Ukraine 101:

• No significant developments.

West’s leverage over Russia:

• German Chancellor Angela Merkel said the lifting of sanctions on Russia would economically benefit both Russia and Germany but insisted that Moscow must agree to bring an end to the conflict in Ukraine before these sanctions can be lifted and the advantages felt. (CNBC, 08.29.17)

Russia’s leverage over West:

• No significant developments.

Russia’s leverage over Ukraine:

• No significant developments.

Casualties and costs for Russia, West and Ukraine:

• A representative of the self-proclaimed Donetsk People’s Republic said that more than 30 people have been killed and more than 40 injured by Ukrainian forces as a result of violations of the “harvest ceasefire,” which is supposed to be in force from June 24 to Aug. 31. (TASS, 08.25.17)
• Two parliament members of the self-proclaimed Luhansk People's Republic in eastern Ukraine have been killed, the pro-rebel Luhansk Information Center website reported, quoting the LPR prosecutor-general. (BBC Monitoring, 08.28.17)
• Nine militants were killed and 17 were wounded in eastern Ukraine Aug. 21-27, according to the Ukrainian Defense Ministry. (Ukrainian News Agency, 08.28.17)
• The Security Service of Ukraine reports that about 23 officers were killed during "anti-terrorist operations." (Interfax, 08.29.17)
• Newly imposed U.S. sanctions on Russia have caused problems for the Italian bank Intesa Sanpaolo’s plans to finance the purchase of a stake in the Kremlin-controlled oil giant Rosneft by Glencore, a commodity-trading company, and Qatar’s wealth fund. (Reuters, 08.25.17)
• President Vladimir Putin’s ban on European Union cheese imports has driven up milk prices so high in Russia that French yogurt maker Danone is transporting almost 5,000 cows to a farm in Siberia to ensure that it has an affordable supply. (Bloomberg, 08.27.17)
• Russian Deputy Foreign Minister Sergei Ryabkov said that about 400 Russian entities and some 200 Russian citizens have been targeted by U.S. sanctions. He also reaffirmed Moscow's denial that it interfered in the U.S. election, dismissing the accusations as “collective madness.” (AP, 08.23.17)
• Maxim Oreshkin, Russia’s up-and-coming economy minister, says his country is no longer suffering from U.S. and EU sanctions, and he sees better prospects for future trade in Asia. The former economist at Societe Generale SA’s Russian unit and VTB Capital has emerged as a Putin favorite, according to three officials familiar with the president’s thinking. (AP, 08.29.17, Bloomberg, 08.25.17)
• The cost of insuring Russian debt against default for five years using credit-default swaps dropped to 146.5 basis points on Aug. 24, a level not seen since before Russia’s annexation of Crimea in 2014. That’s cheaper than most periphery countries in the euro area, including Italy and Portugal. (Bloomberg, 08.24.17)

Impact of Russia’s actions vis-à-vis Ukraine on other countries:

• Lithuania has taken delivery of its first shipment of liquefied natural gas (LNG) from the United States, a move the Baltic state hopes will further reduce its reliance on Russia. Poland last month became the first Eastern European country to receive U.S. LNG. Shipments of U.S. LNG cost $6.29 per million British thermal units, according to S&P Global Platts data. Over the same period, Russian gas delivered into Germany cost an average of $4.86 per million British thermal units. (AP, 08.21.1, Wall Street Journal, 08.19.17)

Red lines and tripwires:

• No significant developments.

Factors and scenarios that could cause resumption of large-scale hostilities or lead to accidents between Western and Russian forces in Europe:

• The head of Ukraine’s national Security Council said last week it has “not excluded” the possibility that Russia could use its Zapad-2017 military exercise to create strike forces for the “military invasion” of Ukraine. Latvia, Estonia and Lithuania have voiced similar fears. Russia is preventing proper international observation of large military exercises near the Polish border next month, NATO Secretary-General Jens Stoltenberg said Aug. 25, echoing European governments' growing apprehension over troops massing on the tense geopolitical fault line. Russia’s Deputy Defense Minister, Lt. Gen. Alexander Fomin, sought on Aug. 29 to allay Western fears about Zapad-2017, describing them as regular drills that will not threaten anyone. (Financial Times, 08.27.17, AP, 08.29.17, Wall Street Journal, 08.26.17)

Arming and training of Ukrainian forces by Western countries:

• On the 26th anniversary of Ukraine's independence from Moscow, U.S. Defense Secretary Jim Mattis suggested that he favors providing Ukraine with defensive lethal weapons. “On the defensive lethal weapons, we are actively reviewing it,” he said in Kiev. “I will go back now having seen the current situation and be able to inform the secretary of state and the president in very specific terms what I recommend for the direction ahead.” Mattis also said the Trump administration will not accept Moscow’s annexation of Ukraine's Crimea region. The United States has already provided $750 million in nonlethal weapons and support to Kiev, according to Mattis. Kurt Volker, the U.S. special envoy for Ukraine, told Ukrainian television that Mattis had not come “empty-handed” and that he had brought some unspecified military equipment for Ukraine’s armed forces. Ukrainian President Petro Poroshenko sidestepped the question of how soon he expects a White House decision on arms. (AP, 08.24.17, RFE/RL, 08.24.17, New York Times, 08.24.17, UNIAN, 08.29.17, Russia Matters, 08.27.17)

Strategies and actions recommended:

