Russian and Ukrainian delegations have been wrestling to find a peace deal during the last week and progress seems to have been made, according to recent comments from both sides.

Ukrainian President Volodymyr Zelenskiy said again in his daily address on March 14 that peace talks were underway and “progress is being made.” He even cancelled his address to the European Parliament because of “pressing affairs of state” but he was also non-committal on the chances of a deal being reached. “We’ll see,” he said at the end of his video address to the Ukrainian people.

On the same day, Leonid Slutsky, a senior member of Russia's negotiating team, told the state-run television network RT that "significant progress" was made following several rounds of talks hosted on the border of neighbouring Belarus and that are now continuing by video call.

"If we compare the positions of both delegations at the start of the talks and now, we see significant progress," he told the network according to Russian news agencies. "My own expectations are that this progress could develop over the next few days into a unified position held by both delegations in documents to be signed," agencies cited him as saying.

The head of the Ukrainian delegation and senior advisor to Zelenskiy, Mikhailo Podolyak, was equally upbeat and wrote on Twitter that Russia had stopped issuing "ultimatums" and instead "carefully listens to our positions".

Could a deal be done? Observers say that finding a compromise will be very hard. Academics Arvid Bell and Dana Wolf published a paper this week in Russia Matters outlining the parameters of the deal.

The talks resumed on March 14 and are continuing on March 15. What gives some grounds for optimism is both sides have set up special working groups and are talking about “working on documents.”

The documents comment is important, as the Russian side has been arriving at the previous talks with documents they want the Ukrainian side to sign. You can safely assume these have contained clauses on the Kremlin’s key demands: Ukraine commits to neutrality; recognises Crimea as Russian; and recognises Donetsk and Luhansk regions as autonomous. 

The fact that there are sub-groups working specifically on documents covering these three demands strongly suggests the two sides see a real possibility of an agreement and are now thrashing through the details of how to implement and announce any resulting deal.

Worst possible acceptable deal

The basis of any deal will be working out what is the “worst possible acceptable deal” that the other side will agree to.

The pressure is on both negotiating teams. For the Ukrainian side it is simply to stop the death and destruction that the Russian army is inflicting on Ukraine. And the longer the conflict goes on the worse this will be. Russian President Vladimir Putin’s negotiating “tactics” have become transparent. As bne IntelliNews has argued, he is going step by step in a “game of chicken”, where at each level he cranks up the pressure and then pauses for talks.

The campaign started last December when the Russian Foreign Ministry issued its eight-point list of demands and then went through two rounds of diplomacy with first the US and then a second, led by French President Emmanuel Macron. The third phase began with the attack on Ukraine on February 24. However, once again the Kremlin was very quick to offer peace talks only a few days later on February 27 and as bne IntelliNews has reported, the fighting and casualties were limited while these discussions continued.

That phase came to an end after Ukrainian President Volodymyr Zelenskiy announced that while Ukraine was willing to discuss neutrality, he was not prepared to give up “one inch” of Ukrainian territory. The next day phase four started and rockets rained down on Mariupol, and cities across the country were subjected to increased bombardment. The death toll escalated dramatically and residents are now cowering in bunkers across Ukraine. The pressure on Bankova has been significantly increased.

“Russia is expanding its military operations and is using force deliberately against civilian targets to regain lost power at the table. Putin is using a strategy that negotiation scientists describe as “weaken your counterpart’s [best alternative to a negotiated agreement]” to reshape the zone of possible agreement to his advantage. The goal is to convince the weaker party (Ukraine) that it is better off with an unfavourable agreement (= accept Russian terms) than with a terrible alternative (= the complete destruction of Ukraine),” Bell and Wolf say.

But the Kremlin also finds itself under mounting pressure. While Russia remains in the stronger position as it massively outguns Ukraine, Russia is facing a burgeoning economic crisis, domestic dissent is rising quietly and while the military campaign is making progress more or less according to plan, it is not going well.

