# New talk of compromise on both sides lifts hope for Russia-Ukraine breakthrough
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-03-16
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Russia-Ukraine Compromise Talks Boost Global Markets
Meta Description: New talk of compromise from Moscow and Kyiv on Ukraine's status outside NATO raises hope for peace, with negotiations becoming 'more realistic'.
URL: https://financedigest.com/new-talk-of-compromise-on-both-sides-lifts-hope-for-russia-ukraine-breakthroughhtml

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By James Mackenzie and Natalia Zinets

KYIV/LVIV, Ukraine (Reuters) – New talk of compromise from both Moscow and Kyiv on a status for Ukraine outside of NATO lifted hope on Wednesday for a potential breakthrough after three weeks of war.

Ukraine’s President Volodymyr Zelenskiy said negotiations were becoming “more realistic”, while Russian Foreign Minister Sergei Lavrov said there was “some hope for compromise”.

The Kremlin said the sides were [discussing status for Ukraine similar to that of Austria or Sweden](https://www.financedigest.com/finland-sweden-to-send-teams-to-turkey-to-discuss-nato-bids-haavisto-says.html "Finland, Sweden to send teams to Turkey to discuss NATO bids, Haavisto says"), both members of the European Union that are outside the NATO military alliance. Ukraine’s chief negotiator said it would give Kyiv binding international security guarantees to [prevent future attacks](https://www.financedigest.com/preventing-an-operationally-crippling-ransomware-attack-do-you-know-where-your-risk-exposure-lies.html "PREVENTING AN OPERATIONALLY CRIPPLING RANSOMWARE ATTACK –  DO YOU KNOW WHERE YOUR RISK EXPOSURE LIES?").

Though the war still ground on with Ukrainian civilians trapped in cities under Russian bombardment, the signs of compromise sent relief through global [financial markets](https://www.financedigest.com/the-political-wildcard-what-is-trumps-us-presidential-nomination-doing-to-financial-markets.html "The political wildcard: What is Trump’s US presidential nomination doing to financial markets?"). [Shares in Germany](https://www.financedigest.com/kuehne-raises-lufthansa-stake-to-17-5-as-germany-sells-remaining-shares.html "Kuehne raises Lufthansa stake to 17.5% as Germany sells remaining shares") – Russia’s biggest energy market – were up 3.4%.

Three weeks into the invasion, Russian troops have been halted at the gates of Kyiv, having taken heavy losses and failed to seize any of [Ukraine’s biggest cities in a war Western](https://www.financedigest.com/analysis-russian-gold-removed-from-some-western-funds-after-ukraine.html "Analysis-Russian gold removed from some Western funds after Ukraine") officials say Moscow thought it would win within days.

Ukrainian officials had expressed hope this [week that the war could end](https://www.financedigest.com/european-shares-end-five-day-losing-streak-still-down-for-the-week.html "European shares end five-day losing streak, still down for the week") sooner than expected. [Talks were due to resume](https://www.financedigest.com/japan-insurers-in-talks-with-reinsurers-to-resume-coverage-in-russian-waters.html "Japan insurers in talks with reinsurers to resume coverage in Russian waters") on Wednesday by video link for a third straight day, the first time they have lasted more than a single day.

“The meetings continue, and, I am informed, the positions during the negotiations already sound more realistic. But [time is still needed for the decisions](https://www.financedigest.com/georgias-tbc-bank-slashes-loan-decision-time-with-fico-solution.html "Georgia’s TBC Bank Slashes Loan Decision Time with FICO Solution") to be in the interests of Ukraine,” Zelenskiy said in a video address overnight.

Later on Wednesday, he said Ukrainians must [fight to “defend](https://www.financedigest.com/german-automakers-fight-to-defend-their-turf-from-chinese-rivals.html "German automakers fight to defend their turf from Chinese rivals") our state, our life, our Ukrainian life,” but he also emphasised negotiations for “a just but fair peace for Ukraine, real security guarantees that will work.

