Dear readers: Please be advised that this will be Russia Matters’ last Ukraine Conflict Monitor. Top news related to the conflict will be included in the weekly Russia in Review digest, while pertinent analysis will be featured in the Russia Analytical Report. Please subscribe to these mailings if you haven’t already.

Ukraine 101:

• Ukraine's gross foreign debt has grown by 2 percent in the third quarter of 2017. (Interfax, 12.19.17)

West’s leverage over Russia:

• EU leaders on Dec. 14 agreed to extend tough economic sanctions against Russia over its meddling in Ukraine for six months, EU President Donald Tusk said. The decision to roll sanctions over came after French President Emmanuel Macron and German Chancellor Angela Merkel briefed the other EU leaders on the state of the Minsk peace accord, and Merkel told reporters afterwards that the leaders had had an “intense discussion” on sanctions. (AFP, 12.14.17)

 Russia’s leverage over West:

• A growing number of Russians view the United States and Europe negatively while expressing less concern about Western sanctions, a new poll shows. (The Moscow Times, 12.18.17)
• A top Chinese official visited Kiev this month to announce a host of new infrastructure projects and investments in Ukraine, underscoring a burgeoning economic relationship between the two countries that could nudge Kiev away from the West—a scenario that would ultimately benefit Moscow, some say. (Newsweek, 12.19.17)

Russia’s leverage over Ukraine:

• Russia’s natural gas exporter is channeling more money into the fight for market share as the U.S. threatens its biggest European pipeline project, Nord Stream 2, with possible sanctions and delivers tankers of fuel to the region. Ukraine has lobbied against the $11.2 billion project, which would bypass its territory. (Bloomberg, 12.19.17)

Casualties and costs for Russia, West and Ukraine:

• Four Ukrainian soldiers were killed and nine were wounded in action in eastern Ukraine in the week of Dec. 12-19, the press center of Ukraine’s Anti-Terrorist Operation headquarters has reported. (UNIAN, 12.18.17, 12.17.17, 12.15.17, 12.14.17)
• Fighting in eastern Ukraine has escalated to the worst level since February, OSCE officials said after the shelling of a frontline village wounded eight civilians and destroyed or damaged dozens of homes. The OSCE recorded 16,000 ceasefire violations between Dec. 11 and Dec. 17, a 35 percent increase on the week before. U.S. special envoy for the Ukraine conflict Kurt Volker has said 2017 was the deadliest year in the region since the outbreak of violence three years ago, and warned that hostilities are again ratcheting up. (Reuters, 12.19.17, RFE/RL, 12.19.17)
• Casualties from land mines and similar booby-trap explosives increased for the second consecutive year in 2016, to the highest level since a treaty banning such weapons of war took effect in 1999, a monitoring group said Dec. 14. The group, the International Campaign to Ban Landmines, attributed the increased casualties largely to armed conflicts in Afghanistan, Libya, Ukraine and Yemen. Thirty-four countries remain outside the treaty, including China, Russia and the United States. (New York Times, 12.14.17)
• A new study by European economists released Dec. 14 shows that the West is paying a hefty price for its sanctions against Russia due to retaliatory measures, the inaccessibility of loans and a more general perception of a loss of trust. The study says the sanctions resulted in $114 billion worth of lost revenue between early 2014 and the end of 2015, but the pain was shared almost equally between Russia, which lost more than $65 billion, and the U.S. and EU, which together sustained more than $50 billion in losses. Germany was the hardest hit, accounting for almost 40 percent of the West's losses. (The Washington Post, 12.14.17)

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

• A new U.S. national security strategy made public Dec. 18 presents China and Russia as competitors that want to realign global power in their interests, potentially threatening the United States. The document describes Russian aggression against its neighbors: "With its invasions of Georgia and Ukraine, Russia demonstrated its willingness to violate the sovereignty of states in the region." (The Washington Post, 12.18.17, CNN, 12.18.17)
• The outgoing U.S. Army Europe commander says America’s continued commitment to European security in the face of Russian aggression is in Washington’s interest. Lt. Gen. Ben Hodges said on Dec. 15 in Wiesbaden that the U.S. wants Russia to be “once again part of the international democratic community,” according to prepared remarks. (AP, 12.15.17)

Red lines and tripwires:

• No significant developments.

