Germany and Russia have been working on a secret plan to broker a peaceful solution to end international tensions over Ukraine.
The Independent can reveal that the peace plan, being worked on by both Angela Merkel and Vladimir Putin, hinges on two main ambitions: stabilising the borders of Ukraine and providing the financially troubled country with a strong economic boost, particularly a new energy agreement ensuring security of gas supplies.
More controversially, if Ms Merkel’s deal were to be acceptable to the Russians, the international community would need to recognise Crimea’s independence and its annexation by Russia, a move that some members of the United Nations might find difficult to stomach.
Sources close to the secret negotiations claim that the first part of the stabilisation plan requires Russia to withdraw its financial and military support for the various pro-separatist groups operating in eastern Ukraine. As part of any such agreement, the region would be allowed some devolved powers.
In pictures: Malaysia Airlines flight MH17 crash
In pictures: Malaysia Airlines flight MH17 crash
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A man cycles past a piece of the wreckage of the Malaysia Airlines flight MH17 in Petropavlivka, Ukraine
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Dutch military personnel carry a coffin containing the remains of the victims of the MH17 plane crash to a hearse at the airbase in Eindhoven, The Netherlands. A Dutch Air Force C-130 Hercules plane and an Australian Royal Australian Air Force C17 transport plane brought back 74 more coffins containing remains of the victims of the Malaysia Airlines MH17 plane crash, from Kharkiv in eastern Ukraine to the Eindhoven air base in the Netherlands
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A couple is backdropped by pictures of victims of the MH17 air crash during a memorial concert in Kharkiv, Ukraine
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A man lights a candle as family and friends attend a multi-faith service at St. Paul's Cathedral in Melbourne for those who lost their lives on Malaysia Airlines flight MH17
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A woman cries after leaving a photograph (L) on the altar during a multi-faith service at St. Paul's Cathedral in Melbourne for those who lost their lives on Malaysia Airlines flight MH17
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Sympathizers hug in front of flowers tribute at the entrance to the Korporaal van Oudheusdenkazerne, army barracks, in Hilversum, The Netherlands, where bodies of the people killed in the Malaysia Airlines MH17 air crash in Ukraine will be identified
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Angela (R) and George Dyczynski (L), walk past a Flight MH-17 memorial after arriving at Schiphol Airport, the Netherlands. Mr and Mrs Dyczynski have flown from Perth, Australia, to search for their daughter, Fatima, who was on board Malaysia Airlines flight MH-17 which crashed in the Ukraine
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The tower and airport buildings are reflected in the window of a terminal building as an airline hostess arranges floral tributes placed at the the Schiphol Airport, near Amsterdam, The Netherlands
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Members of the church share their grief at a Multifaith memorial service held for victims of the MH17 disaster at St Paul's Cathedral in Melbourne, Australia
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The column of funeral hearses drive near Boxtel after leaving the airbase in Eindhoven to Hilversum, The Netherlands, after the arrival of a Dutch Air Force C-130 Hercules plane and an Australian Royal Australian Air Force C17 transport plane with the first bodies of the 298 victims of the Malaysia Airlines MH17 plane crash in eastern Ukraine arrives from Kharkiv, Ukraine
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A procession of hearses carrying the bodies of victims in the Malaysia Airlines flight MH-17 crash, depart after a ceremony at Eindhoven Airbase, the Netherlands
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(L-R) King Willem-Alexander, Queen Maxima and Dutch Prime Minister Mark Rutte at the airbase in Eindhoven, The Netherlands, during the arrival of a Dutch Air Force C-130 Hercules plane and an Australian Royal Australian Air Force C17 transport plane with the first bodies of the 298 victims of the Malaysia Airlines MH17 plane crash in eastern Ukraine arrives from Kharkiv, Ukraine
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Bodies of victims in the Malaysia Airlines flight MH-17 crash are transferred to funeral hearses by Dutch military personnel during a ceremony at Eindhoven Airbase, the Netherlands. The bodies were flown from Kharkiv, Ukraine, to the Netherlands after being recovered from the crash site
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Relatives of victims of the downed Malaysia Airlines flight MH17 react as people wearing white clothes gather in memory of the victims, in Amsterdam
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People release white balloons in the air during a silent march in memory of the victims of the downed Malaysia Airlines flight MH17, on July 23, 2014 in Amsterdam
Getty Images
