(Bloomberg) — President Joe Biden and U.S. allies will impose more sanctions on Russia at this week’s European Union summit, his national security adviser said.
Ahead of the summit, Germany and Hungary sought to put the brakes on a potential embargo on Russian oil, deepening differences in the bloc over how to further punish Moscow. Germany relies on Russia for about a third of its oil. The Kremlin has warned that such measures would “hit everyone,” especially Europeans.
Russia’s parliament voted to expand a law targeting the publication of “fake” news that has already reduced news reporting from the country, while a Russian court sentenced jailed opposition leader Alexey Navalny to another nine years in jail.
Ukraine President Volodymyr Zelenskiy said Ukrainian forces were still holding Russian troops at bay on many fronts. The invasion has driven 10 million people — nearly a quarter of Ukraine’s population — from their homes, according to the United Nations. About 3.4 million have fled, the vast majority to eastern European nations including Poland.
(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)
Key Developments
- Biden Sees Risk of Russian Cyberattack on U.S. as Sanctions Bite
- Stalled Elsewhere, Russia Focuses on Mariupol in Ukraine Plan B
- EU Leaders Poised to Support Taxing Windfall Energy Profits
- Oil Thirst Is Forcing Biden to Pivot U.S. Back to Saudi Arabia
- Ukraine Is Changing the World Order, Just Not How Putin Hoped
- Russian Billionaires Are Running Out of Havens to Stash Fortunes
All times CET:
Russian Cyberattack on Ally Could Trigger NATO Response, White House Says (8:35 p.m.)
A cyberattack by Russia on a NATO country could trigger a collective response from the U.S. and its allies, but not necessarily a military one, National Security Adviser Jake Sullivan said at a White House press briefing.
“We could see circumstances in which a collective response by the alliance to a cyberattack would be called by an ally,” Sullivan said.
“That is absolutely something where we and other countries could bring capabilities to bear to help a country both defend itself and respond to a particular cyberattack,” he said. “Now, that’s not necessarily the same thing as a military response. That response could take many different forms.”
Biden Aide Says Allies to Impose More Sanctions (7:02 p.m.)
National Security Adviser Jake Sullivan told reporters at the White House that on Thursday Biden “will join our partners in imposing further sanctions on Russia, and tightening the existing sanctions to crack down on evasion and to ensure robust enforcement.”
“He will announce joint action on enhancing European energy security and reducing Europe’s dependence on Russian gas at long last,” Sullivan said.
Germany Says Russia’s G-20 Status Isn’t on Table for Now (6:12 p.m.)
German Chancellor Olaf Scholz said it’s too soon to discuss Russia’s continued membership in the Group of Twenty and World Trade Organization, telling reporters “we first need direct negotiations between Russia and Ukraine that go beyond what we have seen so far.”
Scholz didn’t rule out a discussion on Russia’s membership in future but said that should happen as a collective and not among individual states. Russia was excluded from the Group of Eight after its annexation of Crimea in 2014, but the G-20 is a more diverse group of nations including China and Saudi Arabia, so terminating its membership would also be more complex.
Credit Agricole Says It Suspended Activities in Russia (6 p.m.)
Credit Agricole SA has suspended its activities in Russia, joining a growing list of lenders scaling back their business in the country after the invasion of Ukraine.
The Paris-based bank, which has stopped all commercial activity in Russia, contacted its international corporate clients to agree on suspension modalities for the services provided by its local unit, the bank said in a statement on Tuesday.
Ex-U.S. Defense Chief Calls War Devastating for Russia (5:30 p.m.)
Russia has failed to achieve any of its major objectives in Ukraine, former U.S. Defense Secretary Mark Esper said Tuesday.
Esper said on Bloomberg Television’s “Balance of Power With David Westin” that it’s clear Russia’s equipment isn’t well-maintained and that its military suffers from poor morale. The impact of the war so far has been “devastating for the Russians and their military” and the battlefield setbacks increase the risk of President Vladimir Putin using chemical weapons, he added.
Esper said he doesn’t currently support a no-fly zone over Ukraine but that if the humanitarian situation continues to deteriorate, the U.S. could be “morally compelled to act.”
Lagarde Says Cryptos Being Used to Evade Russian Sanctions (5:20 p.m.)
European Central Bank President Christine Lagarde said there are signs that some Russians are attempting to bypass sanctions over the war in Ukraine by converting rubles into cryptocurrencies and stablecoins.
Crypto assets “are certainly being used, as we speak, as a way to try to circumvent the sanctions that have been decided by many countries around the world against Russia,” she told a virtual event on Tuesday.
But as of last week, there was no evidence of Russia using cryptocurrencies to evade curbs, according to Jonathan Levin, co-founder of blockchain-analytics firm Chainalysis.
