The efforts to bring the war in Ukraine to an end have stalled in the face of an escalating exchange of drone and missiles and the stalemated EU efforts to mediate.

Diplomatically, both sides insist they remain open to negotiations. Militarily, however, they are escalating the conflict with mutual drone and missile strikes that make those negotiations impossible.

The talks remain stuck at the same place. Russian President Vladimir Putin said again in staged comments during a trip to the regions that he “remains open to talks” but only “on the same terms as we mentioned before”. Ie he is still insisting that Bankova give up control over the parts of Donbas that the Armed Forces of Russia (AFR) does not already occupy.

The two camps remain at logger heads, as detailed in an op-ed penned by Russia’s veteran Foreign Minister Sergei Lavrov that was supposed to be published in Politico this week but was pulled at the last minute.

In the article, reposted by IntelliNews from the Russian Ministry of Foreign Affairs website here, Lavrov repeated that the Kremlin was willing to negotiate, even with the EU, but only if Kyiv was willing to address the “root causes” of the war. That is code for a no-Nato guarantee, security guarantees for Russia, religious and language rights, and ceding land in Donbas. Zelenskiy has made it equally clear these are red lines that Bankova will not cross. He also explicitly ruled out a ceasefire, arguing that simply freezing the conflict will only postpone another war.

In the meantime, Kyiv is hyping the slow progress that the AFR is making, and the international press has got behind Ukraine saying the war has reached a “turning point” and suggesting that Russia is “losing the war” again.

As IntelliNews columnist Leonid Ragozin pointed out in a column this week, that is wishful thinking. We have been here before. Any Russian setback is interpreted as a Russian collapse. And reports from the battlefield paint a far darker picture than the charts plotting Russia’s territorial gains or death toll suggest. Russian troops have infiltrated the strategic city of Kostyantynivka in eastern Ukraine and are now trying to surround it, the BBC reports. Kostyantynivka is a gateway to the rest of the Donbas region and threatens Ukraine’s remaining strongholds in the east, the cities of Kramatorsk and Sloviansk. If all three of these cities fall to the AFR then Donbas is lost. While the Kremlin is clearly under pressure, both militarily and economically, it is nowhere near collapse, as detailed in the latest Kyiv School of Economics (KSE) Russian chartbook for May.

Putin’s plan appears to be to wait for Ukraine to capitulate on the Kremlin’s terms and in the meantime keep grinding away in the Donbas if it doesn’t. He seems supremely confident that the AFR can take the rest of the region eventually and is willing to spend what he needs in money and manpower until he achieves that result.

In the meantime, the war is stalemated, punctuated by contradictory signals. Rhetorically, both leaders say they are open to talks and maybe even a meeting. In practice, neither is willing to back down. Yuri Ushakov, Putin’s top foreign policy advisor, said this week that the Kremlin is not waiting for talks; it is waiting for a military victory in the Donbas.

Zelenskiy is likewise talking peace but at the same time launching the deepest strikes yet into Russian territory. The target list has also been expanded from military industrial targets to emotive symbolism like the massive barrage on Moscow last week. The EU is caught in the same dichotomy. At the E3 London summit on June 8, the three leaders of France, Germany and the UK called for negotiations with a five-point list of demands, but at the same time signed off on agreements to supply Ukraine with more arms and long-range missiles that can hit targets deep inside Russia, as Lavrov pointed out at the time. Lavrov is ruling out talks with the E3 as it is not a mediator in the war, but a participant.

A lot of progress towards a ceasefire was made at the end of last year, culminating in the Moscow meeting on December 3 when a 27-point peace plan (27PPP) was issued that Putin said was “largely acceptable” to the Kremlin as it was based on his agreements with US President Donald Trump at the Alaska summit on August 15. That work has been abandoned now and the White House withdrawn from the process.

The E3 has taken up the baton, but its position has been immediately weakened by UK Prime Minister Keir Starmer to resign on June 22. Both German Chancellor Friedrich Merz and French President Emmanuel Macron are equally lame duck leaders. Merz is currently the most unpopular chancellor ever and facing a rising challenge from the AfD (Alternative für Deutschland), now the most popular party in Germany and about to take control of its first region in autumn local elections. The long held principle of the Brandmauer – keeping the far right out of power by refusing to form coalitions with it – could well break down as the economy continues to tank.

