Russia-Ukraine peace talks launched, with some progress.
2025-02-14
■ US President Trump held talks with the presidents of Russia and Ukraine respectively and reached an agreement on a peace negotiation plan.
■ Russia also believes that achieving peace as soon as possible has many benefits, however, it still needs to pay attention to factors such as the timing of the launch of negotiations.
US President Trump held a telephone conversation with Russian President Putin on the 12th and announced that Russia and Ukraine have agreed to launch peace negotiations. The Russian presidential office also confirmed the content of the talks and said that it has invited Trump to visit Moscow. In addition, Trump also reached an agreement with Ukrainian President Zelensky in another telephone conversation to hold talks with Putin. Based on the existing information, this article will sort out the potential advantages of Russia choosing to reach a peace agreement as soon as possible under the current situation.
There are mainly two key factors: (1) Russia's economic situation; and (2) The change of the US government. (1) Russia's economic situation: The latest Russian economic growth forecast released by the International Monetary Fund (IMF) and the World Bank in January this year shows that although the economic performance in 2024 is relatively strong, it will slow down significantly in 2025. The IMF's forecast has dropped from 3.8% to 1.4%, while the World Bank's forecast has dropped from 3.4% to 1.1%. Economic growth in 2026 is also expected to remain in the 1% range. Currently, Russia is in a wartime economic mode. The proportion of defense spending in the 2025 budget has increased to 32.5%. The government's fiscal spending has increased significantly, leading to increased inflation. The Russian Central Bank has raised its policy interest rate to 21%, which puts heavy pressure on the economy. At the same time, Western countries' economic sanctions against Russia are still ongoing, causing further impact on its economy. In addition, about 30% of Russia's fiscal revenue depends on the price of Urals crude oil. Russia's fiscal revenue may shrink significantly, further exacerbating the fiscal deficit and increasing the risk of an economic downturn if the US government increases its efforts to exploit fossil fuels and causes international oil prices to fall. (2) Change of US government: The results of the US election last fall replaced the Biden administration, which had previously been in opposition to Russia, with the Trump administration. Looking back at Trump's first administration, the dialogue between the United States and Russia was relatively positive, so Putin may think that the Trump administration is more willing to accept Russia's demands. The Trump administration has stated that it believes that "restoring the borders before the annexation of Crimea in 2014" and "Ukraine joining NATO" are both unrealistic. These two issues may become major points of contention in future peace talks. In addition, since the US Constitution stipulates that Trump cannot run again after 2028, Putin may hope to resolve the Russia-Ukraine issue during the second Trump administration.
If future peace talks make progress and begin to discuss Ukraine's post-war reconstruction, European financial markets will also pay more attention. At present, we should pay close attention to the time and place of the launch of the negotiations and the scope of specific participants.
■ Russia also believes that achieving peace as soon as possible has many benefits, however, it still needs to pay attention to factors such as the timing of the launch of negotiations.
US President Trump held a telephone conversation with Russian President Putin on the 12th and announced that Russia and Ukraine have agreed to launch peace negotiations. The Russian presidential office also confirmed the content of the talks and said that it has invited Trump to visit Moscow. In addition, Trump also reached an agreement with Ukrainian President Zelensky in another telephone conversation to hold talks with Putin. Based on the existing information, this article will sort out the potential advantages of Russia choosing to reach a peace agreement as soon as possible under the current situation.
There are mainly two key factors: (1) Russia's economic situation; and (2) The change of the US government. (1) Russia's economic situation: The latest Russian economic growth forecast released by the International Monetary Fund (IMF) and the World Bank in January this year shows that although the economic performance in 2024 is relatively strong, it will slow down significantly in 2025. The IMF's forecast has dropped from 3.8% to 1.4%, while the World Bank's forecast has dropped from 3.4% to 1.1%. Economic growth in 2026 is also expected to remain in the 1% range. Currently, Russia is in a wartime economic mode. The proportion of defense spending in the 2025 budget has increased to 32.5%. The government's fiscal spending has increased significantly, leading to increased inflation. The Russian Central Bank has raised its policy interest rate to 21%, which puts heavy pressure on the economy. At the same time, Western countries' economic sanctions against Russia are still ongoing, causing further impact on its economy. In addition, about 30% of Russia's fiscal revenue depends on the price of Urals crude oil. Russia's fiscal revenue may shrink significantly, further exacerbating the fiscal deficit and increasing the risk of an economic downturn if the US government increases its efforts to exploit fossil fuels and causes international oil prices to fall. (2) Change of US government: The results of the US election last fall replaced the Biden administration, which had previously been in opposition to Russia, with the Trump administration. Looking back at Trump's first administration, the dialogue between the United States and Russia was relatively positive, so Putin may think that the Trump administration is more willing to accept Russia's demands. The Trump administration has stated that it believes that "restoring the borders before the annexation of Crimea in 2014" and "Ukraine joining NATO" are both unrealistic. These two issues may become major points of contention in future peace talks. In addition, since the US Constitution stipulates that Trump cannot run again after 2028, Putin may hope to resolve the Russia-Ukraine issue during the second Trump administration.
If future peace talks make progress and begin to discuss Ukraine's post-war reconstruction, European financial markets will also pay more attention. At present, we should pay close attention to the time and place of the launch of the negotiations and the scope of specific participants.