March 31 (Bloomberg) -- Russia began pulling back some troops from Ukraine’s eastern border as diplomatic moves continued to ease the crisis over its annexation of Crimea.

President Vladimir Putin told Chancellor Angela Merkel in a phone call he’d ordered a partial withdrawal, the German leader’s office said in a statement in Berlin. A Russian motorized battalion was returning to its base in the Samara region on the Volga river after exercises near the Ukrainian border, the Interfax news service cited the country’s Defense Ministry as saying.

U.S. Secretary of State John Kerry and his Russian counterpart, Sergei Lavrov, discussed Ukraine by phone today, the Russian Foreign Ministry said, a day after four hours of talks between the two top diplomats in Paris. The contacts are helping to ease investors’ concerns over the crisis, the worst standoff between Russia and NATO countries since the fall of the Iron Curtain.

“I have the impression that a process of reflection has begun” in Russia, Merkel told students at a Berlin school earlier today. “We would also like to have Russia closer to Europe if it plays by the rules.”

Putin and Merkel also discussed “possible further steps to stabilize the situation in Ukraine and in Transnistria,” the breakaway pro-Russian region of Moldova on Ukraine’s southwest border, according to the chancellor’s office.

David Fuller's view

It would be very nice and reassuring if the prospect of escalating sanctions from the West, some political pressure from oligarchs with international business interests, and common sense on the part of Vladimir Putin were bringing an end to this crisis.  This is a possible ‘best case’ outlook but it would be premature to conclude that it was more than a tactical manoeuvre to weaken Western resolve.  Meanwhile, Russia’s stock market and currency (shown inversely) remain relevant indicators.