• Katrina vanden Heuvel, the editor and publisher of The Nation, writes that the U.S. and Russia need to pursue détente: “An agreement guaranteeing Georgia['s] and Ukraine’s independence, committing them to remain nonaligned, outside of NATO and free to join both the EU and the Russian economic bloc, would greatly reduce tensions.” (National Interest, September-October 2017)

Analysis:

• Michael Kofman, a senior research scientist at CNA Corporation, writes about the hype around the Zapad-2017 military exercise: “There is nothing to indicate that this ... exercise is cover for a diabolical Russian invasion… There is also nothing to suggest that Russia intends to 'leave' its forces in Belarus, or anywhere else for that matter. Typically, unit formations need housing, a plan to garrison in quarters, supporting facilities and the like, especially through fall and winter. The notion that Russia would just leave them shivering in tents somewhere in Belarus is unrealistic." (War on the Rocks, 08.23.17)
• Michael Kofman also expresses a critical view on providing lethal arms to Ukraine: “The Trump administration’s plan to arm Kiev is a serious political decision that could have far-reaching strategic consequences. The United States is walking into a proxy war with Moscow — one that it is unprepared to win." (New York Times, 08.25.17)
• Brian Milakovsky, a humanitarian worker in eastern Ukraine, writes: “I fear that Putin’s understanding of the language of force will be entirely different. Regardless of the actual impact of Javelin rockets, he could regard U.S. arms transfers as a symbolic test of who dictates conditions in the Donbass warzone. He could counter with a new wave of military hardware to demonstrate his resolve. The result could be a miniature arms race with lots of artillery being fired symbolically into the homes of living, breathing Donbass civilians.” (National Interest, 08.28.17)
• Dmitri Trenin, the director of the Carnegie Moscow Center, writes: “Russia will not invade NATO territory unprovoked, but incidents along the new front line, stretching from the Arctic to the Baltic to the Black Sea and elsewhere, may occasionally endanger peace between Russia and the United States and its allies.” (Carnegie Moscow Center, 08.24.17)
• Bryan R. Early and Keith Preble, a professor and graduate student from the State University of New York at Albany, write that "U.S. policymakers cannot hope to obtain robust cooperation from the E.U. in sanctioning Iran and Russia at any point in the near future." (Washington Post, 08.24.17)

Other important news:

• Ukrainian President Petro Poroshenko has proposed a cease-fire in eastern Ukraine starting at the beginning of the school year on Aug. 23 and received unanimous support from Russia, Germany, France and the United States. The proposal was made late on Aug. 22 in a phone call with Russian President Vladimir Putin, German Chancellor Angela Merkel and French President Emmanuel Macron, who all voiced their strong support for a lasting cease-fire to allow children in eastern Ukraine to attend school. The Ukrainian military and Russia-backed separatists have already accused each other of violating the cease-fire. German Chancellor Angela Merkel and French President Emmanuel Macron on Aug. 28 called for Russia and Ukraine to increase their efforts to implement a fragile ceasefire agreement in eastern Ukraine. (RFE/RL , 08.23.17, RFE/RL , 08.25.17, Reuters, 08.28.17)
• President Donald Trump declined on Aug. 28 to describe Russia as a security threat, saying during a visit to Finland that he would put “many countries” in that category instead. “I consider many countries as a security threat, unfortunately, when you look at what’s going on in the world today,” Trump said after a Finnish broadcaster asked specifically about Russia and whether the president would consider it a threat to security. “I say it loud and clear: I've been saying it for years. I think it's a good thing if we have great relationships, or at least good relationships, with Russia,” he said. He also said the U.S. is “very protective” of the Baltics in the face of a Russian naval exercise with China in the Baltic Sea, and he said the U.S. and its allies would be able to handle any threat. At the same time, Trump sidestepped a question on what type of assistance the United States would provide to Finland in the event of diplomatic breakdown between the Nordic country and Russia. (AP, 08.28.17, RFE/RL, 08.29.17, Reuters, 08.28.17, The Hill, 08.28.17)
• Kurt Volker, the U.S. special envoy for efforts to end the conflict in Ukraine, says that the country is not ready yet to join NATO. U.S.-Russian relations will be “crippled” unless a solution is found to the Ukraine crisis, he said. (RFE/RL, 08.27.17, Financial Times, 08.27.17)
• "There are 60 wars underway in the world, but not a single one on Europe’s territory, if we don’t count Ukraine. But Ukraine is not a European country in terms of the EU membership," European Commission President Jean-Claude Juncker said. (TASS, 08.29.17)
• The Security Service of Ukraine today said that it barred Spanish freelance journalists Antonio Pampliega and Ángel Sastre from entering the country for three years over their reporting on the conflict in the east, according to news reports. (CPJ, 08.29.17)
• The Russian Prosecutor-General’s Office has handed over additional data on Malaysia Airlines flight MH17 to authorities in the Netherlands, who are conducting an investigation into the 2014 crash of the airplane in eastern Ukraine. (TASS, 08.25.17)
• Ukraine’s Ministry of Economic Development and Trade expects GDP growth to amount to around 2% this year and 3% in 2018, according to First Deputy Prime Minister Stepan Kubiv. (TASS, 08.26.17)
• Real wages in Ukraine in July 2017 grew by 17.2% from July 2016 but decreased by 0.5% from June 2017, the State Statistics Service of Ukraine reported on August 29. (Kyiv Post, 08.29.17)