By Andrew Osborn
MOSCOW (Reuters) - Francois Hollande's decision to meet Vladimir Putin in Moscow next week, the first bilateral visit by an EU leader in six months, may galvanise Kremlin efforts to end its isolation over the Ukraine crisis, but is unlikely to yield a quick fix.
Since Russian troops annexed Ukraine's Crimea last March, the Kremlin guest list has been light on Western leaders and heavy on statesmen the West shuns, such as Syria's Bashar al-Assad or Zimbabwe's Robert Mugabe.
Hollande's visit, which comes after Islamist gunmen and bombers killed at least 129 people in Paris, including one Russian woman, could change that pattern, even though serious differences over Ukraine and Syria may ultimately limit the scope of what is shaping up to be a tentative rapprochement.
One senior Western diplomat likened the West's approach to "double-think", a phrase coined by George Orwell in his novel 1984 to describe the ability to embrace contradictory opinions required by a totalitarian regime.
The West's strategy was to engage Russia where possible, the diplomat told Reuters, but to continue to punish it over Crimea and Ukraine. He said he thought sanctions would stay for now despite any perceived thaw.
Hollande made a brief Moscow trip in December to discuss France's decision to back out of a warship deal over the Ukraine crisis. This time, the thrust will be more constructive: Cooperation over Syria in the wake of the Paris attacks.
His visit, the first by an EU leader since Chancellor Angela Merkel jetted in to mark 70 years since the defeat of Nazi Germany in May, is likely to be viewed by the Kremlin as an important step in its post-Ukraine rehabilitation.
"After 18 months of sanctions and attempts to isolate Russia for its role in the conflict in Ukraine, the Paris terrorist attacks have started a process of rapprochement between Russia and the West," said Daragh McDowell, of risk analysis company Verisk Maplecroft.
With Russia and France engaged in separate, and sometimes contradictory, air strike campaigns in Syria, Putin on Tuesday ordered the Russian navy in the eastern Mediterranean to coordinate with the French navy.
The Kremlin needs the resumption of ties signalled by a possible Franco-Russian alliance over Syria to gather pace.
Hit by Western sanctions, low oil prices, and a weak rouble, Russia's economy is set to shrink by around 4 percent this year, and analysts say its Reserve Fund may only last another two years unless access to international debt markets is restored.
Any strengthening in relations, no matter how fragile, is therefore cheered by Russian markets. Though oil prices remain depressed, the RTS stock index is up almost 8 percent this week while the rouble is up almost 3 percent against the dollar.
VOLTE FACE
Few Russians believe Western sanctions will be lifted anytime soon, but coordination at the level of realpolitik would offer them hope of medium-term change.
Putin had originally hoped his idea of forming a grand international coalition against terrorism, presented at the United Nations in September, would find wide support and help end his country's isolation. Instead, criticism of the United States in the same speech irked Washington.
His decision to then launch air strikes against rebel targets in Syria was part of the same calculated gambit to help shatter his country's isolation. It instantly thrust Russia on the global stage, forcing the West to reckon with it over Syria.
But it went down badly in many Western capitals with the United States accusing Moscow of bombing its allies rather than the Islamic State militants it said it was targeting.
Tensions spiked further after Western politicians said they thought the downing of a Russian passenger plane over Egypt on Oct. 31, with the loss of 224 lives, was most likely terrorism.
The Kremlin, which carefully manages how its Syria intervention is presented to the Russian public, bristled.
Terrorism was just one version, it said. Four days after the Paris attacks, when Islamist extremism topped the global agenda and the world's focus was not on Russia's Syria campaign, it said it agreed someone had placed a bomb on the plane.
"The Russian authorities had been uncharacteristically hesitant in determining a cause (of the plane crash), likely due to fears of the potential domestic political backlash," said Maplecroft's McDowell.
He said what he called a "volte face" showed how keen Moscow was to nurture relations with Hollande.
Tentative signs of a wider rapprochement were on show at the G20 meeting in Turkey earlier this week. At last year's G20 meeting in Brisbane, Putin flew home early after Western leaders berated him over Ukraine.
This year, he was photographed locked in intense talks with Barack Obama and held one-on-one talks with British Prime Minister David Cameron.
SHIFTING STANCE
Putin savoured the moment.
"It seemed to me that there was a real interest, at expert level and when it came to discussing problems, in resuming work in all kinds of areas, including on the economy, politics and security," Putin told reporters.
"Life moves forward, everything changes. New problems, threats and challenges arise which are difficult to resolve on your own whoever you are. We need to unite."
Putin, also at the G20, shifted his position on Ukraine, making a surprise offer to restructure a $3 billion Eurobond. Previously, Russia had demanded the money be repaid in full and on time next month.
A wobbly ceasefire in eastern Ukraine, where pro-Kremlin militants face off against the Ukrainian army, has largely held, even though it has looked shakier in recent days with reports of casualties on both sides.
Ukrainian officials say they first detected a shift in Russia's attitude at a meeting with Putin in Paris in October.
"Putin was reasonably calm," said one Ukrainian government source, saying the Russian leader had been belligerent at previous meetings.
"At least in some moments he was trying to listen to the arguments and in a sense it was more, I would not call it business-like, you cannot have a business-like meeting with Putin, but he seemed to be talking about the practical considerations."
Fundamental differences on Ukraine are likely to persist however. Western diplomats say there is no chance they will ever recognise Russia's annexation of Crimea and say they will need to see a peace deal over eastern Ukraine fulfilled to the letter despite recent developments.
Nor, they say, is there any question of glossing over MH17, the Malaysian passenger plane shot down over eastern Ukraine.
Still, signs of a rapprochement, however fledgling, are causing anxiety in central and eastern Europe, parts of which were once part of the Soviet empire.
"Cooperation elsewhere does not mean concessions in Europe's own neighbourhood," Estonian Prime Minister Taavi Roivas said in a speech to parliament on Tuesday, saying that the Ukraine peace deal had to be fully honoured.
"A common foreign policy, including the policy of sanctions, must be patient and untiring."