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People gather during a silent march in memory of the victims of MH17, in Amsterdam
Getty Images
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Hearses carry coffins containing unidentified bodies from the crash of Malaysia Airlines flight MH17 leave the airport in Eindhoven, Netherlands
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A column of funeral hearses carrying the bodies of Dutch passengers after leaving the airbase in Eindhoven
EPA
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The extent of the wreckage at the site where Malaysia Airlines MH17 crashed near Hrabove (Grabovo) close to Donetsk
Reuters
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A Malaysian man lights up candles during a vigil in remembrance for passengers and crew of the Malaysian Airline flight MH370 & MH17 in Petaling Jaya near Kuala Lumpur, Malaysia
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Belongings of victims are pictured at the crash site of the Malaysia Airlines flight MH17 in a field near the village of Grabove, in the Donetsk region
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Flowers lie on the tarmac of Kharkiv airport as a Hercules transport aircraft, belonging to the Royal Dutch Airforce, prepares to take off
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Honour guards load a coffin of one of the victims of Malaysia Airlines MH17 downed over rebel-held territory in eastern Ukraine on to a transport plane heading to the Netherlands at Kharkiv airport
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A coffin containing the body of a victim of the crash of Malaysia Airlines flight MH17 is loaded onto a plane for transport to the Netherlands during a departure ceremony in Kharkiv, Ukraine
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A coffin containing the body of a victim of the crash of Malaysia Airlines flight MH17 is loaded onto a plane for transport to the Netherlands during a departure ceremony on July 23, 2014 in Kharkiv, Ukraine
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Honour guards take part in a ceremony with coffins of some of the victims of Malaysia Airlines MH17 downed over rebel-held territory in eastern Ukraine before they are being loaded on to a transport plane heading to the Netherlands at Kharkiv airport
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A coffin containing the body of a victim of the crash of Malaysia Airlines flight MH17 is loaded onto a plane for transport to the Netherlands during a departure ceremony in Kharkiv, Ukraine
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Dutch flags fly half-staff in honour of 3 citizens, a mother,17 year old daughter and 13 year old son were among the victims of flight MH17 in Delft, Netherlands
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On-lookers during a ramp ceremony at Kharkiv Aiport
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A worker uses a forklift to load coffins containing some of the remains of the victims of Malaysia Airlines MH17 downed over rebel-held territory in eastern Ukraine on to a transport plane before they head to the Netherlands at Kharkiv airport
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People lay coffins containing some of the remains of the victims of Malaysia Airlines MH17 downed over rebel-held territory in eastern Ukraine on the tarmac before loading them on a transport plane heading towards the Netherlands at Kharkiv airport
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Ukrainian officials attend a farewell ceremony near the transport plane used to carry some of the remains of the victims of Malaysia Airlines MH17 downed over rebel-held territory in eastern Ukraine, before it heads off to the Netherlands at Kharkiv airport
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The train carrying the bodies recovered from the downed Malaysian flight MH17 arrives at the Malyshev Plant, in the government-held Ukrainian city of Kharkiv
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A Ukrainian policeman watches as a train carrying the remains of the victims of Malaysia Airlines MH17 downed over rebel-held territory in eastern Ukraine arrives in the city of Kharkiv in eastern Ukraine
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Police officers secure a refrigerated train loaded with bodies of the passengers of Malaysian Airlines flight MH17 as it arrives in a Kharkiv factory for a stop
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A guard stands on a train carrying the remains of victims of Malaysia Airlines MH17 downed over rebel-held territory in eastern Ukraine after it arrived in the city of Kharkiv, eastern Ukraine
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An armed pro-Russian separatist stands guard as monitors from the Organization for Security and Cooperation in Europe (OSCE) and a team of Malaysian air crash investigators inspect the crash site of Malaysia Airlines Flight MH17, near the village of Hrabove (Grabovo), Donetsk region
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Malaysian experts check debris at the main crash site of the Boeing 777 Malaysia Airlines flight MH17, which crashed flying over the eastern Ukraine region, near Grabovo, some 100 km east from Donetsk
