Ukraine and Russia showed some signs of progress in negotiations Wednesday as Kremlin spokesman Dmitry Peskov said a proposal for Ukraine to become a neutral country but retain its own armed forces “could be viewed as a certain kind of compromise.”
Ukrainian President Volodymyr Zelenskiy said Russia’s “positions in the negotiations sound more realistic” in an address to the nation, though he said efforts are still needed to reach an agreement.
Stocks rallied to session highs after the Financial Times reported that significant progress was being made in the talks underway between the two sides to try to end the war, even though many obstacles to a deal remain. The S&P 500 jumped as much as 2% before trimming gains.
But a Ukrainian official cautioned that issues remained and said the negotiations had not yet progressed significantly. The official, who has direct knowledge of the talks, said the more positive tone from Russia was more about it wanting sanctions pressure eased than about getting toward a deal with Ukraine. The official pointed out that Russian attacks on cities were continuing unabated.
German foreign minister Annalena Baerbock also doused hopes for a snap deal. “We don’t know if these are really talks,” Baerbock told lawmakers in the German parliament on Wednesday. “We shouldn’t fool ourselves. If one side speaks about peace talks and at the same moment bombards hospitals and civilian buildings, then this is not really about talks.”
Peskov declined to provide details of the neutrality proposal beyond confirming that something modeled on Sweden or Austria is under discussion as the war reaches its 21st day.
Only a “Ukrainian” model with enforceable security guarantees is acceptable to Kyiv, Ukrainian presidential adviser Mykhaylo Podolyak said by text message. “This means that the signatories do not stand aside in case of attack against Ukraine as they do now.”
The two sides were scheduled for a round of talks Wednesday. Peskov’s comments came after Russia’s chief negotiator, Vladimir Medinsky, reported “some progress” in the negotiations, but warned that some issues remain unresolved. Late Tuesday, Russian President Vladimir Putin sounded a more downbeat note, accusing Kyiv of not being serious enough about seeking compromises.
Russian Foreign Minister Sergei Lavrov also indicated there’s some hope for compromise, as he said that Moscow’s demands for Ukraine’s neutrality are under serious discussion though the talks aren’t going easily.
Ukraine was pressing for membership of the North Atlantic Treaty Organization before the war, though Zelenskiy has indicated he recognized there’s little prospect of the alliance accepting his country any time soon. He has called for Ukraine to receive firm guarantees of its sovereignty.
Russia had demanded full demilitarization of Ukraine when Putin ordered the invasion Feb. 24 but now appears to be backing away from that demand.
Russian forces continue to strike infrastructure targets though the overall military situation is largely unchanged, the General Staff of Ukraine’s Armed Forces wrote on Facebook. The state emergency service said a shell hit a 12-story apartment building in the capital Kyiv, causing a fire and injuries. Russia’s Defense Ministry said its forces are advancing through urban areas in the town of Sievierodonetsk in the eastern Luhansk region.
NATO defense ministers are in Brussels to discuss ways to reinforce the alliance’s eastern members and prevent spillover from the war in Ukraine, a risk illustrated by recent crashes of drones. U.S. President Joe Biden will travel to Europe for NATO and European Union summits next week, while Zelenskiy delivered a virtual address to the U.S. Congress on Wednesday.
The image of Sweden as a neutral nation stems from its decision to stay out of both world wars, and keep outside of the superpower blocs during the Cold War. Even so, the biggest Nordic country has entered into cooperation with NATO since the collapse of the Soviet Union in 1991. After Russia’s 2014 annexation of Ukraine’s Crimea peninsula, Sweden began to gradually ramp up military spending and sought ever closer cooperation with the defense alliance.
Austria freed itself from a decade of allied, including Soviet, oversight following World War II after declaring irrevocable military neutrality in 1955. The position, enshrined in the constitution, prohibits the country from joining military alliances and from allowing foreign military bases on its territory. Unlike some Nordic peers, the government in Vienna has rejected calls to consider joining NATO in the wake of Russia’s invasion of Ukraine.
