@tashecon blog
JUL 27, 2024
Lots of interesting developments around Ukraine over the past week or so, that might just suggest that momentum might again be building for peace talks over the next few months.
First, Ukraine seems to have made really significant concessions in negotiations with bondholders over the past few days, which gives the prospect of a debt restructuring by September. The question was why bother rushing if the outlook on ending the war was so uncertain, and Ukraine would never have market access as long as the war was on-going? It only begins to make sense if someone is thinking here that the war might end sooner rather than later, and Ukraine then would need access to markets to help with the huge reconstruction needs.
Eurobonds rallied hard since Monday (up 5-10 points) on the announcement of the deal, a reflection of just how “friendly” this deal is for bondholders.
Second, the very controversial Orban trips to Kyiv, Moscow, Beijing and then Maro Lago. I know he got lots of flak for this, but there is no smoke without fire, surely.
Third, a trip by Boris Johnson to Maro Lago following which he published his own plans for a peace in Ukraine:
Notable here that Boris seems to have backed down from his prior hard ass pro Ukrainian stance of not giving territorial concessions to Russia. Not sure if all those Boris Johnson roads will now be renamed in Kyiv. But Boris seems to have picked something up here from the Trump team, surely.
Great write up by Lawrence Freedman, btw.
https://www.newstatesman.com/world/europe/ukraine/2024/07/is-there-a-peace-plan-for-ukraine
Fourth, Ukrainian foreign minister, Kuleba, finally make a visit to China, the first by a Ukrainian FM since the invasion, as prior the Chinese did not want to put Putin’s nose out of joint. The Saudi FM was also in Kyiv a week or so back, again a first of the kind, post invasion.
The joint Ukraine – China communique is telling, with Ukraine seemingly being brought into the one belt one road plan, and also accepting the One China policy – the latter something of a blow to erstwhile friends in Taiwan. Kuleba is also talking about the need for “serious” peace talks with Russia, and some joint Chinese-Brazilian peace deal. Previously Ukraine downplayed these as they saw them as too favourable to the Russian narrative.
Fifth, really interesting opinion polls, suggesting that opinion is changing in Ukraine towards making concessions.
My base case since the invasion has been that a compromise deal would involve a) Russia goes back to the position as of Feb 23, 2022, so moved back out of Zaporizhiya and Kherson. b) Ukraine agrees to talks over the long term future of Crimea, DPR and LPR, without actually agreeing their loss at this stage. This would kind of kick the can, kind of northern Cyprus scenario; c) Maybe no commitment on NATO membership for Ukraine for the time being, but the West needs to give some serious security guarantees (think Israel style as per the U.S.). d) Ukraine needs EU membership.
Seems that we are seeing momentum as there is generally fear now that if Trump wins in November, Western support for Ukraine drops off a cliff – better for Ukraine to negotiate from a position of some relative strength before then. Notable now that the West is front loading disbursements to Ukraine from the $61 billion US package agreed by Congress in
April, and the $50bn package from interest earned on frozen RU assets. Ukraine is getting F16s as I write – a friend told me of huge US transport planes flying out of Eindhoven airport this week.
I think there is perhaps a desire from some in the West not to give Trump that win he keeps talking about, but instead give it to the dregs of the Biden presidency, or even give a bounce to Kamala.
On China, I wonder if also Beijing is thinking that by now kick starting a peace they can help avoid a Trump win, as that’s surely their nightmare scenario for November. Interesting also that China seems to have been annoyed by Putin’s deepening friendship with North Korea – that has put China’s nose out of joint for sure.
Perhaps Trump’s choice of Vance as VP has been the final straw for China as they now anticipate the mother of all trade wars in Trump 2.0, or Vance 1.0, if Trump fails to serve out his full term, after all, if elected, he will be the oldest ever elected president. The reality is that under Biden, and following the Russian invasion, the US has pulled its punches on trade tariffs on China – I think thankful that China has not gone all in in support of Russia. China thinks it can deal with a Harris presidency, whereas I think the China hawks in the GOP are just not for turning – they actually think this all ends up in an actual war with China.
On Russia – my regional contacts are telling me that Putin really wants a deal now, and particularly, sanctions are really annoying Putin (not sure if hurting the economy that much, but they are a real embarrassment and take away from Russia’s desire to be seen as a global power. Perhaps notable as the West’s tightening of secondary sanctions seems to be really hurting Russia now).
Perhaps you could argue that Putin might want to hold out until November and a Trump win to give him max concessions. However, if China pushes for a deal before then it is hard to see Russia resisting as Western sanctions might hurt but not collapse the Russian economy, but if China pulls the plug in support for Russia its economy does collapse.
