NATO Says Russian Troops Must Leave Ukraine as Truce Strains

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NATO called on Russian troops to withdraw from Ukraine, while the Kremlin warned that Europe’s security would be threatened by a renewed outbreak of fighting as the fragile cease-fire came under strain.

Events must be stopped from “spiraling out of control,” Jens Stoltenberg, secretary general of the North Atlantic Treaty Organization, said after talks with Russian Foreign Minister Sergei Lavrov in Brussels on Tuesday. Russia must “withdraw all its troops and support for the separatists” in eastern Ukraine, he said.

An escalation in the conflict “would have the most negative consequences both for Ukraine and for the whole European security system,” Lavrov told a ministerial meeting of the Council of Europe in Brussels on Tuesday, according to a transcript on the Russian Foreign Ministry’s website. Resolving the crisis depends on implementing “in full” the peace agreement negotiated in Minsk, Belarus, in February, he said.

Russia has repeatedly denied accusations from the U.S., NATO and the European Union that it’s sent forces and weapons to aid rebels in the yearlong conflict in eastern Ukraine that has killed more than 6,100 people and caused tensions to surge between the former Cold-War foes to their highest since the collapse of the Soviet Union. Ukraine said two fighters captured in the east on Saturday were Russian officers, prompting the Defense Ministry in Moscow to respond that they weren’t active “at the time of their arrest.”

Military Drills

NATO’s “concerned about the large number of snap exercises conducted by Russia, because this decreases transparency and predictability,” Stoltenberg said. While the military alliance has “suspended all practical cooperation” with Russia, it’s “keeping lines of political contact open.”

Respect for the Minsk accord applies both to Russia and Ukraine, French President Francois Hollande said on Tuesday after talks in Berlin with German Chancellor Angela Merkel. The Minsk deal is the only basis for peace in Ukraine, Merkel said.

Four Ukrainian soldiers were killed and two were wounded on Tuesday in the Luhansk region, the regional government said. Ten more government troops were wounded in the past day as an area of active fighting expanded near the city of Donetsk, Ukrainian military spokesman Andriy Lysenko told reporters in Kiev on Tuesday.

A civilian died when a residential building in Donetsk was hit during shelling by Ukrainian forces at night, the separatist-run DAN news service reported on Tuesday, citing the city administration.

Debt Servicing

The cost of servicing Ukraine’s debt now equals the amount it spends on defense, the government said in a statement on Tuesday. It sought and received parliamentary approval for powers to potentially impose a moratorium on payments to international creditors as negotiations on a $23 billion restructuring approach a June deadline.

Ukrainian sovereign bonds reversed gains after the statement, extending their decline to six days. The nation’s $1.6 billion of notes maturing in September 2017 slid 1.35 cents, the most in two months, to 44.94 cents on the dollar at 3:48 p.m. in Kiev.

The government needs the right to impose a moratorium on debt held by private creditors to help the budget and economy withstand Russian aggression, Ukrainian Prime Minister Arseniy Yatsenyuk told lawmakers in Kiev. It may not use the powers, though it can’t keep taking new loans to repay existing debt and “hopes” to reach a deal on restructuring.

Loan Agreement

EU leaders are set to extend sanctions against Russia over the Ukrainian conflict until the end of this year at a summit next month, a German government official, speaking on condition of anonymity, told reporters in Berlin on Tuesday. The restrictions on Russian banks, defense and energy industries were imposed last July for a year and will expire unless renewed.

The EU will sign a memorandum of understanding on a 1.8 billion euro loan to Ukraine at a summit in Riga, Latvia, this week, EU Commission Vice President Valdis Dombrovskis said by phone from Strasbourg, France. The loan will be disbursed in three tranches, with the first provided after signature, another in the second half of the year, and the final payment made in 2016, he said.

About 970,000 refugees from Ukraine are in Russia, Federal Migration Service chief Konstantin Romodanovksy said in Moscow on Tuesday. An average of 300 people per day returned to eastern Ukraine last week and “we’re seeing an equilibrium between departures and arrivals,” he said.

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