Donald Trump has recently suggested negotiators have made 'tremendous progress' on a Russia-Ukraine peace agreement. A fair and durable settlement, however, remains elusive. According to Dennis Shen, an outcome that is overly accommodating of Russia’s war aims would only deepen present global geopolitical tensions and compound fiscal and economic challenges
In November, Ukrainian and European officials made a 19-point counter-offer to an original 28-point peace Russia-US plan devised by Trump negotiator Steve Witkoff and Kremlin official Kirill Dmitriev. The counter-offer aimed at preserving Ukraine’s sovereignty while reducing elements Ukraine's government has seen as being too favourable to Moscow. Ukraine President Volodymyr Zelenskyy concedes that much of the revised document 'could be accepted'. This, at least, suggests a degree of openness on Zelenskyy's part towards further refinement.
Kyiv rightfully continues to seek NATO Article 5-style security guarantees as a part of any peace arrangement. Zelenskyy recently revealed he asked for US security guarantees lasting for half a century to help deter future Russian aggression. Current US security guarantee proposals under discussion set out a 15-year term with the possibility of an extension. Such guarantees, if confirmed by the US Congress, would have to be combined with pledges by nations of the so-called Coalition of the Willing, alongside possible European Union membership, to form any more reliable security network for Ukraine.
Any guarantees of security from the US would need to be combined with pledges from the Coalition of the Willing and EU membership to form any more reliable security apparatus
Nevertheless, following the failures of the 1994 Budapest Memorandum, the Ukrainian government, understandably, remains cautious about any non-binding security pledges.
Many aspects of the original 28-point plan would have been nearly impossible for Ukraine and Europe to accept. The Ukrainian Constitution states the nation is 'indivisible'. Any ceding of territory may thus be subject to a national referendum; it could not be granted unilaterally.
Russian President Vladimir Putin’s 2022 decision to annex the Donbas, alongside Zaporizhzhia and Kherson oblasts, restricts his space for negotiations. At Putin's request, lawmakers amended the Russian Constitution banning the relinquishing of such territory – curtailing his space for manoeuvre.
The core challenge remains reaching any hypothetical agreement that may be acceptable to both Ukraine and Russia. The latest draft of an agreement might be less favourable to Moscow, leaving Zelenskyy and US President Trump to decide on many of the most sensitive issues. However, Moscow has signalled reservations about the updated conditions, and it remains unclear how dedicated Moscow is to achieving peace. The leak of the initial 28-point plan blindsided Ukraine, Europe and most US policymakers, underscoring the need for clearer coordination.
The core challenge for negotiators remains reaching an agreement acceptable to both Ukraine and Russia
A contentious point in the original plan was the proposal to shift US$100bn of frozen Russian assets to US investment funds. The money was intended for US-spearheaded efforts to rebuild Ukraine and facilitate US-Russian investment projects. This proposal interrupted EU talks around plans for the same assets.
The proposal to use frozen Russian assets for a US-led peace plan intensified pressures on the European Union to agree on whether, or how, to make frozen Russian assets held in Europe available for financing Ukraine's war efforts and current spending requirements.
EU leaders last month opted to fund Ukraine for 2026–27 through a €90bn loan based on EU borrowing on the capital markets. That might have been a disappointing outcome for many who had argued it as being vital to activate frozen Russian assets for funding Ukraine, so Russia pays for the war. Ukraine has hefty financing requirements of around $50bn a year and more than $200bn by the end of this decade.
In the end, any fuller ceasefire or settlement that is too favourable for Russia may only exacerbate geopolitical and economic risks for Europe.
Any ceasefire or settlement too favourable to Russia may exacerbate geopolitical and economic risks
And any scenario allowing Russia to consolidate its territorial gains since 2022 – especially if accompanied by further concessions and/or sanctions relief – would, as history has taught, heighten the risk of renewed or expanded conflict.
Such elevated geopolitical uncertainty after a hypothetical Russia-friendly settlement would only place added pressure on European defence spending, challenging already strained arms budgets. And just as the onset of Russia’s full-scale war in 2022 contributed to a broader global cost-of-living crisis, such uncertainty might undermine global economic stability.
After the recent talks in Berlin, President Zelenskyy described another draft peace plan with the US as being ‘very workable’. He nevertheless cautioned that the same core points of contention – notably what happens to Ukrainian territory, the fate of the Russian-controlled Zaporizhzhia nuclear power plant, and postwar security guarantees for Ukraine – remain unresolved.
As hostilities continue, some divergences between Ukraine and Russia appear to be slowly narrowing, especially as Ukraine’s negotiating position shifts. Ukrainian forces face growing operational strain, whereas Russian forces are making only slow gains in the contested Donbas. Ukraine recently suggested a referendum around territorial concessions or, alternatively, holding general elections if a ceasefire was achieved. Both proposals were swiftly shot down by the Kremlin. Trump’s relentless pursuit of peace at any price has probably moved the needle somewhat.
However, the conflict, soon to enter its fifth year, looks set to drag on well into 2026.