Latvia Detains Blogger for Pro-Russia Content (4:45 p.m.)
Latvian authorities detained an individual for posting videos and recordings on YouTube, Telegram and social media that backed Russia’s invasion. The unidentified suspect is under investigation for “glorifying the war crimes committed by the Russian armed forces in Ukraine,” the Baltic nation’s security service said in a statement.
The suspect, who remains detained, posted material “reflecting events in Russia’s interest,” praised the Kremlin’s military tactics, accused Ukrainian forces of committing crimes and made statements against Latvians and the state, the security service said in the statement.
Zelenskiy Aide Sees No Territorial Concessions (4:15 p.m.)
Alexander Rodnyansky, a top adviser to Zelenskiy, told Bloomberg Television there is “no wiggle room” for territorial concessions but that he sees potential for progress in talks on neutrality.
Rodnyansky expressed concern that ((Russia’s President Vladimir)) Putin isn’t serious enough about talks and called on the world to draw a red line should Russia use chemical weapons or weapons of mass destruction in Ukraine.
We really hope that nobody will just sit back and watch what happens,” he said. “Of course, we hope there’ll be an intervention.”
Ukraine Gets Equivalent of $206 Million in War-Bond Sale (3:01 p.m.)
Ukraine raised 6.04 billion hryvnia ($206 million) from its latest auction of domestic bonds to help fund its military resistance to Russia’s invasion. Tuesday’s sale is the fourth such auction, and adds to the roughly $691 million already raised since the invasion started.
Read more: Ukraine Gets Equivalent of $206 Million in Fourth War-Bond Sale
UN Chief Says It’s Time to Talk Instead of Fight (2:58 p.m.)
United Nations Secretary General Antonio Guterres said in New York that diplomatic progress is being made “on several key issues.”
“There is enough on the table to cease hostilities now,” he said, adding that he’s been in contact with several diplomats regarding prospects for serious talks.
Guterres said Russia’s war on Ukraine is intensifying and “getting more destructive and more unpredictable by the hour.” So far, 10 million Ukrainians have been forced from their homes and are on the move, he said.
Estonia Pledges Support for Russians in EU Nation’s East (2:38 p.m.)
The Estonian government pledged to invest in roads, schools and jobs in the nation’s largely Russian-speaking northeast in a show of support for a region that has been a source of cultural tension even before the invasion of Ukraine.
On a visit to Ida-Virumaa, a region that has trailed other areas in reaping the advantages of Estonia’s 2004 EU entry, Prime Minister Kaja Kallas pledged to widen a single-lane highway that connects the region to the capital, provide more EU funds and invest in schools. She also pledged to increase spending on language classes for Estonia’s more than 170,000 Russian-speaking residents, many of whom face difficulty in finding jobs due to a lack of fluency in Estonian.
Ukraine Says Food Infrastructure Destroyed (2:29 p.m.)
Ukraine’s agriculture minister, Roman Leshchenko, warned that Russia’s invasion was destroying vital infrastructure and would create new hot spots of hunger and famine across the world by preventing Ukraine’s exports of grain, vegetable oils and meat.
“Today Ukraine has no choice, we have to limit our exports to ensure our survival,” he told the European Parliament via videoconference, repeating calls for Europe to stop any kind of cooperation with Russia and its companies. He said Ukraine’s grain port in Mykolaiv on the Black Sea was destroyed by Russian bombs on Tuesday, accusing Russia of intentionally exporting famine.
“We understand that our other ports and infrastructure for agriculture export will be destroyed within another couple of weeks,” he said.
Putin Foe Navalny Sentenced to 9 Years in New Conviction (1:37 p.m.)
A Russian court on Tuesday sentenced jailed opposition leader Alexey Navalny to nine years in a high-security prison, according to Interfax, in a ruling that will keep President Vladimir Putin’s top critic sidelined amid a harsh crackdown on the opposition.
The conviction comes amid a harsh crackdown on dissent since the start of the war a month ago, with Putin labeling those opposed to the invasion as “traitors.” Navalny has dismissed the legitimacy of the proceedings and used his appearances during the trial to denounce the war.
Navalny’s ally Ivan Zhdanov said on Twitter that the new sentence will be added to his previous one, meaning he faces around 12 more years in prison.
Read more: Putin Foe Navalny Sentenced to 9 Years After New Conviction
Russia Expands New Law Criminalizing ‘Fake’ News (1:08 p.m.)
Russian lawmakers on Tuesday approved the expansion of a law that authorizes imprisonment for publishing “fake” news about the military’s operations abroad to include the international activities of all state agencies.
