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It seems that Putin’s focus has shifted toward re-establishing ties with the European Union. That will be a tougher battle than the one for Debaltseve. Poroshenko has been demanding “a firm reaction from the world to Russia’s brutal violations of the Minsk agreements,” and some European officials have been willing to oblige. Federica Mogherini, the EU’s high representative for foreign affairs, has condemned the separatist takeover in Debaltseve as a “clear violation of the cease-fire,” and so has Steffen Siebert, spokesman for German Chancellor Angela Merkel. (The German leader has been on the phone daily with Putin and Poroshenko to defuse the Debaltseve crisis, and although she must see the Ukrainian retreat as a blessing, it shouldn’t be a surprise that she won’t say so publicly. With Putin’s intentions so hard to read, she still has to focus on trying to contain him and on mollifying the United States, where some are still calling for arming Ukraine.)

It’s a volatile situation, but I expect the tensions to subside in the coming weeks. The Minsk agreement contains enough contradictions for Putin to reignite the conflict, should he so desire. But for now, he appears to want breathing space so he can try to convince the West to ease its economic pressure on Russia.

Ukraine, for its part, should use the coming lull in the conflict to speed up its economic reforms. Poroshenko is running out of time on this front: even before the country’s most recent military failures, Ukrainians were increasingly unhappy with galloping inflation and unrepentant official corruption. Semen Semenchenko, the Ukrainian legislator and field commander whose unit fought at Debaltseve, railed against the Kyiv military leadership on Facebook: “We had enough strength and materiel. The problem is with the command, the co-ordination of action.” He added that Ukrainian volunteer fighters had been paying with their lives for the “lies” of top brass trying to gloss over the military situation.

Even if Putin is hoping for a coup in Kyiv, Poroshenko can frustrate him by showing Ukrainians their country is making progress on its path toward Europe. With financial assistance about to arrive from the International Monetary Fund, the embattled Ukrainian leader may have just enough space to make some quick reforms to regain his voters’ trust.

Bloomberg News

Leonid Bershidsky writes from Berlin.