European leaders are cautiously optimistic about resolving the crisis in eastern Ukraine following recent talks between the Russian and Ukrainian Presidents. CCTV America’s Roee Ruttenberg reports from Milan.

It was the third meeting between the Russian President Vladimir Putin and his Ukrainian counterpart Petro Poroshenko. It is also the first meeting since a September cease-fire went into effect. It was meant to halt months of fighting in eastern Ukraine that’s left more than 3,000 people dead. However, observers said both sides have failed to live up to their obligations.

Italian Prime Minister Matteo Renzi said of the Russia-Ukraine meeting that progess had been made, but that substantial differences between the sides remained.

The talks took place on the sidelines of the Asia-Europe Meeting Summit (ASEM), which concluded in Milan on Friday.

Western leaders attending the summit said the fighting in Ukraine, while localized, threatens the regional as whole. Moscow accused the west of blackmail saying the sanctions were absurd. The Kremlin has also threatened to cut gas deliveries to Ukraine if there’s no agreement with Kiev over billions of unpaid bills.

German Chancellor Angela Merkel also attended he ASEM summit. Earlier this week Berlin slashed its official growth forecasts for 2014 to 1.2 percent from 1.8 percent. It also slashed its 2015 growth expectations from 2 percent down to 1.3 percent, blaming moderate global growth and crisis abroad, most notably Russia.

CCTV America interviewed Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics who analyzed Germany’s economic situation.