(Bloomberg) -- The U.S. repeated its intention to impose “swift, severe costs” on Russia if the Kremlin takes any aggressive acts, as Germany and France pushed a lagging diplomatic effort to restore peace in eastern Ukraine. President Joe Biden said conditions in the region could “go crazy quickly.” 

Russia and Belarus have started their largest joint military exercises in years, to last until Feb. 20. The maneuvers are happening near Ukraine’s border as well as those of NATO members Poland and Lithuania. 

Moscow has repeatedly denied it plans an attack on Ukraine after the U.S. and NATO warned a buildup of almost 130,000 troops near the Ukrainian border may be preparation for an invasion as soon as this month. 

The Kremlin accuses the West of trying to undermine Russia’s security by drawing Ukraine closer to the North Atlantic Treaty Organization. 

Key Developments

  • Russia Starts Major Military Drills in Belarus as NATO Watches
  • Russia and Europe Are Vital to Each Other When It Comes to Oil
  • What we know so far about potential U.S.-EU sanctions on Russia
  • Where Military Forces Are Assembling Around Russia and Ukraine

All times CET.

Russia Duma Mulls Appeal To Recognize Donbas Separatists (6:53 a.m.) 

The lower house of Russia’s parliament will start talks on a proposal to formally recognize separatist authorities in Ukraine’s Donbas, a move that, if approved, could hamper peace efforts and fuel tensions.

Speaker Vyacheslav Volodin said the State Duma’s council will decide Monday how to proceed with a proposal made in January to vote on an appeal to President Vladimir Putin to recognize the so-called People’s Republics in Donetsk and Luhansk.

Russia has supported the breakaway quasi-states militarily and financially since their formation in 2014, though officially it denies that and backs a peace plan that calls for their reintegration into Ukraine. Recognition could complicate efforts to implement that pact and potentially pave the way for Moscow to openly supply more weapons to the republics, something the ruling party has already proposed. The timeline for any possible moves toward recognition remains unclear. 

Talks in Berlin Fail to Reach Accord, May Resume (12:45 a.m.) 

Talks intended to revive the 2015 Minsk accord to end the conflict in eastern Ukraine ended Thursday after more than nine hours with no report of progress, but a Ukrainian official said they could restart “soon.” 

Diplomats close to the talks said the next meeting would be in March. Russia and Ukraine accuse each other of failing to adhere to the 2015 agreement to halt fighting in Ukraine’s Donbas region. 

Dmitry Kozak, an aide to Russian President Vladimir Putin, told reporters in Berlin that “we deeply regret” the current situation remaining in a “stalemate.”  

Biden Says ‘Things Could Go Crazy Quickly’ (12:10 a.m.)

President Joe Biden urged U.S. citizens to leave Ukraine “now,” saying “things could go crazy quickly.”

In an excerpt from an NBC interview, Biden was asked Biden under what circumstance might he send U.S. troops into Ukraine to help Americans trying to flee: “That’s a world war, when Americans and Russia start shooting at one another.” 

The State Department on Thursday cautioned against travel to the country because of “the increased threats of Russian military action and Covid-19; those in Ukraine should depart now via commercial or private means.”  

Ukraine Has Lost Estimated $280 Billion in Conflict With Russia (7 p.m.)

The former Soviet republic’s continuing conflict with Russia has cost the nation $280 billion in lost gross domestic product since 2014, according to a report by the London-based Centre for Economics and Business Research. Russia’s annexation of Crimea eight years ago alone cost Ukraine as much as $8.3 billion annually, the research shows.

“Through a combination of a major loss of assets, diminished tax revenue, and a significant knock to the confidence in Ukraine’s economy, this has caused severe economic damage, directly affecting the lives of Ukrainians. Ukraine’s losses will have continued to mount since then,” Douglas McWilliams, CEBR’S deputy chairman, said in the report.

Putin Says Russia Still Working on Replies to U.S., NATO (4:14 p.m.)

Russia is still working on its replies to the U.S. and NATO on proposals for security that Washington and its allies delivered to Moscow on Jan. 26, President Vladimir Putin said. 

“As for further talks with our European and American partners, they’re continuing both in open and closed formats,” he told reporters at the Kremlin. 

Putin has said the U.S. responses ignored Russia’s main demands for sweeping security guarantees but included what he called secondary elements that could be the basis for future talks.

Biden May Hold Call With Other NATO Leaders On Friday (12:40 p.m.)

President Joe Biden is planning to hold a call with the leaders of the U.K., Germany, France, Italy, Poland, Canada, the European Union and NATO on Friday to discuss Russia’s troop build up near Ukraine, said multiple people familiar with the matter. There was no immediate comment from the White House.

The so-called Quint group -- U.S., Germany, France, Italy and the U.K. -- have convened numerous times recently at different levels, and at times with counterparts from Poland, Canada, the EU and NATO. 

©2022 Bloomberg L.P.