Poroshenko Says to Meet Putin, Merkel, Hollande, Announces Death of 3 Troops in Donetsk

Ukraine's Western-backed leader Petro Poroshenko promised Monday to meet Russia's Vladimir Putin and involve U.S. President Barack Obama in his stalled push for peace with pro-Kremlin fighters in the separatist east.

The surprise announcement came days after the first direct peace talks with the rebels in three months broke down without any evident progress after just one acrimonious round.

The billionaire chocolate maker -- elected in the wake of the February ouster of an unpopular Moscow-backed president -- is waging a two-front campaign to save the former Soviet Union's second largest republic from disintegration and economic collapse.

His bid to fend off bankruptcy was boosted on Monday by parliament's passage of an austerity budget that eases the tax burden on small businesses and should help unlock delayed loans from the International Monetary Fund.

His efforts to resolve the eight month war that has brought Ukraine to economic ruin will see him meet Putin for the first time since the two briefly shook hands on the sidelines of an October summit in Milan.

Poroshenko said his January 15 talks with Putin in the Kazakh capital Astana will also involve German Chancellor Angela Merkel and French President Francois Hollande.

Washington has allowed Merkel to play the lead in seemingly futile attempts to prompt Putin to adopt a more conciliatory approach to Ukraine's pro-Western aspirations and to rein in the rebel militias.

But Poroshenko made it clear on Monday that he wants the White House more involved.

"We are anticipating a return to the Geneva format that includes U.S. President Barack Obama, with whom I discussed this issue, and the new EU leaders -- Jean-Claude Juncker and Donald Tusk," Poroshenko told an end-of-year press conference.

"They expressed a readiness to take part in the Ukrainian peace negotiations."

There was no immediate response to Poroshenko's comments from either Washington or Brussels.

Last week's meeting with insurgents in the Belarussian capital Minsk was meant to bring into effect a September 5 ceasefire and political settlement plan that never took hold.

Some 1,300 people have died since that plan was signed, bringing the toll to more than 4,700 -- a figure U.N. officials fears is too conservative because of the limited access to rebel-held areas.

However, Poroshenko's hopes of getting a new comprehensive agreement signed in Minsk last Friday ended in failure after rebels attempted to win new financial and land concessions.

"Ukraine will never -- and we are supported in this by the entire world -- allow the (original September) Minsk agreements to altered," Poroshenko insisted on Monday.

As talks stuttered, fighting resumed around the disputed airport near rebel-held Donetsk. Poroshenko said three soldiers were killed there on Monday.

Poroshenko has been just as firm with parliament as he tries to meet the stringent terms set by Western lenders who have seen past rescues squandered by successive Kiev governments.

The disputed 2015 spending plan was rammed through by the government-led coalition after a marathon debate concluded in a 4:15 am vote. Most deputies had not even been able to examine a full copy of the bill.

Poroshenko was especially keen to have the budget passed by year-end because its pro-business provisions would likely allow the IMF to release billions of dollars in extra assistance following a visit that starts on January 8.

Ukraine's reserves have more than halved in the past year to less than $10 billion -- a figure dwarfed by the state's foreign debt obligations for 2015.

The new spending law seeks to slash red tape and simplify life for small businesses by reducing the number of taxes they pay to nine from 22. It also looks to boost employment by slashing the payroll tax to 16.4 from 41 percent.

And it quadruples the capital gains tax rate paid by owners who register their firms abroad -- a measure designed to fight tycoons' penchant to park their fortunes off shore.

Its more unpopular changes include a 10 percentage point hike in the customs duty slapped on alcohol and tobacco -- as well as most food.

"This is going to be a draconian year," Samopomich (Self-Reliance) centrist party member Oleg Berezyuk warned before the 233-27 vote.