The State Duma lower house of parliament backed amendments criminalizing the public dissemination of “knowingly false” information about the activities of state bodies to protect the interests of Russians abroad. The offense carries a penalty ranging from a fine up to 1.5 million rubles ($14,300) to imprisonment for up to 15 years if the allegations led to “grave consequences.”
Greek Minister Says He Plans to Escort Aid to Mariupol (12:55 p.m.)
Greek Foreign Minister Nikolaos Dendias said Tuesday he asked both Ukraine and Russia not to hinder the delivery of humanitarian aid by Greece to the besieged city of Mariupol. Dendias said he intends to accompany this aid in person in coordination with the president of the International Committee of the Red Cross.
The priority of the Greek government is the protection of the ethnic Greek community and civilian population in the city, Dendias said.
More EU Debt Not ‘Off the Table,’ Gentiloni Says (12:11 p.m.)
The EU may consider new joint borrowing to cover the costs of bolstering the bloc’s defensive capabilities, Economy Commissioner Paolo Gentiloni said.
Financing defense investments “require a more supportive framework of fiscal rules and potentially new tools at the European level,” he said on Tuesday in a webinar hosted by Oxford University. Additional EU issuance of common debt cannot be “off the table.” he added.
Gentiloni added that such decisions won’t happen yet, since the EU is focusing on the “emergency reaction” to cope with the fallout of Russia’s ongoing invasion of Ukraine, including the support for refugees. But the discussion could take place in few weeks once the economic impact of the ongoing crisis becomes clearer.
Up to 100,000 Programmers May Leave Russia in April (12:07 p.m.)
Between 70,000 to 100,000 Russian IT specialists may emigrate in April, Interfax reported, citing an estimate from the Russian Association for Electronic Communications. The group says they are in addition to the first wave of 50,000 to 70,000 programmers who have already left.
Russia is developing various incentives — including tax breaks, subsidized mortgages and a military draft deferment — to keep IT specialists from leaving as the country faces the prospect of a steep economic decline following its invasion of Ukraine.
Zelenskiy Calls on Pope to Mediate (11:30 a.m.)
Zelenskiy said in a tweet that he spoke to Pope Francis and told him “about the difficult humanitarian situation and the blocking of rescue corridors by Russian troops.”
He also invited the Pope to visit Ukraine.
Kremlin Says Ukraine Talks Slower (11:15 a.m.)
Kremlin spokesman Dmitry Peskov said peace talks with Ukraine are “going more slowly and less substantively that we would like,” reiterating Russia’s position that Kyiv is dragging its feet.
Ukraine accuses Russia of negotiating in bad faith and continuing to bombard its cities during the talks. Zelenskiy repeated late Monday that he’s prepared to meet Putin, who has said he’s not opposed but would only agree once negotiators have made more progress on a deal.
Italy Wants Ukraine in EU (11:10 a.m.)
Italy wants Ukraine to be part of the EU, Prime Minister Mario Draghi told lawmakers in Rome following an address to parliament by Zelenskiy via video link.
“We want to draw a path to bring Ukraine closer to Europe,” Draghi said. Italy has so far frozen assets worth about 800 million euros ($880 million) belonging to Russian oligarchs, Draghi added.
Oil Reverses Earlier Gain (11:00 a.m.)
Oil reversed an earlier gain in choppy trading as the EU weighs a possible ban on Russian crude imports, though some key members remain opposed to such a move for now.
Brent futures fell below $114 a barrel after earlier topping $119. EU foreign policy chief Josep Borrell said he expects leaders to discuss — but probably not yet approve — further sanctions against Russia when they meet in Brussels later this week. Stocks in Europe advanced along with U.S. equity-index futures.
Ukraine Will Need ‘Marshall Plan,’ Germany Says (10:40 a.m.)
Ukraine will need an international “Marshall Plan” similar to the one created by the U.S. after World War II to finance reconstruction once Russia’s invasion ends, according to German Finance Minister Christian Lindner.
“Our solidarity toward our European neighbors is for the long term and so we need an international Marshall plan for Ukraine,” Lindner said in a speech to the lower house of parliament in Berlin. “We hope for peace soon but when it’s achieved we will also be there to offer support for the reconstruction,” he added.
Named after U.S. Secretary of State George Marshall, the post-war recovery plan covered 16 nations including Germany, according to the Marshall Foundation. They received almost $13 billion in aid through 1951 which paid for food, fuel and machinery and investment in rebuilding industry.
Serbia Denounces Threat for Not Joining Sanctions (10:30 a.m.)
Serbia angrily disputed a suggestion from EU member Lithuania that the Balkan state may be punished for refusing to join sanctions against Russia even as Belgrade seeks to join the bloc.
