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Two things were clear after U.S. Secretary of State John Kerry’s four hours of talks with Russian Foreign Minister Sergei Lavrov in Paris last Sunday (March 30). One was that the United States accepts that nothing can be done about Russia’s annexation of Crimea. Kerry continues to describe Russia’s action as “illegal and illegitimate”, but Crimea was not even mentioned in the communique released to the public.

The other is that the transformation of Ukraine into a neutral, federal state is now firmly on the table. Kerry repeatedly voiced the mantra that there must be “no decisions about Ukraine without Ukraine”, but he also agreed with Lavrov that the subjects that need to be discussed include rights for national minorities, language rights, the disarmament of irregular forces and a constitutional reform that would make Ukraine a federal state.

By “rights for national minorities” and “language rights”, he meant a special political status for Ukraine’s 17 percent ethnic Russian minority and maybe even for the much larger number of Ukrainians—probably 40 to 45 percent—who speak Russian on a daily basis. Moscow is asserting its right to intervene in Ukraine’s internal affairs to “protect” these minorities, and Kerry is at least willing to talk about it.

By “disarmament of irregular forces”, Lavrov had meant the armed right-wing groups that played a small part in the revolution and still make occasional appearances on Independence Square and elsewhere in Kyiv. These groups are Moscow’s pretext for claiming that there has been a “fascist coup” in Kyiv, from which it says that it has a duty to protect Russians and Russian-speakers in Ukraine.

Kerry may also have had in mind the armed pro-Moscow militias that occasionally appear in eastern Ukrainian cities, but he didn’t say so. Nor did he mention the fact that the Kyiv government is already moving to disarm, break up, and arrest the right-wing groups in western Ukrainian cities.

By talking about “federalizing” Ukraine, Kerry was implicitly accepting that the Russian demand for a radical decentralization of the country (which could give pro-Russian governments in some eastern Ukrainian provinces a veto on decisions in Kyiv) is a legitimate topic for negotiation.

It’s no wonder that a satisfied Sergei Lavrov called the talks “very very constructive”, or that the Ukrainian foreign ministry spokesperson said Russia was demanding “Ukraine's full capitulation, its split and the destruction of Ukrainian statehood”. And although Kerry promises “no decisions without Ukraine”, Kyiv might not be able to reject American pressure to accept these concessions in its current gravely weakened state.

If all this makes John Kerry sound like a latter-day Neville Chamberlain appeasing Moscow, well, maybe he is. But that’s not clear yet.

Maybe the United States is getting ready to sell Ukraine down the river, or maybe Kerry is just giving sweet reason a try before the gloves come off. Likewise, maybe the Russians are really planning to turn Ukraine into a satellite—or maybe they just want to make it formally neutral. And how awful would that be?

There is nothing wrong with trying to stop this thing from turning into a new Cold War. Since NATO has no intention of offering Ukraine membership, formal neutrality could be a sensible way out of the current crisis so long as it does not preclude closer trade and travel ties with the European Union. But the Russians are also pushing hard for a “federalized” Ukraine.

“Given the proportion of native Russians in Ukraine,” said Lavrov, “we propose this and we are sure there is no other way.” That could be a deal-killer, especially since Moscow is starting to insist that the constitutional changes and a referendum on them be completed before the national election in Ukraine that is currently scheduled for May 25.

These changes would be decided not by the Ukrainian government, but by a “nationwide dialogue” in which all regions would have an equal voice—including the eastern regions where there are many Russians, and 40,000 Russian troops poised just across the border. And, said Lavrov, the regions should have more power over, among other things, foreign trade, cultural ties abroad, and relations with neighbouring states, including Russia.

It is a program, in other words, for the effective dismantling of the Ukrainian state, and it’s hard to see how even John Kerry and President Barack Obama can support that. Meanwhile, the level of panic is rising in the eastern European members of NATO, and especially in Latvia, Lithuania, and Estonia, which also have Russian minorities and border directly on the Russian Federation.

Vladimir Putin, fresh from his Crimean victory, is seriously overplaying his hand. Poland and the three Baltic states are now pushing for permanent NATO military bases on their territory, something the alliance has avoided since they joined in order not to antagonize Moscow. A confidential NATO paper leaked to Der Spiegel even talks about boosting military cooperation with Moldova, Armenia, and Azerbaijan, all former Soviet republics.

The odds on a new Cold War have gone up quite a lot in the past week.