In an interview with German television broadcast late yesterday, Putin said he was convinced that it was possible to end the deadlock in east Ukraine, where pro-Russian rebels have been battling Kiev's troops in a conflict that has claimed at least 4,000 lives since March.
But the Russian leader also noted that neither the rebels nor Ukrainian troops have fully withdrawn from key locations in the region in order to create a buffer zone, a key part of a truce deal agreed to in September.
Since Ukraine's pro-Russian president was ousted from power last February, Moscow has often referred to the new, Western-leaning government as a "junta" brought to power by an unconstitutional coup. Putin spoke more diplomatically yesterday, saying he believed Ukraine "is a big European country with a European culture."
But he also lashed out against far-right nationalist elements in Ukraine and against what Moscow perceives as the repression of Russian-speakers in the region.
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In response to a question about whether Russia was arming the rebels, as contended by both Kiev and the West, Putin said merely that "anyone waging a fight that they believe fair will find weapons."
He stressed that without such arms the rebels would be quickly destroyed by the Ukrainian forces, something Russia "does not want, and will not allow." While Putin stopped short of acknowledging Russia's material role in the conflict, his comments went further in emphasising Moscow's willingness to support the separatists than ever before.
Merkel spoke out against a political system dominated by "spheres of influence, which spurn international law," and warned that regional conflicts like the one raging in east Ukraine "can very quickly broaden to major fires."
But in Brussels, the European Union's foreign affairs chief said more sanctions against Russia would not help end the east Ukraine crisis.