(Bloomberg) — Russian President Vladimir Putin said he’ll decide later Monday whether to officially recognize separatists in eastern Ukraine, a move that would likely torpedo European-mediated peace talks and further escalate tensions with the West.
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A meeting of Putin’s Security Council held on the issue came against a backdrop of heightened concern over Russia’s troop buildup near Ukraine, even as Moscow continues to deny it plans to invade. Russia’s military said it had killed five “saboteurs” and destroyed two Ukrainian armored personnel carriers it said crossed into its territory. Kyiv denied the claim.
A diplomatic flurry continues to try and avert a potential conflict, although those efforts suffered a setback on Monday as Moscow said there were “no concrete plans” for a summit between Putin and U.S. President Joe Biden, throwing into question the fate of a French proposal publicized hours earlier. German Chancellor Olaf Scholz will speak with Putin later Monday while French Foreign Minister Jean-Yves Le Drian spoke with Russian counterpart Sergei Lavrov by phone and invited him to Paris on Friday for talks.
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Explainer: Why Minsk Accords Are Murky Path for Ukraine Peace
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EU Yet to Agree Potential Sanctions if Moscow Recognizes Regions (5:15 p.m.)
Several European Union leaders have already called for sanctions should Putin opt to recognize the separatist territories in eastern Ukraine. The bloc would likely agree to some restrictive measures as the move would be seen as a violation of the Minsk peace accords.
Still, countries have yet to agree on what sanctions would be imposed in such circumstances, according to diplomats and officials who asked not to be identified discussing confidential matters.
The EU usually responds to violations of international rule of law and norms with strong penalties, a diplomat said when asked about the recognition issue. But the bloc is still split on what specific actions short of a full military attack on Ukraine should trigger sanctions on Russia, officials said.
Putin Promises Decision on Donbas Recognition Monday (4:43 p.m.)
Putin said he’d make a final call later Monday after a televised meeting of the Security Council showed member after member arguing in favor of recognizing two self-proclaimed republics in eastern Ukraine’s Donbas region. Only a few suggested giving the West more time to address Russia’s security demands.
When Sergei Naryshkin, the head of Russia’s Foreign Intelligence Service, suggested annexing the territories, Putin corrected him and said that wasn’t on the agenda, a sign they could remain frozen conflicts similar to two largely unrecognized Russian protectorates that split from Georgia after a 2008 war.
“We see the threats and blackmail from our Western colleagues, we understand what such a step entails, but we also understand the situation that has developed,” Putin said at the start of the meeting.
The leaders of the so-called Donetsk People’s Republic and Luhansk People’s Republic earlier appealed to Putin to recognize their independence from Ukraine and conclude a treaty on defense. Recognition could scuttle efforts to implement a peace plan supported by France and Germany as the only way to end the conflict, which has been smoldering since 2014.
Damage in Eastern Ukraine as Tensions Escalate (4:23 p.m.)
A local natural gas treatment plant in the Luhansk region was damaged as cease-fire violations along the line of contact with separatist forces surge. The facility, which is not connected to a major network transiting Russian gas to Europe, was shelled by mortar fire from separatist territory and a village cut off from its gas supply, according to state-run producer UkrGasVydobuvannya JSC.
Baltic Ministers Call for Sanctions Against Russia (3:20 p.m.)
“Yes, indeed I do believe the time has come,” Latvian Foreign Minister Edgars Rinkevics said on Bloomberg TV.
“If we wait for a very specific trigger, Russia will do everything not to provide the trigger” while stoking tensions in eastern Ukraine, Lithuania’s Foreign Minister Gabrielius Landsbergis told journalists in Brussels separately.
Ukraine has been calling for sanctions, but most of Europe has said they would only come in response to an invasion.
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Ukraine Denies Attack on Russian Forces (3:00 p.m.)
Foreign minister Dmytro Kuleba denied Russian allegations that Kyiv sent “saboteurs” and armed personal carriers into Russia’s Rostov region early Monday.
Russia Wants Details on Any Putin-Biden Summit (2:30 p.m.)
“President Putin explained very clearly that we’re not against summits or meetings, but before getting together, especially in such a tense atmosphere, it’s important to understand what these summits would result in,” Foreign Minister Sergei Lavrov told reporters in Moscow.
