Maybe May ceasefire
Putin proposes a three-day ceasefire for Victory Day
Hello from the Bear Market Brief.
This week in the news:
President Putin proposed a three-day ceasefire from May 8-11 to coincide with Russia’s Victory Day celebrations.
The U.S. and Ukraine signed the long-awaited critical minerals agreement, creating the “United States-Ukraine Reconstruction Investment Fund.”
Putin and Belarusian President Alexander Lukashenko visited Volgograd for a patriotic forum titled “Great Heritage—Common Future.”
— Sara Ashbaugh, Editor in Chief
Putin’s “May ceasefire” and the retaking of Kursk
In preparation for the “Victory Day” parade in Moscow on May 9, President Vladimir Putin announced a three-day ceasefire on April 28 to coincide with the holiday, urging Ukraine to follow suit and threatening further attacks if it does not. In response, Ukrainian President Volodymyr Zelenskyy called the Russian proposal disingenuous and added that the Kremlin could stop its attacks on Ukraine even sooner if it cared about peace.
The Kremlin likely has two reasons to propose the temporary ceasefire. First, as Zelenskyy remarked, Putin likely wants relative quiet for the Victory Day parade. Chinese President Xi Jinping, Brazilian President Luiz Inacio Lula da Silva, and Slovakian Prime Minister Robert Fico are scheduled to attend, among others—a sign of easing international isolation, which Moscow is keen to highlight. The second reason is likely the Trump administration’s warning last week that the U.S. government might “move on” from the issue of Ukraine, also abandoning its attempts to broker a deal with Russia on the full normalization of relations, which is Russia’s main goal. On May 2, State Department spokesperson Tammy Bruce said that U.S. officials would no longer “fly around the world” to facilitate negotiations. The ceasefire proposal serves the purpose of signaling to the U.S. government that Russia is interested in continuing the talks. Additionally, the Kremlin likely believes that dragging out the process will also allow Russia to extract more concessions from the Trump administration and take the Russian army closer to achieving its war goals in Ukraine, where it currently holds the better position.
Negotiations nonetheless continue. Apart from a key agreement between the U.S. and Ukraine on Ukraine’s minerals (see below), Ukrainian and EU governments also presented the U.S. with a peace proposal that significantly differs from earlier American suggestions. The most important difference is that, under the EU-Ukraine joint proposal, Ukraine would receive security guarantees similar to NATO’s Article 5 (guaranteed by the U.S.), even as the country’s NATO membership remains off the table. The absence of any such guarantee has been one of the main obstacles so far in reaching any substantial progress in the peace process, and, as The Times reported, the capabilities of EU countries to put together even a relatively limited peacekeeping force is questionable. The EU-Ukraine proposal, on the other hand, does not discuss the status of Crimea, which U.S. President Donald Trump suggested Ukraine should cede to Russia and is likely going to be a core Russian demand for any peace deal. Perhaps even more crucially, the EU-Ukraine proposal urges the U.S. to ease sanctions on Russia only after substantial progress has been reached in the peace process, thus trying to prevent the decoupling of negotiations on U.S.-Russia economic cooperation from the peace talks.
Also in time for the “Victory Day” parade, Putin announced that the Russian military has pushed Ukrainian troops out of the Kursk Region, where Ukraine has conducted an incursion since August 2024. The Kremlin also openly acknowledged what had been known from reporting, that North Korean troops took part in the fighting in the region (as did the North Korean government). Ukraine has so far denied that Russia regained full control of its border region. The announcement was symbolically important for Putin before May 9, because it allows the Russian President to report a positive development for Russia before the holiday. However, the Kremlin still has not scheduled Putin’s yearly address to the two houses of the Russian parliament. This address was postponed after talks between the Trump administration and the Kremlin began, and the Russian leader likely wants to report substantial progress on the issue of sanctions.
