Caution urged as Ukraine peace agreement deemed fragile

The International Monetary Fund announced a $17.5 billion (€15.3 billion) financial package for Ukraine yesterday, as Ukrainian president Petro Poroshenko warned implementation of the peace accord with Russia could prove difficult.

Speaking following a meeting with EU leaders in Brussels, Mr Poroshenko said the talks had been difficult, but the ceasefire agreement gave “reason for careful optimism”.

EU leaders gathered for a one-day summit yesterday that was dominated by Ukraine, just hours after the leaders of France and Germany forged a peace agreement with Russian president Vladimir Putin and the Ukrainian president after 16 hours of marathon talks.

While the agreement was broadly welcomed by leaders, caution was urged.

“This is a glimmer of hope – no more, no less,” German chancellor Angela Merkel said on arriving in Brussels from the talks in Minsk. “It is very important that words are followed by actions.”

European Council president Donald Tusk also struck a cautious tone, pointing out the first Minsk agreement had not been respected. “Today’s agreement in Minsk is welcome news and gives hope. Hope is good, even essential, but not enough. The real test is the respect of the ceasefire on the ground,” he said, adding unity with the US on Ukraine was vital.

His views were echoed by Lithuania’s president Dalia Grybauskaite, who pointed out there had been no provision on border control. “It is a partial solution only. We had such an agreement, an even larger and more coherent agreement five months ago, and it was not implemented. Now we have a smaller, partial agreement.”

Make or break

Welcoming the ceasefire, Finnish prime minister Alex Stubb warned Ukraine was facing a “make-or-break situation” regarding negotiations. “If this does not stick, if this does not last, I think we will see a frozen situation between Russia and the West for the foreseeable future.”

Amid concern about the Ukrainian economy as the country struggles under the weight of almost a year of conflict, the IMF also announced a fresh package to replace last year’s bailout, bringing the total value to $40 billion (€35 billion) over four years.

“It is an ambitious programme, it is a tough programme and it is not without risk,” IMF managing director Christine Lagarde told reporters in Brussels.

Meanwhile, EU leaders pledged to strengthen counter-terrorism following recent activity in Europe. France secured a commitment from EU leaders to consider a “targeted amendment to the Schengen Borders Code where necessary” to provide for permanent border checks.