Macron’s term expires next year and will almost certainly be replaced by the right-wing National Rally party. Both AfD and National Rally are sympathetic to the Kremlin and will almost certainly cut support for Ukraine. The ardour for supporting Ukraine amongst most of the new governments in Central Europe has already significantly cooled. In parallel disunity in the EU has been growing, scuppering the effort to find its own representative for talks with the Kremlin.

With no diplomatic road out of the military imbroglio, Bankova has escalated its drone attacks in an attempt to bring the war into the homes of Russian. And it is working – to an extent. The attacks on refineries have led to a growing fuel crisis, spiking prices and widespread fuel rationing, even in the capital.

But time is running out for Ukraine. Putin is likely to wait for winter and resume his attempt to freeze Ukraine into submission. Last winter’s campaign targeted Ukraine' s power sector, reducing the generating capacity from just under 60GW pre-war to 10GW now – leaving an 18GW deficit covered by rolling blackouts and imports from the EU. This summer, technicians are rushing to repair as much of the damage as they can, but Russia retains a crushing superiority in missiles.

The western press is finally waking up to this major military imbalance, for example with this feature in the NYT last week, pointing out that while Ukraine has long distance drones, their payload is far too small to do anything more than superficial damage, whereas Russia is churning out powerful cruise and ballistic missiles by the dozen everyday.

In addition, Russia currently drops an estimated 1,400 to 1,750 glide bombs (including the cheap but powerful modified WWII-era FAB glide bombs) per week. The latest version of the Geran-5 drones and jet powered glide bombs both fly too fast for Ukraine’s new interceptor drones to bring down. And Ukraine has all but run out of Patriot Pac-3 interceptor missiles after the US burnt through its stocks during the Gulf war. According to one report, Ukraine had only 16 interceptors left earlier this year. Ukraine’s skies will be wide open again this winter.

Ukraine is currently fighting a largely political war. The attacks on St Petersburg on the opening day of this year’s St Petersburg International Economic Forum (SPIEF) and the attacks on Moscow as the G20 assembled in Russia, were both psychological, intended to show Russia’s vulnerability to Ukrainian strikes, rather than bring any military strategic advantage. Russia is resorting to the same tactics, such as its recent bombing of the UNESCO-listed Pechersk Lavra monastery complex in Kyiv.

As KSE reported, Bankova can inflict real economic damage, and as political analyst Mark Galeotti reports there is a growing tension between the hawks and doves in the Kremlin, but as everyone also agrees neither of these things is enough to sway Putin’s commitment to continuing the war.

Conversely, with its missiles, Russia is still in a position to bring Ukraine’s economy to its knees and Zelenskiy is also under increasing pressure from a domestic political crisis, a mediatising corruption scandal, and looming funding problems after the EU cut its allocation for Ukraine in its latest Multiannual Financial Framework (MFF) budget. In the short-term, the recently €90bn EU loan will keep the Armed Forces of Ukraine (AFU) in the field for this year and half of next year, but another €45bn needs to be found from G7 partners to get to the end of 2027, according to Ukraine’s draft budget plans. In reality even that may not be enough; Zelenskiy this month there is already a €20bn shortfall in this year’s budget.

Putin’s popularity has fallen, but Zelenskiy’s has fallen further. Corruption has overtaken the war as the leading concern of ordinary Ukraine’s according to the most recent polls. Russia’s economy is hurting, but the EU’s economy is hurting more. As Iuliia Mendel, Zelenskiy’s former press secretary, points out, with no clear war goals left, continuing the conflict is pointless and will only inflict more damage on Ukraine’s demographics, which are already the worst demographics in the world. Ukraine’s population has already been almost cut in half, and half of those left in the country are pensioners.

The growing pain of both the military and economic war has led to talk of using tactical nuclear missiles again. Putin himself has adopted a more nuanced public position. Speaking after the recent attacks, he rejected suggestions of direct retaliation beyond conventional means and avoided the nuclear rhetoric that many observers had feared. At the same time, he made clear that he saw the strikes as incompatible with Zelensky's calls for direct negotiations highlighting the stalemate that exists in the peace process.

"They keep talking about it: 'We want personal meetings, we want a personal meeting.' So what? Then, three days later, a strike on [the student town of] Starobilsk. How are we supposed to interpret that?" Putin asked journalists.

The Russian president nevertheless insisted that Moscow remained willing to negotiate as neither side wants to be seen as a warmonger.

"Russia is ready to resume negotiations," he said, though only on terms that remain largely unchanged from his previous positions.

Both sides increasingly acknowledge that a negotiated settlement will eventually be necessary. Neither side appears willing to create the conditions that would make such negotiations possible.