Earlier, Putin’s spokesman Dmitry Peskov, said there are no “concrete plans” yet for a summit between Putin and Biden. The French and Russian leaders agreed to pursue dialogue at the level of foreign ministers, he said on a conference call with reporters.
Russia Says It Killed 5 ‘Saboteurs’ From Ukraine (2:15 p.m.)
Russian forces killed five “saboteurs” and destroyed two Ukrainian armored personnel carriers that crossed into Russian territory in the Rostov region early Monday, state-run Tass news service reported, citing a statement from the Southern Military District.
The alleged strike comes as tensions have escalated between the Ukrainian army and separatists in the two breakaway republics in the east, with both sides accusing the other of increased shelling in recent days.
Unlike the firing along the contact line between Ukraine and the separatists, Russia alleged this incident took place over the international border.
Ukraine Says Russian-Backed Separatists Shelling Villages (12:48 p.m.)
Vrubivka and Shchastya, in Ukraine’s eastern Luhansk region, are being shelled by Russian-backed separatists, regional government head Serhiy Hayday said on Facebook. Vrubivka has seen electricity and gas supplies cut while Shchastya is without power or water, he said.
Russian-backed separatists, meanwhile, accused Ukrainian forces of what they said were massive attacks with artillery and other weapons.
Both sides have traded accusations of violence amid a surge in violations along the contact line in Ukraine’s Donbas over the past week.
Sanctions on Russian Gas Would Increase Price Volatility: Shell (11:59 a.m.)
If the West implements sanctions on Russian natural gas exports there will “undoubtedly be volatility” in prices, Wael Sawan, Shell’s head of integrated gas, renewables and energy solutions said on a media call.
Shell would look to supply Europe “as and when we can,” but “there is an incredibly tight supply-demand market at the moment, so those cargoes aren’t freely available,” Sawan said.
Ukraine Uncertainty Could Spell More Volatility for the Ruble (11:49 a.m.)
Currency traders are bracing for bigger swings in Russia’s ruble after the Kremlin said there are “no concrete plans” yet for a summit between Vladimir Putin and Joe Biden. Demand to hedge against tail risks over the next month is near the highest since a slump in oil prices hurt the ruble in 2015.
EU Has Sanctions Ready If Russia Attacks Ukraine, Le Maire Says (10:24 a.m.)
French Finance Minister Bruno Le Maire said the EU is ready to hit Russia with sanctions if it attacks Ukraine, despite the potential impact on the European economy.
“We are aware of the consequences for the EU economy,” Le Maire said on Bloomberg Television. “But the political principle is more important: we refuse any kind of attack against Ukraine’s sovereignty.”
EU foreign ministers on Monday approved asset freezes and travel bans targeting five Russian individuals involved in organizing elections in Crimea to the state Duma last year, an official said. The move was adopted as part of the existing framework of sanctions related to the elections in Crimea, which Russia annexed in 2014, and isn’t linked to the current tensions with Ukraine, according to the official, who asked not to be identified because the talks are private. The list of the sanctioned individuals is being updated regularly, the person said.
U.S. Says Biden, Putin Agree to Summit ‘In Principle’ (2:15 a.m.)
The U.S. said it agreed to a summit between Biden and Putin — as long as Russia does not invade Ukraine. It follows a call between Biden and French President Emmanuel Macron, who had spoken earlier on Sunday with Putin.
The substance of any meeting would be set when U.S. Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov meet on Thursday.
“President Biden accepted in principle a meeting with President Putin following that engagement, again, if an invasion hasn’t happened,” White House Press Secretary Jen Psaki said in a statement.
U.S. Warns That Russia May Target Multiple Cities (6:01 p.m.)
The U.S. has told allies that any Russian invasion of Ukraine would potentially see it target multiple cities beyond the capital Kyiv, according to three people familiar with the matter.
Cities that could also come under attack include Kharkiv in the northeast and the seaport cities of Odessa and Kherson in the south, said the people, Western officials who asked not to be identified talking about sensitive matters. They didn’t provide details on the intelligence they said underlined the calculations.
Moscow continues to deny it plans to invade Ukraine. Russian officials last week mocked Western intelligence after similar warnings that an invasion could happen as soon as Feb. 15 or 16.
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