mistake, Russia is looking to use Iran as a sanctions busting hub to offset Ukraine-related sanctions pressure,” he wrote in an email to The Hill.

“Russia and Iran have often raised last minute demands in negotiations in a bid to get more and offer less. What makes this different is Russia's raging war in Ukraine.”

Both US and European officials have stressed that the indirect talks between the US and Iran over the past 11-months in Vienna are nearing an end, either to revive the JCPOA or allow it to become obsolete.

Iranian officials have refused to engage directly with the Biden administration in objection to Trump’s withdrawal from the deal, a position DiMaggio urged Iran to reverse. 

“The Iranians should seriously consider moving from indirect to direct communications with US negotiators,” she wrote to The Hill. 

“If the talks collapse, there will be efforts to get them back on track, but it will take time and it’s possible that the JCPOA will no longer be the vehicle. In such a case, we shouldn’t expect that either the Biden administration or the Iranians could easily pivot to a new basis for negotiations given rapidly changing circumstances. 

While Moscow’s new demands may kill the talks, there are some signals that the Vienna negotiators could announce an agreement shortly. 

Rafati, of the International Crisis Group, said an agreement reached by Iran and the International Atomic Energy Agency over the weekend to resolve an investigation into uranium particles at old yet undeclared sites signaled one step forward on a key sticking point. 

And Iran’s chief negotiator in the nuclear talks, Ali Bagheri Kani, reportedly returned to Vienna on Wednesday after discussions in Tehran with Iranian leaders, a strong signal that specific decisions are being reached.

Russia’s representative in the talks, Mikhail Ulyanov, tweeted on Wednesday that negotiators are at the very last stage of the diplomatic marathon towards restoration of the deal.

 

 

What is going on in negotiations between Russia and Ukraine?

Three days after Israeli Prime Minister Naftali Bennett met with Russian President Vladimir Putin in Moscow, the details are beginning to emerge. According to people who were privy to details about the meeting, the current situation is that Russia has offered a "final" version of its offer to end the crisis, which Ukrainian President Volodymyr Zelensky needs to accept or decline.

The proposal was deemed difficult but not impossible, the sources said. It is worse than what Zelensky would have gotten before the invasion but the gaps between the sides are not great.

Putin ordered his forces to halt – and the command for a ceasefire to be enacted was given – in order to wait for Zelensky's decision, the sources said. 

If Ukraine's President rejects the proposal, French President Emmanuel Macron's assumption that the worst is before us is prone to happen. In that scenario, Putin will order his army to put the pedal to the metal and change the face of Ukraine. 

Zelensky is torn, the sources said. On the one hand, he is enjoying immense popularity and has become the perfect Che Guevara. On the other hand, he knows well what the Argentinean revolutionary and guerrilla leader's end was.

Zelensky can fortify Ukraine's independence but will have to pay a heavy price, the sources said. Assumptions are that he will be forced to give up the contested Donbas region, officially recognize the pro-Russian dissidents in Ukraine, and pledge that Ukraine will not join NATO, shrink his army and declare neutrality. If he declines the proposal, the outcome may be terrible, thousands, perhaps tens of thousands of Ukrainians will die and there is a high probability that his country will completely lose its independence.

According to the sources knowledgeable about the content of the talks, Bennett's trip to Moscow was not meant to mediate between the sides and no arbitration proposal was officially offered. Rather, the trip was meant to get a sense of what Putin's position was, what his state of mind was and what his redlines were, and report them to the West. 

The real negotiations, according to the sources, are happening directly between Russia and Ukraine and are much more serious than what the West has been saying. Kyiv has not shared with the West what has been going on in the negotiations since they do not want to damper the worldwide sense of emergency. 

In reality, the Ukrainians know well what Putin's demands are and they know they will have to make a dramatic decision in the coming days.

No one will pressure the Ukrainians, the sources said; the decision is Zelensky's.

One thing is certain, Putin is determined, and the growing complications since the invasion will not deter him. On the contrary, he cannot turn back, so the more the war becomes difficult and casualties mount, the more he will be pressured to show real achievements. 

The impression is that, despite the fact that the predictions of a quick victory over the Ukrainian army have been proven false, Putin is as determined as ever.