— Andras Toth-Czifra
President Trump and President Zelenskyy met for a brief discussion on the sidelines of Pope Francis’s funeral last Saturday. Zelenskyy’s team published photos of the pair talking quietly in St. Peter’s Basilica shortly before the funeral began. According to Zelenskyy, they discussed a possible “full and unconditional ceasefire” and “reliable and lasting peace.” A White House spokesperson described the meeting as “very productive.” This was the first face-to-face meeting between the two leaders since the disastrous White House press conference in February, which devolved into a heated argument between Trump, Zelenskyy, and Vice President JD Vance. (photo: Ukrainian Presidential Press Office / AP)
U.S. and Ukraine sign minerals deal
After months of back and forth negotiations, the U.S. and Ukraine have finally signed the long-awaited critical minerals deal. Under the deal, the two countries will create a joint investment fund into Ukraine’s mineral resources to help finance reconstruction efforts. An earlier draft of the agreement was planned to be signed in February during President Zelenskyy’s visit to Washington. However, a public spat in the Oval Office resulted in Zelenskyy being asked to leave without finalizing the agreement.
The U.S. Treasury Department announced the deal in a press release this week, reporting the establishment of the “United States-Ukraine Reconstruction Investment Fund.” “This agreement signals clearly to Russia that the Trump administration is committed to a peace process centered on a free, sovereign, and prosperous Ukraine over the long term,” U.S. Treasury Secretary Scott Bessent said. Ukrainian Economy Minister Yulia Svyrydenko visited Washington on Wednesday to sign the deal, posting on X that the fund will “attract global investment into our country.” According to Ukrainian estimates, the country contains 5% of the world’s total “critical raw minerals,” including graphite, titanium, lithium, beryllium, and uranium. There are also deposits of copper, lead, zinc, silver, nickel, cobalt, manganese, and rare earth metals in Ukraine.
The full text of the agreement, released by the Ukrainian government, contains no explicit security guarantees for Ukraine—something that President Zelenskyy repeatedly sought in the negotiation process. Instead, Trump has insisted that U.S. investment into Ukraine is a sufficient deterrent for Russian aggression. Meanwhile, the Trump administration has asked Ukraine to repay the U.S. for its aid, an idea that Zelenskyy soundly rejected. The newest version of the deal meets in the middle, allowing the U.S. to invest in Ukraine’s critical minerals without Ukraine needing to repay the U.S. or relinquish control of its subsoil, infrastructure, or natural resources. According to Ukrainian Prime Minister Denys Shmyhal, both Ukraine and the U.S. will contribute to the fund, but profits will be reinvested exclusively into Ukraine for the first 10 years. Additionally, the U.S. has agreed to help attract further investments and technology for Ukrainian projects. The two countries will have equal voting rights, and there are no obligations for Ukraine to pay back previous U.S. assistance. Any future U.S. military aid may count as a contribution to the fund, however. Zelenskyy called the latest version of the deal “truly equal,” offering benefits for both sides. “There is no debt in the deal, and a fund—a recovery fund—will be created that will invest in Ukraine and earn money here,” he said. Additionally, no entity that financed Russia’s war efforts will be allowed to benefit from the reconstruction fund, the Treasury Department notes.
The deal still needs to be ratified by the Ukrainian parliament before it can take effect.
— Sara Ashbaugh
President Putin and Belarusian President Alexander Lukashenko arrived in Volgograd on Tuesday for a joint forum dedicated to the 80th anniversary of Soviet victory in World War II. The pair started their visit at the Stalingrad memorial complex on Mamayev Kurgan, where they laid flowers at the grave of Vasily Chuikov, a Soviet military general and marshal. Behind them towers “The Motherland Calls!,” an 85-meter sculpture erected in 1967 to honor the fallen in the Battle of Stalingrad. Putin and Lukashenko also laid wreaths at the complex’s Eternal Flame before heading to the plenary session of the forum, titled “Great Heritage—Common Future.” (photo: Andrei Gordeyev / Vedomosti)
Chummy in Volgograd
Belarus’s de facto leader Alexander Lukashenko and Vladimir Putin met in Volgograd (previously known as Stalingrad) this week to discuss relations between the two countries. Talks took place in the framework of the “Union State,” a series of vaguely-worded cooperation and integration agreements signed in 1996. This time, the two leaders took part in a “patriotic forum” entitled “Great Heritage—Common Future,” to which delegates from “friendly states” were also invited. Discussions mostly revolved around the reinforcing and the spreading of Russia’s preferred interpretation of World War II, as well as efforts to build a “multipolar world order.”