“Threatening Serbia with sanctions unless it imposes sanctions against the Russian Federation is as stupid as it is hypocritical,” Interior Minister Aleksandar Vulin said in comments published on the government’s website. He was reacting to a call on Monday by Lithuanian Foreign Minister Gabrielius Landsbergis to penalize states that are still doing business with Russia and allowing Moscow to bypass EU sanctions.
Ukraine Criticizes Neighbor Hungary on Sanctions (10:00 a.m.)
Ukraine criticized Hungary after its foreign minister, Peter Szijjarto, said EU sanctions on Russian energy imports were a “red line” and Budapest wouldn’t support a no-fly zone in Ukrainian airspace. While Hungary is a member of NATO and the EU, Szijjarto and his prime minister, Viktor Orban, have nurtured close ties with Russia.
“One can’t guarantee peace and security in Hungary without peace and security in Ukraine,” Ukrainian Foreign Ministry spokesman Oleh Nikolenko wrote on Facebook. “It’s useless to hope that efforts to please an aggressor will yield success. It’s proven by history, including Hungary’s history.”
EU Discussing Further Sanctions: France’s Beaune (9:45 a.m.)
Clement Beaune, France’s secretary of state for European affairs, said discussions are ongoing in the EU on reinforcing sanctions against Russia.
“We will regularly increase pressure on Russia. If we need to impose new packages of sanctions, we will do so, discussions are under way,” Beaune told reporters before a ministerial meeting in Brussels. Some EU states have called for more sanctions on top of those already agreed targeting the Russian economy, though there is resistance from countries like Germany and Hungary to the idea of a Russian oil embargo.
Beaune said the EU can still reinforce existing packages “with a message always clear and simple, unfortunately necessary to Russia: if the operations, if the war chosen by Russia, continues, we will increase the price to pay and the pressure we exercise on Russia.”
Russia Makes $66 Million Bond Coupon Payment (9:20 a.m.)
Foreign holders of Russia’s sovereign bond maturing in 2029 are watching their accounts for their latest debt coupon after the government said a $66 million payment had been made to its local depository.
The Finance Ministry announced that the transfer to the National Settlement Depository meant it had met its obligations on the bond coupon “in full.” The debt also has a ruble-fallback option, which allows Russia to make the payment in its local currency, provided it meets certain requirements.
China Envoy Urges Firms To “Fill the Void” (8:45 a.m.)
China’s top Russia envoy, Ambassador Zhang Hanhui, on Sunday told Chinese executives in Moscow to seize economic opportunities created by the crisis, a strategy that could help soften the blow of sanctions on Russia. The comments were summarized by the Russia Confucius Culture Promotion Association on its official WeChat account.
Biden warned Chinese counterpart Xi Jinping on Friday of unspecified “implications and consequences” if Beijing supported Putin over Ukraine. While China has decried sanctions and pledged to maintain “normal trade relations” with Russia, major Chinese companies so far appear to be complying with the penalties.
Ukraine Forces Holding Russia at Bay: Zelenskiy (8:30 a.m.)
Zelenskiy repeated his assertion that Russian troops were still largely being held back, requiring them to focus on reinforcing existing positions rather than taking new ones.
In a late-night video address, Zelenskiy said Russia had shelled locations in the Zhytomyr region of northern Ukraine. He accused troops of firing at convoys of civilians evacuating near Zaporizhzhia, a city in the south which has a nuclear power plant now controlled by Russia. Humanitarian corridors designed to allow safe passage of people from conflict areas have struggled to hold in the south, including for the besieged port city of Mariupol.
Russia Halts WWII Peace Talks With Japan (1:57 a.m.)
Russia will stop negotiations with Japan on a peace treaty that would officially end a conflict dating back to World War II after Tokyo imposed unprecedented sanctions over the invasion.
The two countries never sealed an official treaty ending the war as they wrangled for decades over a small group of islands close to Hokkaido. The Soviet Union seized the isles in 1945, expelling thousands of Japanese residents.
Biden Says Hypersonic Missile Shows Putin Desperate (12:10 a.m.)
Biden said the Ukrainians are “wreaking havoc against the Russian military, whether it’s their tanks, or their helicopters or their aircraft,” adding: “And if you notice, they’ve just launched their hypersonic missile because it’s the only thing they can get through with absolute certainty.”
U.S. Defense Secretary Lloyd Austin declined to confirm that Russia had used a hypersonic weapon in a CBS News interview a day earlier. The missile, designed to travel several times the speed of sound, is “almost impossible to stop,” Biden said in remarks to the Business Roundtable, a Washington lobby group.
The president also stressed the danger of cyberattacks, saying of Putin: “He has the capability. He hasn’t used it yet but it’s part of his playbook.”
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