UKRAINE SHIFTS

On Tuesday, Zelenskiy said Ukraine could accept international security guarantees that stopped short of its longstanding aim to [join NATO](https://www.financedigest.com/finland-will-join-nato-on-tuesday-stoltenberg.html "Finland will join NATO on Tuesday – Stoltenberg"), seen as a major shift.

Keeping Ukraine out of the Western military alliance was one of Russia’s main [demands in the months before it launched](https://www.financedigest.com/token-inc-launches-london-office-to-answer-demand-from-european-banks.html "Token, Inc. Launches London Office to Answer Demand from European Banks") what it calls a “special operation” to disarm and “denazify” Ukraine.

The negotiations are not easy for obvious reasons,” [Russia’s Lavrov told media outlet](https://www.financedigest.com/exclusive-kazakh-mcdonalds-shut-outlets-temporarily-after-halting-supplies-from-russia-sources.html "Exclusive-Kazakh McDonald’s shut outlets temporarily after halting supplies from Russia – sources") RBC news. But nevertheless, there is some [hope of reaching](https://www.financedigest.com/stocks-reach-one-month-high-on-u-s-debt-ceiling-hopes.html "Stocks reach one-month high on U.S. debt ceiling hopes") a compromise.

“Neutral status is now being seriously discussed along, of course, with security guarantees,” Lavrov said. “There are absolutely specific formulations which in my view are close to agreement.”

Both sides painted only broad outlines in public of a proposed compromise.

Vladimir Medinsky, Russia’s chief negotiator, told state TV: [“Ukraine is offering](https://www.financedigest.com/g7-offers-9-5-billion-new-aid-for-ukraine-ready-with-more.html "G7 offers .5 billion new aid for Ukraine, ready with more") an Austrian or Swedish version of a neutral demilitarised state, but at the same time a state with its own army and navy.

Kremlin spokesman Dmitry Peskov said of that idea: “This is a variant that is currently being discussed and which could really be seen as a compromise.”

Austria and [Sweden both have small militaries equipped to cooperate with NATO](https://www.financedigest.com/nato-deal-with-turkey-greeted-with-caution-and-concern-in-sweden.html "NATO deal with Turkey greeted with caution and concern in Sweden") armies. They are the biggest of six EU members outside NATO which include Russia’s neighbour Finland, whose Cold War-era non-aligned status has been [rejected as a model by Kyiv as offering](https://www.financedigest.com/copper-miner-teck-resources-rejects-glencores-22-5-billion-offer.html "Copper miner Teck Resources rejects Glencore’s .5 billion offer") insufficient protection.

[Ukraine’s chief peace](https://www.financedigest.com/putin-says-peace-talks-with-ukraine-are-at-dead-end-goads-the-west.html "Putin says peace talks with Ukraine are at dead end, goads the West") negotiator, Zelenskiy aide Mykhailo Podolyak, described the model as “A rigid agreement with a number of guarantor states undertaking clear legal obligations to actively prevent attacks.

HOPE

[Ukraine’s staunch resistance on the battlefield and Western sanctions that have isolated Russia from the world economy have raised Kyiv’s hopes](https://www.financedigest.com/gazprom-gas-cut-tempers-economic-hopes-after-ukraine-grain-deal.html "Gazprom gas cut tempers economic hopes after Ukraine grain deal") that Moscow would make concessions.

Though Russia has long been calling for Ukraine to be kept out of NATO, Kyiv and its allies have said Moscow’s true aim was to overthrow the pro-Western, [elected leaders of a country President](https://www.financedigest.com/wickremesinghe-a-wily-political-survivor-elected-sri-lankas-president.html "Wickremesinghe, a wily political survivor, elected Sri Lanka’s president") Vladimir Putin dismisses as an artificial state.

Podlolyak tweeted before Wednesday’s [talks that Ukrainian military counteroffensives had “radically changed](https://www.financedigest.com/talk-to-me-the-changing-face-of-customer-communications.html "TALK TO ME :THE CHANGING FACE OF CUSTOMER COMMUNICATIONS") the parties’ dispositions.