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Members of the Malaysia Special Disaster Assistance and Rescue Team, on hand to assist in the investigation into the crash of Malaysia Airlines flight MH17, wait near the gate of the Malyshev Factory, a state-owned producer of heavy machinery where a train transporting the victims was taken in Kharkiv, Ukraine
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Two black boxes recovered from the crash site of the MH17 jet being handed over to Malaysian officials during a press conference in Donetsk
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A Malaysian expert (L) examines a black box belonging to Malaysia Airlines flight MH17 during its handover from pro-Russian separatists, in Donetsk
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Aleksandr Borodai (C), self proclaimed Prime Minister of the self proclaimed 'Donetsk People's Republic', looks up after speaking at a news conference in which he he handed over the two black boxes of the crashed Malaysia Airlines flight MH17 to Colonel Mohamed Sakri (2-R) of the Malaysian National Security Council during a press conference organized in Donestk
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Donetsk People's Republic official (L) and Colonel Mohamed Sakri of the Malaysian National Security Council signing documents during the handing over to Malaysia of the two black boxes recovered from the crash site of the MH17 jet at a press conference in Donetsk
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Malaysian activist holds banners during a protest at the United Nations office in Kuala Lumpur, Malaysia
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Netherlands Foreign Minister Frans Timmermans speaks after a vote at the United Nations. With the backing of Russia, the UN Security Council unanimously condemned the downing of a Malaysian passenger jet and demanded crash site access in rebel-held east Ukraine. Timmermans who flew to New York to attend the Security Council session expressed outrage over the delays in securing the crash site
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A photo of Belgian national Benoit Chardome, one of the victims of the downed Malaysia Airlines jetliner, is seen during a ceremony in Berchem, Antwerp
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Mourners dressed in white leave flowers as they gather in remembrance of the owners of the Asian Glories restaurant, after they were killed in the Malaysia Airlines MH17 plane crash over eastern Ukraine, in Rotterdam, the Netherlands
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The Dutch government honors the victims of the MH17 plane crash in Ukraine with a full-page advertisement in Dutch newspapers, as seen here in Rijswijk, The Netherlands. The advertisement with the title 'Geschokt en verdrietig' (Shocked and sad) contains the 298 names of the victims
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A pair of clogs with a message for Dutch citizens killed on the Malaysia Airlines flight MH17 is seen in front of the Netherlands Embassy in Washington
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People surround a refrigerator wagon as monitors from the Organization for Security and Cooperation in Europe (OSCE) and members of a forensic team inspect the remains of victims from the downed Malaysia Airlines Flight MH17, at a railway station in the eastern Ukrainian town of Torez
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Monitors from the Organization for Security and Cooperation in Europe (OSCE) and members of a forensic team inspect a refrigerator wagon containing the remains of victims from the downed Malaysia Airlines Flight MH17, at a railway station in the eastern Ukrainian town of Torez
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Ukrainian President Petro Poroshenko (C) leaves the Netherlands embassy in Kiev after signing his condolences ceremony
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Pro-Russia rebels guard a train containing the bodies of victims of the Malaysia Airlines flight MH 17 crash in Torez, Ukraine
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Alexander Hug (L), Deputy Chief Monitor of the Organisation for Security and Cooperation in Europe (OSCE) Special Monitoring Mission to Ukraine, speaks to reporters after visiting a train containing the bodies of victims of the Malaysia Airlines flight MH17 crash in Torez, Ukraine
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Tirso Pabellon, brother of Irene Pabellon Gunawan, one of three Filipinos who perished in the Malaysia Airlines MH17 passenger plane crash over East Ukraine, leave the Department of Foreign Affairs after obtaining his passport at suburban Pasay city south of Manila, Philippines
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Bodies are removed from the site
AFP/Getty
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Members of the Ukrainian Emergencies Ministry gather the remains of victims at the crash site of Malaysia Airlines Flight MH17 near the village of Hrabove, Donetsk region
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Ukrainian workers handle debris at the main crash site of the Boeing 777 Malaysia Airlines flight MH17
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Mourners attend a memorial service held for a family of five killed in the flight MH17 disaster, in the suburb of Eynesbury in Melbourne, Australia