“If Russian President Vladimir Putin had indeed expected his military to take control of Ukraine quickly, as many have speculated, he had likely expected that his power at the negotiating table would be overwhelming: Should any “negotiation” have been necessary, the humiliated Ukrainian leadership would accept all Russian demands, including “demilitarisation,” the installation of a pro-Russian government, Russian “peacekeeping troops” and independence of the eastern regions of Ukraine,” Bell and Wolf said. “When the military campaign did not proceed as planned, Putin was suddenly confronted with what negotiation strategists call a lose-lose situation – trapped between a weak [best alternative to a negotiated agreement] and a low [worst possible acceptable deal] point: either a bloody war against a capable insurgency as best alternative to a negotiated agreement or a humiliating withdrawal deal between Moscow and a “gang of drug addicts and neo-Nazis” in Putin’s words.

As bne IntelliNews has argued, Putin needs a deal as soon as possible to limit the damage so the Russian side should be willing to compromise too – something the Ukrainian delegations suggest has already happened.

What are the worst possible deals that both sides would accept? Bell and Wolf map out the two most likely possibilities in their paper.

Ukraine agrees on self-imposed neutrality, consents to the annexation of Crimea by the Russian Federation and to the independence of Luhansk and Donetsk, and Russian “peacekeepers” are allowed to remain in Donbas. In return, Russia withdraws all troops from Ukraine and international security guarantees keep Ukraine safe from future aggression and attacks on its sovereignty.  

Russia withdraws all troops from Ukraine, including the ones in Donbas. Moscow rescinds its recognition of Donetsk People’s Republic (DPR) and Luhansk People’s Republic (LPR). Crimea remains part of Russia but is demilitarised. Ukraine joins the EU but not Nato and becomes neutral. In return, most sanctions on Russia are lifted and the US and Nato agree on a serious security dialogue with Moscow about the European security architecture.

These two positions remain far from each other and the only obvious common ground is for Ukraine to declare itself neutral. However, that is Russia’s main demand, so it is possible that Kyiv or Moscow or both are trying to agree on some face-saving formula to deal with the other two demands.

From the point of view of the negotiations the best possible deals are irrelevant, but Bell and Wolf suggest from a Ukrainian perspective, the best possible deal might include the ejection of all invasion troops, Russian reparation payments and immediate admission to Nato and the EU, plus full reintegration of Donbas and Crimea.

From a Russian perspective, the best possible deal might be the end of Ukrainian sovereignty (de facto or de jure), full control over Ukraine’s domestic politics and foreign policy and the US and Nato signing the security agreements Moscow circulated in December.

“But these aspirations do not inform the parties’ bargaining range. The bargaining range is defined by their “worst possible deal” options,” Bell and Wolf said in their paper.

There are several more factors at work in these talks. While they are nominally between Kyiv and Moscow, in reality the negotiations involve Russia, Ukraine and the US via its proxy of Nato. Moscow also has to account for Beijing’s interests, as a failure of the talks will drive Russia further into China’s arms and greatly extend their relationship.

Another problem is the pace of implementing peace in any deal that runs from an immediate end to hostilities to signing a new “Minsk 3” deal that will be implemented slowly and piecemeal. An even bigger deal could include commitments by Nato to setting up a new pan-European security infrastructure to replace or supersede the exclusive Nato-membership architecture that is the current set-up – another one of Moscow’s long-term goals.

Finally, Bell and Wolf speculate that currently the Kremlin is still capable of rational cost-benefit assessments, but that the longer the clash with the West goes on then the more decision making will come to depend on Putin alone, and “deviate from standards of rationality expected by decision-makers in Washington, Brussels or Kiev, especially in moments of crisis.”

Some commentators like Leonid Bershidskiy have already argued that Putin is no longer making rational decisions, but has been enraged by Ukraine’s defiance of Russia and is already acting purely on emotion.

If that is the case then the negotiations have very little chance of success as there are no negotiations, only Putin’s demands, and he has shown clearly that he is not bluffing. He will simply continue to increase the military pressure until he forces Kyiv into defeat, or is toppled in a coup.