Summing up the Summit

Editorial

As we assumed last week, Russia will stick to it's own positions. And it was once again confirmed by Lavrov before the summit.

Trump was given a chance to distance himself from the conflict and turn to more practical things that would benefit everyone (except obvious losers in the EU). Trump agreed with Putin that there is a need for strong and stable peace in Ukraine, not a ceasefire, which contradicts European position of prolonging the conflict at any cost (but better at the US expense, of course).

In general, the main loser here is the EU, as their plans to solve their systemic crises (let's be honest here, there is a systemic crisis in the West, but mostly is has hit the EU, as even those countries, that were able to keep their industrial production, are extremely dependent on foreign resources). The stock market is a nice toy, but only if you have a strong real economy. The EU, as we constantly state, since 2022, doesn't have it. And if before blowing up of Nord Stream pipeline, there were some chances for the EU to somehow recover, we don't see any possibilities for them to do that under current circumstances. The era of cheap hydrocarbons that started with Brezhnev is over, and gas, if sold, will be sold at market price and, most likely, on quite unfavorable conditions for them. In fact, no one is interested in the EU as an industrial economy, neither the US, nor China. The EU is forced to rebalance itself and is at the brink of bankruptcy, so it can still purchase some goods, but it will be deprived (we'd say, they have already been deprived) the possibility to influence something on the global scale. Holding on to countries like Moldova, Armenia, etc is a dead end and will bring the EU nothing but even more trouble.

Here, the split that already exists between national European elites and EU bureaucracy will deepen. We may assume that, at some point, the EU will be deconstructed, and countries will live in some kind of union, but far less regulated and unified. That will benefit individual states, but only those who are smart. In general, we think that Europeans should be morally prepared for lower incomes and a lower level of life in general. Living at one's own expense is painful.

Speaking of Ukraine, it was stated by Russian officials, several times by Putin himself, that the Istanbul 2022 agreement might be a point to work out the solution. Here, we would like to draw your attention to the Article 1, point 3:

3. Pursuant to paragraph 1 of this Article, Ukraine, as a permanently neutral state, undertakes:

a) not to engage in activities that would be contrary to the international legal status of permanent neutrality;

b) to terminate international treaties and agreements incompatible with permanent neutrality;

Let us not forget that Ukraine has such an interesting wording in the Constitution:

caring for the strengthening of civil harmony on Ukrainian soil and confirming the European identity of the Ukrainian people and the irreversibility of the European and Euro-Atlantic course of Ukraine,

{Paragraph 5 of the Preamble as amended by Law No. 2680-VIII of 07 February 2019

So, minding realities on the ground and going back to root causes of the conflict, we assume, that the Ukrainian Constitution will, most likely, be revised. We cannot state that, but we may assume. Moreover, going back to Minsk-2, (unfortunately, the document is available in Russian only, see point 11 and footnote), to summarize, it speaks of decentralization of Ukraine. Decentralization was never mentioned in Istanbul 2022, but Article 17 states:

3. From the date of delivery to the depositary of documents on the ratification of this Treaty by Ukraine (after approval of the status of Ukraine as a permanently neutral state during an all -Ukrainian referendum and the introduction of appropriate amendments to the Constitution of Ukraine) and the majority of the Guarantor States (including Russia), this Treaty comes into force for Ukraine and such Guarantor States.

So we may assume that points on decentralization might be included in the referendum too. This is only an a suggestion, of course, as here we enter into the field of speculations, that we don't like to do. But following simple logic, that long term settlement of the conflict happens on the basis of Istanbul, there is a need to amend the Constitution of Ukraine anyway.

So, this is just a personal view. If we were able to guess correctly or not - we'll see quite soon.