Both Ukraine and Russia's economy are in dire straits as the conflict rages on. On Friday, Russia's Prime Minister Dmitry Medvedev said there were "no easy solutions" to Russia's economic problems, Reuters reported, citing the RIA news agency.
Carsten Nickel, senior vice president of Teneo Intelligence, said that the latest negotiation initiative by Merkel and Hollande was "unlikely to provide a quick solution for the ongoing conflict in eastern Ukraine."
"Putin is unlikely to have a major interest in calming down the crisis at this point. More likely, in accepting talks, the Russian leader might see a chance of adding to an emerging transatlantic rift over the issue of arms supplies to Kiev," Nickel said in a note Friday.
Russia was likely to bide its time, he added.
"Moscow will likely want the separatists to secure sites that would guarantee the sustainability of their territorial control in the situation of a frozen conflict; and – at the same time – an area large and economically powerful enough to claim a strong say in Ukrainian domestic politics if any negotiated solution were ever to emerge," he said.
"The underlying Russian rationale remains the same: Moscow wants to prevent Ukraine's membership in NATO and EU."
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Russia's economy has been hit hard by the severe decline in global oil prices and Western sanctions. This, in turn, has caused the ruble to weaken dramatically, pushing up the rate of inflation. Similarly, Ukraine's currency, the hryvnia, has also weakened substantially and, like Russia, its central bank has hiked interest rates in an effort to stop the rout.
Over the last six months, the hryvnia has fallen around 97 percent against the dollar; the Russian ruble, by contrast, has fallen around 46 percent against the dollar in the same period.