Today we issue our September Macro Monthly for Russia. The breaking news from Kiev (Wednesday morning) is that Russia and Ukraine have agreed to a permanent cease-fire in eastern Ukraine. That was later amended by President Poroshenko's office to state both sides had agreed to a cease-fire process. We have reflected that news in this report but clearly there is a great deal more clarification to come in the days ahead – especially at the NATO summit in Wales (Thursday and Friday). If required we will issue a supplementary note in a few days.
- The escalation of fighting in eastern Ukraine immediately after the Minsk summit had raised the sanctions threat against Russia. The threats were expected to become even more pronounced in the days leading up to the NATO summit on 4-5 September.
- The breaking news from Kiev (Wednesday morning) is that Russia and Ukraine have agreed to a permanent cease-fire in eastern Ukraine, later amended by President Poroshenko's office to state both sides had agreed to a cease-fire process. Despite Moscow sticking with its long held position that it is not party to the conflict and therefore is not formally part of the peace deal, the news will greatly add to the optimism that the worst of the crisis has now passed. If the agreement is seen to be put into effect then optimism that the existing sanctions against Russia, and the retaliatory actions taken by Moscow, may be removed at the first review date on November 1st.