From Minsk to Wales, Germany is the key

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The road to the Minsk summit this past Tuesday began to be paved when German Chancellor Angela Merkel talked to ARD public TV after her brief visit to Kiev on Saturday.

Merkel emphasized, "A solution must be found to the Ukraine crisis that does not hurt Russia."

She added that "There must be dialogue. There can only be a political solution. There won't be a military solution to this conflict."

Merkel talked about "decentralization" of Ukraine, a definitive deal on gas prices, Ukraine-Russia trade, and even hinted Ukraine is free to join the Russia-promoted Eurasian Union (the EU would never make a "huge conflict" out of it). Exit sanctions; enter sound proposals.

She could not have been more explicit; "We [Germany] want to have good trade relations with Russia as well. We want reasonable relations with Russia. We are depending on one another and there are so many other conflicts in the world where we should work together, so I hope we can make progress."

The short translation for all this is there won't be a Nulandistan (after neo-con Victoria "F**k the EU" Nuland), remote-controlled by Washington, and fully financed by the EU. In the real world, what Germany says, the EU follows.

Geopolitically, this also means a huge setback for Washington's obsessive containment and encirclement of Russia, proceeding in parallel to the "pivot to Asia" (containment and encirclement of China).

It's the economy, stupid

Ukraine's economy -- now under disaster capitalism intervention -- is... well, a disaster. It's way beyond recession, now in deep depression. Any forthcoming IMF funds serve to pay outstanding bills and feed the (losing) creaking military machine; Kiev is fighting no less than Ukraine's industrial heartland. Not to mention that the conditions attached to the IMF's 'structural adjustment' are bleeding Ukrainians dry.

Taxes -- and budget cuts -- are up. The currency, the hryvnya, has plunged 40 percent since early 2014. The banking system is a joke. The notion that the EU will pay Ukraine's humongous bills is a myth. Germany (which runs the EU) wants a deal. Fast.

The reason is very simple. Germany is growing only 1.5 percent in 2014. Why? Because the Washington-propelled sanction hysteria is hurting German business. Merkel finally got the message. Or at least seems to have.

The first stage towards a lasting deal is energy. This Friday, there's a key meeting between Russian and EU energy officials in Moscow. And then, later next week, it will be Russian, EU and Ukrainian officials. The EU's energy commissioner, Gunther Oettinger, who was in Minsk, wants an interim deal to make sure Russian gas flows through Ukraine to Europe in winter. General Winter, once again, wins any war.

Here, essentially, we have the EU -- not Russia - telling Ukrainian President Petro Poroshenko to stuff his (losing) "strategy" of slow-motion ethnic cleansing of eastern Ukraine.

Moscow has always insisted the Ukraine crisis is a political problem that needs a political solution. Moscow would accept a decentralization solution considering the interests -- and language rights -- of people in Donetsk, Lugansk, Odessa, Kharkov. Moscow does not encourage secession.

Poroshenko, on the other hand, is your typical Ukrainian oligarch in a dance of oligarchs. Now that he's on top, he does not want to become road kill. He might, if he relies on "support" by the neo-Nazis of Right Sector and Svoboda, because then there will never be a political solution.