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

• No significant developments.

Arming and training of Ukrainian forces by Western countries:

• A Pentagon proposal that would pose a direct challenge to Moscow—a plan to deliver lethal arms to Ukrainian forces battling Russia-backed separatists—has languished in internal debates for months. A decision to send arms has to be made by the president, and officials said Donald Trump has been reluctant even to engage. (The Washington Post, 12.14.17)

Strategies and actions recommended:

• No significant developments.

Analysis:

• In Ukraine it is time to call a spade a spade. The reform process set in motion after the 2014 Maidan revolution is stagnating. The political leaders nominally committed to reforms are instead preparing for presidential and legislative elections scheduled for 2019. (Financial Times, 12.19.17)
• Michael Kofman, a military analyst, describes three scenarios for Russian aggression in Ukraine, writing: “The conflict in Ukraine remains an interstate war, though its relatively stable front line is beset by recurrent cycles of escalation. … Russia’s overarching objective remains keeping Ukraine in its privileged sphere of influence, denying the country opportunities to join either NATO or the European Union. … Given the interests at stake, Russian leadership is unlikely to let the present situation drift, with its attendant political and economic costs, without taking some action to alter the present state of affairs.” (American Enterprise Institute, 12.12.17)
• Andrew Wilson, a senior policy fellow at the European Council on Foreign Relations, writes that Russia “still has unresolved issues with accepting Ukraine’s right to exist as a nation-state, and Russia is likely to try to keep Ukraine weak and dysfunctional in whatever way possible.” He continues: “Although Ukraine is less vulnerable to Russian subversion and destabilization than it was in 2014, Russia will concentrate its efforts in the many areas where Ukraine is weakest. … Ukraine making real economic and political progress is the best protection against Russian destabilization.” (American Enterprise Institute, 12.12.17)
• Mikheil Saakashvili, former president of Georgia and former Odessa governor, writes: “The prosecutor general announced that I am an agent of the Russian secret police and that my goal is to destabilize Ukraine. Ukraine is, indeed, being destabilized by Russia. And indeed, Russia has powerful allies in this destabilization: Ukraine’s homegrown, greedy and corrupt elites, who have turned what could be one of Europe’s wealthiest countries into one of its poorest.” (New York Times, 12.15.17)
• Kiev has been the scene of a somewhat farcical drama this month centering on Mikheil Saakashvili, the former Georgian president-turned-Ukrainian dissident. The resulting street theater has served only to draw attention to the case he has been making: that Poroshenko's government, which promised to put an end to the endemic corruption that has haunted Ukraine since it became independent in 1991, has instead become a major obstacle to reform. (The Washington Post, 12.14.17)
• Nuclear deterrence thinking has become so entrenched in U.S. academic and policy circles that it only seems natural that other states regard nuclear weapons in the same terms. Yet is it necessarily so? In this article, the authors, Mariana Budjeryn and Polina Sinovets, examine the case of Ukraine to understand how its leaders interpreted the value of the nuclear weapons deployed on Ukrainian territory in 1990-1994. They demonstrate that deterrence thinking, far from being a "natural" or systemically determined way of regarding nuclear weapons, is a socially constructed and historically contingent set of concepts and practices. (Wilson Center, December 2017)

Other important news:

