Ukraine Army Sees Worst Day Since Truce as Battles Flare

Ukraine’s army suffered its highest casualties since signing a Sept. 5 truce in new clashes with pro-Russian fighters that are threatening to shatter a cease-fire that brought calm to the six-month old conflict.

Nine Ukrainian servicemen were killed in attacks during the last 24 hours, including an assault by a separatist tank on a government armored personnel carrier near the airport of Donetsk, the combat zone’s largest city, military spokesman Andriy Lysenko said yesterday. Twenty-seven soldiers were wounded as they repelled two waves of separatists, killing 50, he said. While the rebels don’t usually reveal casualties, they said one “representative” of Donetsk died and seven people were wounded, according to the Rusvesna website.

The violence challenges comments last week by President Petro Poroshenko that the worst of the war is over as Ukraine focuses on elections next month, securing gas supplies and preparing a bid for European Union membership. Russia, which denies involvement in the conflict, said it wants to normalize ties with the EU and the U.S. after being hit by sanctions.

“The cease-fire we observe now is rather unstable,” Iaroslav Kovalchuk, head of the Internal Policy Department of the International Centre for Police Studies in Kiev, said by phone. Even so, “the President needs the truce to conduct early parliamentary elections” on Oct. 26 and Russia also needs it to “calm down the West and avoid further sanctions.”

Ruble Plunges

The violence was the worst flare-up since a truce agreement was signed Sept. 5. The two sides have since agreed to establish a 30 kilometer (19 mile) buffer zone between government forces and the rebels and exchange prisoners.

The conflict has killed more than 3,500 people and driven at least 615,000 from their homes, the United Nations estimates. Yesterday’s casualties rattled Russian markets.

The ruble fell 0.5 percent to a record low against the central bank’s target basket of dollars and euros of 41.4076, near the 44.4 bank’s threshold that forces it to buy rubles. Russia also showed last week it’s ready to borrow at more than 9 percent for the first time in almost five years.

‘Reset 2.0’

While EU countries delayed the creation of a free-trade area with Ukraine until 2016 at Russia’s urging, they have held fast on refusing to ease sanctions. The government in Moscow asked the central bank yesterday to consider providing foreign currency swaps to banks, the government said on its website. Sanctioned companies including state-run oil producer OAO Rosneft and gas producer OAO Novatek have asked for aid.

Russia’s economy is “not in very good shape,” Foreign Minister Sergei Lavrov said in an interview with Bloomberg Sept. 28. He softened his tack in comments about the U.S., telling Russian Channel Five television it was time for ties to undergo a “reset 2.0”, a reference to a bid U.S. President Barack Obama’s administration in 2009 to improve relations.

“We are absolutely interested in normalizing ties, but it wasn’t us who destroyed them,” Lavrov told Channel Five, according to a transcript on his ministry’s website.

Still, Lavrov said Russia won’t change its stance over Ukraine to win a repeal of sanctions. Ukraine accuses Russia of fomenting the unrest near the two nations’ border to prevent it from joining the NATO and the EU following the ouster of President Viktor Yanukovych, an ally of Vladimir Putin.

No Change

German Chancellor Angela Merkel said the slight easing of the conflict in recent weeks wasn’t a reason to ease sanctions.

“I don’t see any change at the moment regarding Russia’s position,” she told reporters in Berlin. “Sometimes in history one has to be prepared for the long haul, and not ask after four months if it still makes sense to keep up our demands.”

The up-tick in violence may indicate the cease-fire is unraveling as Russia and the separatists see its usefulness waning, said Joerg Forbrig, senior program officer for central and eastern Europe at the Berlin Bureau of the German Marshall Fund of the U.S.

The militants may be thinking, “It didn’t help in reducing Western pressure, so we might as well go on with what we were doing before,” Forbrig said by phone.

The situation in Donetsk “remains extremely tense,” with powerful artillery strikes heard across the city, Donetsk’s administration said on its website yesterday.

“Despite the cease-fire regime, terrorists and Russian mercenaries keep shelling Ukrainian positions,” Lysenko told reporters in Kiev.

(Source: Bloomberg)