Since Lukashenko’s likely defeat in Belarus’s 2020 presidential election, the results of which the Belarusian authorities then falsified, the relationship between the two authoritarian leaders has become closer. Belarus provided operational help to Russia’s full-scale invasion of Ukraine and later signed a formal military pact in 2024, placing Belarus under Russia’s nuclear umbrella. However, the eventual merger of the two countries has remained only a distant and unlikely possibility. Lukashenko said that ties between the two countries should be “even closer than in a unitary state,” signaling also that there are still no plans to integrate the two countries further. He and Putin, however, voiced support for the recently announced construction of an aircraft manufacturing plant in Belarus to produce drones—likely to further support Russia’s war efforts in Ukraine. The plant, which is supposed to manufacture 100,000 drones per year, will ostensibly source all the main components from Belarus, further sweetening the agreement for the Belarusian side.
The meeting between Putin and Lukashenko took place amidst heavy security measures. Local media reported internet outages, road closures, and the authorities forcing local students to salute the two leaders.
— Andras Toth-Czifra
On the podcast
The weeks after Donald Trump and Volodymyr Zelenskyy’s Oval Office clash have precipitated drastic shifts in transatlantic relations and the potential trajectory of Russia’s war in Ukraine. Now a possible ceasefire is on the horizon.
This week on the Bear Market Brief podcast, host Aaron Schwartzbaum and Maximilian Hess make sense of the Oval Office blow-up and discuss President Trump’s strategic aims, Russia’s goals, Europe’s response, the U.S.-Ukraine minerals deal, and what might come next with Russian sanctions.
Quickfire: Regions
Local deputies may once again postpone the selection of the mayor of Kurgan, a regional center southwest of the Ural Mountains, or call off the process altogether. The city has not been able to select a mayor since January 2024, when its previous head, Elena Sitnikova, resigned. Three selection processes have been held without a final vote—the latest of which took place in April—as candidates either withdrew or reportedly did not receive a seal of approval from the regional government or the security services. Former regional official Anton Naumenko, who was one of the two candidates selected in the latest process, has been acting mayor for more than a year. As Meduza special correspondent Andrey Pertsev noted in a recent article, mayoral appointments have become increasingly problematic over the past years, as city heads have lost their privileges and powers and have often become targets of criminal prosecution by the regional security establishment. Russia’s recently adopted municipal reform will further increase the influence of the regional government over municipal heads and de facto formalize the already existing practice in which governors appoint members of their team to lead major cities in their region.
Residents and officials of several districts in the Krasnoyarsk Territory criticized the hasty adoption (in the first reading) of the region’s reform of municipal governments. The reform follows the principles of the recently adopted federal municipal reform, but, before its official launch in June, it would fold 472 municipalities in the region into 39 municipal districts. The regional government did not consult municipal authorities “in order not to delay the process.” Protesters—including war participants who have previously criticized similar reforms in other regions—bemoaned the likely loss of access to government services. While the two biggest parties of the systemic opposition, the Communist Party and the Liberal Democratic Party, supported protesters, two district heads belonging to United Russia (as well as the mayor of Dudinka, a northern port town) resigned. A compromise adopted in the framework of the federal reform allowed some regions to preserve the existing two-tier system of local governance. The governor of the Voronezh Region, one of those that opted to do so, justified the decision this week by claiming that it was rural officials who alerted higher-level authorities of the progress of Yevgeny Prigozhin’s mutiny in 2023, which passed through his region.
In addition to the recent resurrection of the idea of an industrial cluster to mine and process rare earth minerals in Siberia, Russia’s Ministry of Natural Resources is also preparing a program to explore critically important minerals—including tungsten, graphite, lithium, and uranium—in the Russian-occupied territories of Ukraine. A considerable part of Ukraine’s known metal, rare earth, titanium, and zirconium deposits are in areas under or close to Russian occupation. The potential development of these deposits also came up in the context of the talks on Russia-U.S. economic cooperation earlier this year. Russia has also been actively developing railway tracks in the occupied territories, both to transfer military equipment to and resources from the regions, focusing, for the time being, on repairing existing tracks.
— Andras Toth-Czifra