Putin Calls For "Immediate Talks" Over Eastern Ukraine "Statehood"

Vladimir Putin, who has repeatedly said that he does not favor the break-up of Ukraine - but only greater autonomy for the East, appears to have changed course rather dramatically today. In a speech broadcast on Russian TV, the Russian leader stated "we need to immediately begin substantive talks... on questions of the political organisation of society and statehood for southeastern Ukraine." As The Washington Post reports, use of the word "statehood" reflects a major shift in Kremlin policy towards 'Novorossiya' - it would be a direct challenge not only to Kiev but also to Western European nations and the United States, which have been trying to force Moscow to back down. While not directly addressing the latest round of sanctions chatter, Putin concluded, perhaps ominously, "they should have known that Russia cannot stand aside when people are being shot almost at point-blank."

As AFP reports,

President Vladimir Putin today dramatically raised the stakes in the Ukraine conflict by calling for the first time for statehood to be considered for the restive east of the former Soviet state.

"We need to immediately begin substantive talks... on questions of the political organisation of society and statehood for southeastern Ukraine with the goal of protecting the lawful interests of the people who live there," Putin was quoted as saying by Russian news agencies on a TV show broadcast in the far east of the country.

Russia has previously only called for greater rights under a decentralised federal system to be accorded to the eastern regions of Ukraine, where predominantly Russian-speakers live.

And as The Washington Post reports,

Putin spoke of the need to end hostilities before winter and criticized European leaders for supporting Ukraine, in remarks made during a television interview first broadcast in Russia's Far East and reported from Vladivostok by Russian news agencies. The interview was to be broadcast in Moscow seven hours later.

Putin has said repeatedly that he does not favor the breakup of Ukraine — though Russia seized Crimea from Ukraine in March — but only greater autonomy for the east. The word "statehood" suggests more than that, and if it reflects a major shift in Kremlin policy, it would be a direct challenge not only to Kev but also to Western European nations and the United States, which have been trying to force Moscow to back down.

...

"These are the inclusive talks that should determine the relationship with the eastern regions, that is, negotiations inside Ukraine on the internal Ukrainian order with respect for the interests of the country's eastern regions, the interests of Novorossiya," Peskov told reporters, according to Russian state-owned news agency Itar-Tass.

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Doesn't sound very de-esacalation-y to us... but we are sure stocks will rally on the hopes of front-running the post-escalation de-escalation buying panic.