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Russia Says U.S. Talks at Dead End, But Still Hopes for More

·5 min read

(Bloomberg) -- Talks this week on Moscow’s demands for security guarantees from the U.S. and its allies are at “a dead end,” a senior Russian diplomat said, stepping up the pressure on the West even as he and other officials held out the prospect of more diplomacy to ease tensions.

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“The U.S. and its allies in effect are telling us ‘no’” on Russia’s key proposals, offering further discussions only on “secondary” matters, Deputy Foreign Minister Sergei Ryabkov told RTVi television. “That’s the dead end or difference in approaches.”

The ruble extended losses, trading down 2% at 76.1950 per dollar as of 6:38 p.m. in Moscow, the worst performance on the day in emerging markets. Bond yields rose, with the rate on 10-year ruble debt adding 31 basis points to 9.08%, the steepest daily increase on a closing basis in almost two years.

The comments by Ryabkov, who led the talks with the U.S. in Geneva on Monday, seemed to reflect a slight hardening of Russia’s position as he said he didn’t see reason to resume discussions in the near future. But shortly after he spoke, his boss, Foreign Minister Sergei Lavrov, seemed more upbeat, telling state television he expects the U.S. and its allies to respond to Russia’s proposals as soon as next week.

How Putin Wins by Doing Nothing: Balance of Power

The mixed messages suggested the Kremlin is keeping up the pressure on the U.S. and its North Atlantic Treaty Organization allies that started with a buildup of tens of thousands of troops on the border near Ukraine. Moscow has so far rejected western calls to pull those forces back, saying it has no plans to invade.

Sanctions Threats

The U.S. and Europe have threatened to impose painful new sanctions on Russia if it does invade. In an effort to get the Kremlin to back down, the U.S. agreed to this week’s talks on Russia’s demands for security guarantees.

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Though the meetings yielded no progress on Russia’s most sweeping demands -- a promise by NATO not to expand further toward its borders, not to deploy offensive weapons there and to remove forces from eastern Europe -- they did bring western offers to negotiate on lesser issues that Moscow had long sought to discuss, such as limits on missiles in Europe.

“No one was even thinking about talking about this before,” said Fyodor Lukyanov, head of the Council on Foreign and Defense Policy, which advises the Kremlin. “The West’s fixation with Ukraine stimulates Russia to action: ‘Since you react so strongly, then we’ll be poking you there.”’

Why Russia-Ukraine Tensions Are So Hard to Defuse: QuickTake

Ryabkov Thursday kept up weeks of vague threats of potential military measures Russia might take in the event the talks fail, even hinting it could send warships or other military assets to Venezuela or Cuba.

The campaign of threats has alarmed some European capitals, fueling calls for more diplomacy.

‘Time for Talks’

“Now is the time to use all available formats for talks,” German Defense Minister Christine Lambrecht said Thursday in an interview with Inforadio. “It’s a painstaking and very strenuous journey but it’s the right way if we want a peaceful solution.”

In Vienna, diplomats at the Organization for Security and Cooperation in Europe continued the discussions of Russia’s security demands Thursday.

“We’ll see if Russia is prepared to engage on that,” U.S. Secretary of State Antony Blinken said Thursday on MSNBC of U.S. offers of more talks. “If it is, if it does, then I think we can resolve this peacefully without conflict, and that’s clearly preferable for everyone.”

Though Russia hasn’t committed to continuing the talks with NATO, saying it’s waiting for written responses to its proposals, Lavrov will host his German counterpart in Moscow for talks Tuesday, the Foreign Ministry announced.

“Now the question is, is the Kremlin ready to negotiate or was the goal just to scream about its fears,” said Victoria Y. Zhuravleva, a foreign-policy expert at state-run think tank IMEMO in Moscow. “I don’t think the Kremlin really expected NATO to give it the written guarantees that it wouldn’t expand.”

Buildup Continues

On the ground, the Russian military buildup is continuing, according to western officials, with as many as 100,000 troops already near the border.

Reinforcements totaling more than 10,000 combat-capable troops are on their way from the country’s Far East, according to Konrad Muzyka, head of the Rochan Consulting defense research group based in Gdansk, Poland.

Trucks, tanks, infantry fighting vehicles and multiple rocket launchers have been recorded in the past week on social media videos moving west from easternmost parts of Russia on trains, according to the Moscow-based Conflict Intelligence Team. Eyewitnesses report up to several trains a day, said CIT, which tracks Russian troop deployments.

The potential battle-ready force on Ukraine’s borders is almost four times the usual strength and cannot be maintained for more than a few months according to Muzyka. “We will definitely see a continuous deployment of Russian troops near the border but we still don’t know what the end will be,” he said.

(Updates with market activity in third paragraph)

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