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Dutch King Willem-Alexander and Queen Maxima sign a condolence register at the Ministry of Safety and Justice in The Hague, the Netherlands
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Dutch Prime Minister Mark Rutte signs a condolence register at the Ministry of Safety and Justice in The Hague, The Netherlands
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Malaysian youth gathers during a candlelight vigil for passengers and crew of the Malaysian Airline crash flight MH17 in Petaling Jaya, Malaysia
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Journalists look at debris from the Boeing 777 Malaysia Arilines flight MH17
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Pro-Russian separatists block the way to the crash site of MH17, near the village of Grabove
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Local people roam the wreck of MH17
AFP
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Men carry a stretcher with a bodybag at the crash site
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A local resident stands among the wreckage at the site of the crash
Getty Images
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Passengers' belongings lie at the site of the crash
Getty Images
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Floral tributes are left at the gates of the Dutch Embassy in London and the Dutch flag flies half mast a day after a Malaysian airliner was brought down over Ukraine carrying over 170 Dutch passengers
REX
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A woman crosses herself as people lay flowers and light candles in front of the Embassy of the Netherlands in Kiev, to commemorate passengers of Malaysian Airlines flight MH17 carrying 295 people from Amsterdam to Kuala Lumpur which crashed in eastern Ukraine
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Personal belongings and luggage of passengers between debris of the Boeing 777, Malaysia Airlines flight MH17, which crashed during flying over the eastern Ukraine region near Donetsk
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Armed pro-Russian militants pass next to the wreckage of a Boeing 777, of Malaysia Airlines flight MH17 debris, which crashed during flight over the eastern Ukraine region near Donetsk
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Members of the Ukrainian Emergency Ministry search for bodies near the site of Thursday's Malaysia Airlines Boeing 777 plane crash near the settlement of Grabovo, in the Donetsk region
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People search for bodies at the site of the crash of a Malaysian airliner near the town of Shaktarsk, in rebel-held east Ukraine
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A diver searches for a black box on the site of the crash of a Malaysian airliner near the town of Shaktarsk, in rebel-held east Ukraine
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Rescuers stand on the site of the crash of a Malaysian airliner near the town of Shaktarsk, in rebel-held east Ukraine
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Debris is seen at the site of Malaysia Airlines Boeing 777 plane crash near the settlement of Grabovo, in the Donetsk region
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Belongings of passengers on the site of the crash of the Malaysia Airlines near the town of Shaktarsk, in rebel-held east Ukraine
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A woman grieves for victims of the Malaysia Airlines Boeing 777 crash as she arrives to lay flowers at the the Dutch embassy in Moscow, Russia
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Relatives of a passenger who was on board Malaysia Airlines flight MH17 from Amsterdam to Kuala Lumpur react over the news at Kuala Lumpur International Airport in Sepang
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Widi Yuliono a relative of John Paulisen, shows photographs of John Paulisen (Top-L), Yuli Hastini (Top-R), Arjuna Martin Paulisen (L) and Sri Paulisen (R) who are victims of the Malaysian Airline flight MH 17 plane disaster in eastern Ukraine, at his residence in Solo, Central Java, Indonesia
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People bring flowers and candles to the Dutch embassy to commemorate the victims of the Malaysia Airlines Boeing 777 plane crash in Kiev
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A young boy lights a candle in commemoration of the victims of Malaysia Airlines plane accident in eastern Ukraine in front of the Dutch embassy in Kiev
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A woman holding a sign that reads, "Putin is a murderer", lies down near flowers left by people to commemorate victims of the Malaysia Airlines Boeing 777 plane crash, at the Dutch embassy in Kiev
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A family member cries as she receives the news of the ill fated flight MH17 on the phone in Kuala Lumpur, Malaysia
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Family members of the crashed Malaysia Airlines flight MH17 cry at Kuala Lumpur International Airport in Sepang, Malaysia