Risks are obviously plenty here.
a) Will any peace involving any territorial concessions (even talks on the long term future of Crimea DPR and LPR) just politically destabilise Ukraine, and that might provide future opportunity for Putin to invade again.
b) Putin might in any event not be serious, and just mindful to use a ceasefire to regroup and rearm ready for the next invasion.
Actually on the latter, that is my personal view, that Putin wants the whole of Ukraine, and that he cannot help himself. He will go in again at some point in the future, so the strength of the security assurance/guarantees given to Ukraine as part of any peace deal are so important. Budapest Memo 2.0 just does not stand to muster. Ukraine needs Israel style assurances of financing/arming/backstop, or NATO membership.
© 2024 Timothy Ash
548 Market Street PMB 72296, San Francisco, CA 94104
…………………………….
FROM LINKEDIN:
Mark McNamee
Co-Founder and Owner of Ukraine Business News Network
Should we be so scared of a Trump presidency for Ukraine?
Short answer: Yes, but maybe not so much (…and maybe he’d help Ukraine win)
Obviously we need to be concerned. A transactional president with a proven record of deserting allies, cozying up to dictators, and disregarding rule of law cannot be relied upon to support Ukraine. And particularly for a presidential candidate who has no declared strategy on such a vitally important foreign policy issue.
However, there are reasons for optimism. In a recent WSJ article, Trump’s former Secretary of State Mike Pompeo – who could serve in a Trump administration – has now outlined a strategy that focuses on victory, something Biden’s administration has failed to do. Far from selling Ukraine down the road, Pompeo in Reagan-esque fashion talks about “peace through strength”: provide enormous defense support to Ukraine, hit Russia’s oil revenues, strike Russian territory, Ukraine in NATO/EU asap. Bravo.
Add to that, we should remember that Trump permitted Speaker Mike Johnson to pass the $61 bn supplemental aid bill in April.
And lastly, consider what we know about Trump’s character: an unabashedly vain man who cares enormously about his reputation and legacy. To start a 4-year term with a failed strategy on this era-shaping war will be both impossible to hide and impossible to avoid accountability.
I don’t want to get too optimistic and there is a lot to fear with Trump as president, but these last few months have eased some worries.
Ukraine Business News UBN Network
“Notable here that Boris seems to have backed down from his prior hard ass pro Ukrainian stance of not giving territorial concessions to Russia. Not sure if all those Boris Johnson roads will now be renamed in Kyiv. But Boris seems to have picked something up here from the Trump team, surely.”
Boris ; affectionately known as “Borisuk” to Ukrainians, who presented him with his own Ukrainian coat of arms, inexplicably switched from no ceding of land to the rat nazi to the hopelessly discredited Trump/Kissinger land for peace variant, leaving Ukrainians feeling more than somewhat confused.
Boris’s Daily Mail article reads like a prototype of what Trump is likely to pitch to Zel.
But now, confusingly we have the Mike Pompeo outline in the WSJ, which has some proposals that the Ukrainians can work with.
It’s all confusing and sad, because good people keep getting murdered by vermin every single day without relief and still no end in sight.
What a dumb article. Ash is grasping at straws. When I got to the Crimea part, I quit reading.
Have you heard of friendly fire?
Amongst other things, Timothy Ash writes for the Kyiv Independent. Here’s what they say about him :
“Timothy Ash is an associate fellow at the Chatham House’s Russia and Eurasia Programme. Ash is also a senior emerging market (EM) sovereign strategist at BlueBay Asset Management.”
Whereas you are just a piss-ass commenter with a name that a schoolboy might have come up with.
Mr Ash makes his Substack posts free of charge to subscribers. He is strongly pro-Ukraine and has written on the topic for years. He is expressing an opinion, supported by links.
You might disagree with his output, but calling his work dumb is unfounded and says more about you than about him.
Forgive me if I don’t give you my resume, but Ash is still an idiot. And the Kyiv Independent, bless their hearts, after breaking away from the KP, brags about their willingness to criticize Ukraine with tough investigative reporting. Sometimes, as here, they are very wide of the mark. Just when Ukraine i on the verge of retaking Crimea, they talk about it as a bargaining chip. Ugh.
And Ash seems to be more interested in playing the bond market for team negotiate than in Ukraine winning.
Talks would have meaning only if Putin negotiates in good faith. Vlad Vexler, a Russian now living in teh UK, is convinced Putin will never negotiate in good faith and will simply use the subsequent period of peace to rebuild and then invade again. I agree. Putin is a known liar and can not be trusted in anything.
Vexler has two you tube channels, both worth your time:
https://www.youtube.com/@VladVexler/videos
https://www.youtube.com/@VladVexlerChat/videos
My apologies to the Kyiv Independent and the Kyiv Post. It was the Kyiv Post (English Edition) who first published this article.