Ukraine at critical moment, European leaders say after Trump call

UK Prime Minister Keir Starmer, French President Emmanuel Macron and German Chancellor Friedrich Merz said a joint call with US President Donald Trump marked a "critical moment" and that intensive work will continue on a US-led peace plan to end the Russia-Ukraine war; the leaders welcomed ongoing negotiations even as key issues remain unresolved. A central sticking point is Ukrainian territory—Moscow currently controls about 20% of Ukraine—and Trump has publicly pressed Kyiv to concede land, while a leaked US draft of 28 points was seen as favouring Russia; Kyiv is seeking changes, demanding an immediate ceasefire and strong security guarantees as President Zelensky tours Europe. European governments are coordinating closely and insist decisions must be made by Ukraine, but the Kremlin has signaled alignment with Trump’s positions and Russian forces continue gradual advances, raising the risk that a US-driven deal could leave Ukraine exposed if Kyiv’s core demands are not met.

Analysis

UK Prime Minister Keir Starmer, French President Emmanuel Macron and German Chancellor Friedrich Merz held a 45-minute joint call with US President Donald Trump and described the moment as “critical,” saying intensive work will continue on a US-led peace plan to end the Russia-Ukraine war. The original US draft peace plan leaked last month had 28 points and was seen as favouring Russia; President Zelensky is preparing a 20-point document to hand to the US after separate talks with US and European negotiators aimed at altering territorial and security clauses.

A central unresolved issue is territory: Moscow currently controls about 20% of Ukraine and Trump has publicly pressed Kyiv to cede land, while Kyiv insists on an immediate ceasefire and iron-clad security guarantees; European leaders state decisions must be made by Ukraine. The Kremlin signalled alignment with aspects of Trump’s statements per spokesman Dmitry Peskov, Putin reiterated no compromise on Donbas, and Russian forces continue a slow advance in south-eastern Ukraine despite heavy casualties.

Market signals show moderately negative sentiment and elevated uncertainty (overall sentiment score -0.5, KYIV -0.7) implying headline-driven volatility ahead. The most immediate investor-relevant catalysts are negotiation milestones (the 20-point submission, any US shift toward Moscow, or visible concessions by Kyiv) which could materially reprice regional risk premia and defense-related exposures.

Key Decisions for Investors

• Reduce or avoid direct exposure to Ukraine-listed assets and Eastern European credits given the pronounced negative sentiment on KYIV (-0.7) and elevated political risk
• Deploy short-duration volatility hedges on Europe-exposed equities and buy downside protection ahead of key negotiation milestones such as the 20-point submission or any public US policy shift
• Monitor diplomatic signals and military developments closely and be prepared to reallocate into defense suppliers or sovereign/hard-currency safe havens if talks fail and Russian advances continue, or to trim such exposures if a credible ceasefire with enforceable security guarantees becomes likely