Rally in the European markets with a view to the Ukraine-Russia negotiations

European stocks rallied on Wednesday as investors turned their attention to the diplomatic crisis in Ukraine, with talks described as difficult but leaving little room for optimism.

The Kremlin announced today that a “demilitarized” Ukraine with its own army, such as the example of Austria or Sweden, is being considered in the context of a possible compromise.

“This is an option that is being discussed at the moment and could be considered a compromise,” Kremlin spokesman Dmitry Peshkov was quoted as saying by RIA Novosti. Peshkov’s reference to demilitarization appears to be linked to a neutral regime for Ukraine outside NATO. It is noted that Austria and Sweden are not members of NATO, while they belong to the EU.

For its part, Ukraine reiterated that “full security guarantees” are needed against Russia, while rejecting the idea of ​​implementing an “Austrian or Swedish” model of “neutrality”, the Ukrainian presidency announced today.

“Ukraine is currently in a state of direct war with Russia. Consequently, the model can only be ‘Ukrainian’,” said Mikhail Pontoliak, one of the Ukrainian negotiators.

Earlier in the day, Russian negotiator Vladimir Medinsky said the talks were “difficult and slow” and stressed Moscow’s desire for peace. “Of course, we would all like to go much faster, this is the sincere wish of the Russian side as well. We want to reach peace as soon as possible,” he said.

On the board, the pan-European index Stoxx Europe 600 jumps 2.7% to 447.16 points.

The German DAX gained 3.3% to 14,375.73 points, the French CAC 40 gained 3.6% to 6,584.66 points, while the British FTSE 100 gained 1.3% to 7,269.70 points.

In the region, the Italian FTSE MIB strengthened by 3.2%, while the Spanish IBEX 35 gained 2.3%.

Investors are also waiting for the Federal Reserve monetary policy decisions this afternoon. Analysts expect US interest rates to rise by 25 basis points – the first rate hike since 2018 – as huge geopolitical uncertainty leaves no room for the central bank to make bolder moves to curb the fastest inflation in 40 years.