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A firefighter sprays water to extinguish a fire, amongst the wreckages of the Malaysian airliner after it crashed, near the town of Shaktarsk, in rebel-held east Ukraine
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Flames and smoke amongst the wreckages of the Malaysian airliner near the town of Shaktarsk, in rebel-held east Ukraine
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A firefighter stands as flames burst amongst the wreckages of the Malaysian airliner near the town of Shaktarsk, in rebel-held east Ukraine
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Self-proclaimed Prime Minister of the pro-Russian separatist 'Donetsk People's Republic' Alexander Borodai (C) stands as he arrives on the site of the crash of a Malaysian airliner, near the town of Shaktarsk, in rebel-held east Ukraine
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Debris of the Boeing 777, Malaysia Arilines flight MH17, which crashed during flying over the eastern Ukraine region near Donetsk
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People walk amongst the debris, at the crash site of a passenger plane in Ukraine
AP
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The wreckages of the Malaysian airliner
Getty Images
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An armed pro-Russian separatist stands at a site of a Malaysia Airlines Boeing 777 plane crash in the settlement of Grabovo in the Donetsk region of Ukraine
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People stand near part of the wreckage of a Malaysia Airlines Boeing 777 plane near Grabovo
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Taken from an amateur video, smoke rises from a fireball seen in the distance shortly after a Malaysia Airlines passenger plane crash
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A man works at putting out a fire at the site of the plane crash in the settlement of Grabovo in the Donetsk region of Ukraine
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Smoke rises up at a crash site near the village of Grabovo
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Smoke rises from the wreckage at the crash site near the settlement of Grabovo in the Donetsk region of Ukraine
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A part of the wreckage of a Malaysia Airlines Boeing 777 plane is seen after it crashed near the settlement of Grabovo
Reuters
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Alleged image of smoke from the crash
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In a picture taken from a mobile phone smoke is seen rising from the crash site
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A general view of the crash site in the Grabovo settlement in the Donetsk region of Ukraine
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Emergencies Ministry members work at the site of a Malaysia Airlines Boeing 777 plane crash in the settlement of Grabovo in the Donetsk region
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Malaysia Airlines flight MH17 takes off from Schiphol airport near Amsterdam
EPA
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Outgoing Belgian vice prime minister and foreign minister Didier Reynders makes a statement on the crash
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The upper floor of Schiphol Airport is closed for media and reserved for family and relatives of Malaysia Airlines flight MH17
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A closed Malaysia Airlines counter at Schiphol airport near Amsterdam
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Airport security personnel look at the flight information board in the departure hall, at Kuala Lumpur International Airport, where flight MH17 was flying to
AP
At the same time, the Ukrainian President would agree not to apply to join Nato. In return, President Putin would not seek to block or interfere with Ukraine’s new trade relations with the European Union under a pact signed a few weeks ago.
Second, Ukraine would be offered a new long-term agreement with Russia’s Gazprom, the giant gas supplier, for future gas supplies and pricing. At present, there is no gas deal in place; Ukraine’s gas supplies are running low and are likely to run out before this winter, which would spell economic and social ruin for the country.
As part of the deal, Russia would compensate Ukraine with a billion-dollar financial package for the loss of the rent it used to pay for stationing its fleets in the Crimea and at the port of Sevastopol on the Black Sea until Crimea voted for independence in March.
However, these attempts by Ms Merkel to act as a broker between President Putin and Ukraine’s President, Petro Poroshenko, were put on the back-burner following the shooting down of the MH17 plane in eastern Ukraine.
But insiders who are party to the discussions said yesterday that the “German peace plan is still on the table and the only deal around. Negotiations have stalled because of the MH17 disaster but they are expected to restart once the investigation has taken place.”
Video: More pressure on Putin over Ukraine
“It is in everyone’s interests to do a deal. Hopefully, talks will be revived if a satisfactory outcome can be reached to investigations now taking place as to the causes of the MH17 catastrophe.”