[Britain said Russian forces](https://www.financedigest.com/britain-says-it-is-committed-to-leading-a-nato-task-force-in-2024.html "Britain says it is committed to leading a NATO task force in 2024") were trapped on roads, struggling to cope with Ukrainian terrain and suffering from a failure to gain control of the air.

The tactics of the Ukrainian Armed Forces have adeptly exploited Russia’s lack of manoeuvre, frustrating the Russian advance and inflicting [heavy losses](https://www.financedigest.com/uk-motor-and-home-insurers-headed-for-heavy-losses-ey-warns.html "UK motor and home insurers headed for heavy losses, EY warns") on the invading forces,” it said.

THREE MILLION REFUGEES

Europe’s biggest invasion since [World War Two has destroyed some Ukrainian cities](https://www.financedigest.com/uks-most-liveable-city-manchester-sets-its-sights-on-the-world-from-tourists-to-property-investors.html "UK’s most liveable city, Manchester sets its sights on the world, from tourists to property investors") and sent more than 3 million refugees fleeing abroad.

The streets of the capital Kyiv were largely empty on Wednesday after authorities imposed a curfew overnight. Several buildings in a residential area were badly damaged after what appeared to be a [Russian missile](https://www.financedigest.com/russian-missiles-hit-30-of-ukraines-energy-infrastructure-in-two-days-minister.html "Russian missiles hit 30% of Ukraine’s energy infrastructure in two days – minister") was shot down in the early hours of Wednesday, residents and emergency workers said.

There was no immediate word on casualties as a [rescue team searched for signs of life amid the rubble](https://www.financedigest.com/turkey-clears-away-rubble-from-earthquake-rescue-efforts-wind-down.html "Turkey clears away rubble from earthquake, rescue efforts wind down"). Surrounding streets were covered with broken glass from hundreds of windows and what appeared to be a motor from the missile lay twisted on the roadside.

Still, Ukrainian forces have withstood an assault by a much larger army. Zelenskiy said [Ukrainian troops had killed a fourth Russian](https://www.financedigest.com/ukrainian-volunteers-recount-three-weeks-in-russian-captivity-allege-beatings.html "Ukrainian volunteers recount three weeks in Russian captivity, allege beatings") major general in the latest fighting. Reuters was not immediately able to verify this.

“The occupiers were not successful today, although they threw thousands of their people into battle, in the north, in the east, in the south of our state. The enemy lost equipment, hundreds more soldiers. A lot of dead Russian conscripts, dozens of officers.”

[Ukraine said about 20,000 people had escaped the besieged port of Mariupol](https://www.financedigest.com/ukraine-says-first-civilians-killed-in-lviv-fighters-cling-on-in-mariupol.html "Ukraine says first civilians killed in Lviv, fighters cling on in Mariupol") in cars, but hundreds of thousands remain trapped under bombardment without heat, power or water.

Deputy [Prime Minister Iryna Vereshchuk said it was not clear whether the corridor to the city](https://www.financedigest.com/ebbsfleet-garden-city-kent-primed-new-homes.html "Ebbsfleet Garden City In Kent Primed For New Homes") would open on Wednesday. She said 400 [staff and patients hostage were being held hostage at a hospital](https://www.financedigest.com/the-icu-is-full-medical-staff-on-frontline-of-chinas-covid-fight-say-hospitals-are-overwhelmed.html "‘The ICU is full’: medical staff on frontline of China’s COVID fight say hospitals are ‘overwhelmed’") Russian forces had captured in Mariupol on Tuesday.

[Russia was due to pay $117 million in interest on dollar-denominated sovereign bonds](https://www.financedigest.com/pimco-cut-big-position-in-russia-cds-by-adding-bonds-in-q2.html "PIMCO cut big position in Russia CDS by adding bonds in Q2"), but could be forced to pay in roubles instead, amounting to its first default on foreign debt since the Bolshevik revolution. Moscow said it has the money, and Washington would be to blame if it cannot pay.

(Reporting by Reuters bureaus; Writing by Peter Graff, Michael Perry; Editing by Lincoln Feast, Raju Gopalakrishnan, Alex Richardson and Philippa Fletcher)


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