• Police and protesters have clashed in central Kiev as several thousand people took to the streets of the Ukrainian capital to call for the impeachment of President Petro Poroshenko and the resignation of the country's top prosecutor. (RFE/RL, 12.17.17)
• Russia is to withdraw its military officers from a joint Russia-Ukraine center monitoring a fragile truce in the conflict-torn eastern Ukraine. Russia's Foreign Ministry accused Ukraine of preventing the officers from carrying out their duties, saying they would leave Dec. 19. Kiev said the move was a "provocation," seriously undermining deals to end the conflict with Russian-backed rebels. (BBC, 12.18.17)
• Poroshenko and visiting President Andrzej Duda of Poland discussed bringing in peacekeepers as a step in ending the armed conflict between Ukrainian forces and Russian-backed separatists in eastern Ukraine. (AP, 12.13.17)
• Courts in Russia-controlled Crimea on Dec. 18 fined dozens of Crimean Tatars over single-person demonstrations, in a move which Amnesty International called "a brazen crackdown." (RFE/RL, 12.18.17)
• Deutsche Bank earlier this year flagged around $30 million in potentially suspicious transactions as part of an internal investigation into its role as a conduit for money involving former Trump campaign chairman Paul Manafort or people and entities connected to him, according to a person briefed on the matter. The transactions took place from roughly 2010 to 2015 when Manafort was working for the government of Ukraine. (Wall Street Journal, 12.14.17)
• A U.S. federal judge on Dec. 15 said a bail package has been put together that would release Manafort from home confinement in his condominium in Virginia and allow him to reside at his house in Palm Beach Gardens, Fla., but under a nightly curfew and on GPS monitoring. Manafort would like to spend the Christmas holiday at his estate in Bridgehampton, New York, according to a document filed by his legal team on Dec. 18. (The Washington Post, 12.15.17, Bloomberg, 12.18.17)
• A federal judge on Dec. 11 declined to punish Manafort for helping write an opinion article for a newspaper in Ukraine defending his work there. But the judge warned she would likely consider any similar actions in the future as a violation of the existing gag order barring comments outside court as Manafort faces trial on criminal fraud charges. (The Washington Post, 12.11.17)
• Poroshenko is set to propose a new central bank governor this week, filling a position that’s been vacant since May as the government struggles to get its $17.5 billion bailout back on track with the International Monetary Fund. (Bloomberg, 12.18.17)
• A Russian court has rejected a claim by German conglomerate Siemens that the sale of power turbines that were delivered to Ukraine's Russian-occupied Crimea region was invalid. (RFE/RL, 12.14.17)
• On Dec. 12, U.S. Ambassador to Russia Jon Huntsman said Crimea belongs to Ukraine according to international law. "It's not for the U.S. ambassador to determine who Crimea belongs to,” Russian lawmaker Alexei Pushkov said in response. (The Moscow Times, 12.14.17)
• Since its seizure of Ukraine’s Crimean Peninsula in 2014, Russia has used a statute criminalizing public calls for separatism to jail at least a half dozen people for criticizing that land grab. It appears presidential hopeful Ksenia Sobchak, who has voiced similar dissent, won’t be added to that list. (RFE/RL, 12.14.17)
• Ukraine`s general prosecutor said Dec. 15 that Mikheil Saakashvili, the stateless ex-Georgian president turned Ukraine opposition figure, faced ”likely” extradition to Tbilisi late this year or early 2018—after exhausting legal attempts to prolong his grounds for staying on Ukrainian territory. Saakashvili appeared at the prosecutor’s office Dec. 18, but refused to answer questions from investigators. (Financial Times, 12.15.17, RFE/RL, 12.18.17)
• “What Mikheil Saakashvili is doing is spitting in the face of the Georgian people, and of the Ukrainian people. How can you stand it? My heart is bleeding, it’s so sad to see,” Russian President Vladimir Putin said at his Dec. 14 press conference. (The Moscow Times, 12.14.17)
  • Putin lectured a Ukrainian journalist at the annual press conference about the impossibility of Ukraine as a nation: “Just listen to your Russian,” he said. “You speak without an accent, and mentally you’re Russian.” Russia and Ukraine were “one nation,” he said. “There’s nothing between us. Nothing.” (Independent, 12.14.17)
  • “We don’t want Russia to become a version of Ukraine. We don’t want that... I’m sure the majority of Russians don’t want that and won’t allow it,” Putin said at his annual press conference on Dec. 14. (The Moscow Times, 12.14.17)
  • “The Ukrainian government has no desire whatsoever for a peace process... It is up to authorities in Kiev to reach an agreement with Donbass,” Putin said at his Dec. 14 press conference. (The Moscow Times, 12.14.17)
• The top court in Ukraine's Russia-controlled Crimea region has upheld a separatism conviction against journalist Mykola Semena in a case that has been criticized by media freedom advocates and Western governments. (RFE/RL, 12.18.17)
• Journalist David Patrikarakos has written a new book called "War in 140 Characters." Reporting on the war between Russia and Ukraine, he found that Twitter knew things long before traditional media did and that part of the Ukrainian army's supply system was run by a woman who had a Facebook account and no official job. But it wasn't just that: The actual military moves seemed less important than the stories both sides were spinning online. (The Washington Post, 12.14.17)