Closer trading ties with the EU have been one of the big ambitions of Mr Poroshenko’s presidency. He has been a staunch supporter of the country’s pro-European movement even though he is unaffiliated to any political party. He was one of the backers of the 2004 Orange Revolution and served as Foreign Minister under Yulia Tymoshenko.
A spokesman for the Foreign and Commonwealth Office said they had no knowledge of such negotiations taking place. However, the spokesman said he thought it highly unlikely that either the US or UK would agree to recognising Russian control over Crimea. There was no one available at the German embassy’s press office yesterday.
Reaching a solution to the ongoing dispute is pertinent for the Germans as Russia is their single biggest trading partner. Under Ms Merkel, the Russo-German axis has strengthened significantly and, until the plane shooting, her government had been staunchly against punitive sanctions for commercial but also diplomatic reasons.
Ukraine crisis: Bridges blown up as rebels retreat
Ukraine crisis: Bridges blown up as rebels retreat
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People walk under a destroyed railroad bridge over a main road leading into the east Ukraine city of Donetsk
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A railway bridge, damaged during the night of 6-7 July, near the village of Novobakhmutivka, 30 km north of Donetsk
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A bus drives under the bridge which was blown up recently by Pro-Russian militants in the near of Donetsk
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A Ukrainian government soldiers guards wrecked tanks and armored personnel carriers (APCs) left by pro-Russian insurgents in the city of Slavyansk
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Mines lay near a destroyed pro-Russian APC near the city of Slovyansk
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A sign " Danger mines" is set at the check-point near Slavyansk on the road to Kramatorsk
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Smoke rises outside the outskirts of the eastern Ukrainian city of Donetsk. Retreating pro-Russian insurgents dug in on 7 July in Ukraine's sprawling industrial hub of Donetsk after government forces scored a string of morale-boosting victories in the bloody battle for the future of the country. The rebels erected checkpoints along the main roads leading into Donetsk while the center of the riverbank city itself saw several restaurants and shops shut their doors
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The facade of a building in the eastern Ukrainian city of Kramatorsk, destroyed after fightings between Ukrainian troops and pro-Russian militants
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A woman looks out from her damaged house in the city of Slovyansk
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Armed pro-Russian militants have an old Russian-made tank from the local WWII museum transported to near the Donbass-arena stadium in Donetsk. Reportedly the separatists intend to use it in possible fighting with the Ukrainian army. Ukrainian officials announced a total blockade of the two cities, after government forces took the separatist stronghold of Sloviansk and several other cities in the Donetsk region
Such strong trade ties between the two countries have also served to strengthen Ms Merkel’s hand and the Russian speaker has emerged as the leading advocate of closer relations between the EU and Russia. “This is Merkel’s deal. She has been dealing direct with President Putin on this. She needs to solve the dispute because it’s in no one’s interest to have tension in Ukraine or to have Russia out in the cold. No one wants another Cold War,” said one insider close to the negotiations.
Some of Germany’s biggest companies have big operations in Russia, which is now one of Europe’s biggest car markets, while many of its small to medium companies are also expanding into the country. Although Russia now provides EU countries with a third of their gas supplies through pipelines crossing Ukraine, Germany has its own bilateral gas pipeline direct to Russia making it less vulnerable than other European countries.
However, Russia is still the EU’s third-biggest trading partner with cross-border trade of $460bn (£272bn) last year, and the latest sanctions being introduced by the EU towards Russian individuals and banks will hurt European countries more than any other – particularly Germany, but also the City of London.
Central to the negotiations over any new gas deal with Gazprom is understood to be one of Ukraine’s wealthiest businessmen, the gas broker, Dmitry Firtash. Mr Firtash – who negotiated the first big gas deal between Ukraine and Russia between 2006 and 2009 – is now living in Vienna fighting extradition charges from the Americans. But he has close relations with the Russian and Ukrainian leaders – he supported Mr Poroschenko – and has been acting as a go-between behind the scenes at the highest levels.
