The leaders of Germany, France, Russia and Ukraine say a deal has been reached to end fighting in eastern Ukraine. The news came as Ukraine was offered a $40-billion lifeline by the International Monetary Fund to stave off financial collapse. David Pollard reports
Could this be the handshake that clinches peace in eastern Ukraine? Hopes are certainly higher after a marathon night of talks between President Petro Poroshenko - and Vladimir Putin. SOUNDBITE (Russian) RUSSIAN PRESIDENT, VLADIMIR PUTIN, SAYING: "First, we agreed on the end of fire from midnight on the 15th of February. Second, the position that I consider to be extremely important, is the removal of heavy weapons from the line of confrontation for the Ukrainian forces." Both leaders commented on the challenges of reaching a deal. SOUNDBITE (Ukrainian) UKRAINIAN PRESIDENT PETRO POROSHENKO, SAYING: "I can say that everything was difficult, and in fact various unacceptable conditions were put to us - conditions of retreat, of surrender. We did not succumb to a single ultimatum and clearly defended our position that a ceasefire be announced without any preliminary conditions." The recent surge in violence had added urgency to the peace talks - even more so with Washington openly talking of arming Ukraine. Wednesday saw some of the worst fighting so far. But the night also delivered more good news for Kiev. An agreement in principle on a 17 billion dollar economic lifeline from the IMF. Ukraine is on the brink of bankruptcy - and will have to submit to a stringent reforms to get the money. Though there is the prospect of even more to come from the international community, according to IMF boss, Christine Lagarde. SOUNDBITE (English) IMF MANAGING DIRECTOR, CHRISTINE LAGARDE, SAYING: "All that package over a period of four years is in the range of 40 billion dollars." Frankfurt's DAX gained over a percent on the news. Hoping the talks might persuade the EU to ease sanctions against Moscow. An estimated 17 per cent of German exports go to Russia. But events in Ukraine have persistently wrong-footed markets. There's still a case for caution, says NAB head of strategy, Nick Parsons. SOUNDBITE (English) NICK PARSONS. HEAD OF MARKETS STRATEGY, EUROPE, NAB. SAYING: ''It's against that background that international investors, who have got no superior knowledge themselves, have been so confused, caught out and frankly, put off by the entire situation. So we just wonder. We're just going to have to wait and see.'' The peace talks will doubtless be hailed as a breakthrough by their brokers. Francois Hollande and Angela Merkel departed Minsk en route for an EU summit in Brussels. Where EU leaders now have to decide whether to soften their stance on Russia. Or whether it's simply too early to tell.