(Bloomberg) — Ukraine and Russia failed to clinch a cease-fire in talks that ended in Istanbul on Tuesday, with Moscow saying it will reduce military operations in areas where its forces are being pushed back and Kyiv calling for security guarantees from European Union and NATO members.
A Ukrainian negotiator said his country is seeking guarantees for territory that doesn’t include Russian-controlled areas and that Kyiv is willing to discuss the status of occupied Crimea. Russia indicated a meeting was possible between President Vladimir Putin and his Ukrainian counterpart Volodymyr Zelenskiy.
Russia’s delegation left Istanbul, and no date or time was set for any potential future talks, according to a person close to the Moscow delegation. European nations expelled more Russian diplomats from their capitals, even as stocks rose and oil fell on optimism for progress in the negotiations.
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Key Developments
- Ukraine Overture to Russia Offers Path to Putin-Zelenskiy Talks
- U.S. Sees Russian Saber Rattling Reshaping Nuclear Landscape
- Chemical Weapons a High Risk, Low Gain Ukraine Option for Putin
- NATO Allies Are Split on Whether They Should Talk to Putin
- Russia Says It Made $102m Coupon Payment on 2035 Eurobond
- Biden Says Putin Remark Showed Outrage, Not Change in Policy
All times CET:
U.S. Weighs $500 Million More for Ukraine Despite Talks (5:57 p.m.)
The U.S. government is considering providing Ukraine with an additional $500 million in aid and is pushing European allies to match the contribution, according to people familiar with recent discussions. The Ukrainians could use the money to shore up government services, or for humanitarian aid, or military purposes, one of the people said.
Officials in the governments of several NATO allies, including the U.S. and U.K., are skeptical of recent Russian announcements that it will scale back its assault on Kyiv and have urged increased support to Ukraine, the people said.
Luxembourg Freezes 2.5 Billion Euros in Sanctions Crackdown (5:55 p.m.)
Luxembourg has frozen assets worth 2.5 billion euros so far, as it enforces EU sanctions targeting Russia, Finance Minister Yuriko Backes told lawmakers. The Finance Ministry, which works with Luxembourg’s financial markets regulator, said last week that it has received about 100 notifications of assets or financial resources that have been frozen.
Poland to Ban Russian Coal Imports (5:52 p.m.)
Poland’s government plans to ban coal deliveries from Russia and look instead for supplies from countries including Australia, Colombia and the U.S., Environment Minister Anna Moskwa said.
The country, which has been importing around 8 million tones of Russian coal annually, has been calling on the European Union to ban energy exports from Russia in response to its invasion of Ukraine. The government will present a plan on Wednesday to cut supplies of Russian oil and gas, Moskwa said.
European Countries Expel More Russian Diplomats (5:15 p.m.)
The Netherlands announced it was expelling 17 Russian intelligence officers, and Belgium said it would oust 21 for spying. North Macedonia also declared five diplomats personae non grata for breaching diplomatic conventions. The Czech Republic, which forced out scores of Russians from the embassy in Prague last year, said on Tuesday it was telling one more to leave.
Since last month’s invasion, European Union members have expelled Russian diplomats, including the three Baltic nations, which expelled 10 people; Bulgaria, which expelled 10 more; and Poland, which ordered 45 to leave. Police in Slovakia expelled three Russian diplomats after it detained four people suspected of spying for Moscow. Germany is also considering expelling suspected spies, an official said Tuesday.
Ukraine Needs Fast Help to Rebuild Farming, World Bank Says (5:05 p.m.)
Ukraine will need fast help from other countries to get the fertilizer and seeds needed to restore its farming output and crucial exports to the rest of the world once Russia’s invasion is over, according to the head of the World Bank.
Ukraine would be helped by fertilizer from western Europe to replace imports of that key agricultural input from Belarus that have been cut off, David Malpass, president of the Washington-based development lender, told Bloomberg Television.
Denmark Offers to Send 800 Troops to Baltics (4:46 p.m)
Denmark is offering to increase its military deployment in the three Baltic countries by sending 800 more troops under NATO command.
Prime Minister Mette Frederiksen said Denmark already has 200 troops and several F-16s in the Baltic countries as well as a warship in the area. Denmark is waiting for an official request from NATO before sending the troops.
U.S. Hasn’t Seen Signs Russia Is Serious in Talks (4:45 p.m.)
Secretary of State Antony Blinken said the U.S. is focusing on Moscow’s actions, not its words, as peace talks with Ukrainian negotiators in Istanbul ended with a Russian pledge to reduce some of its military operations.
“There is what Russia says and there is what Russia does; we’re focused on the latter,” Blinken told reporters in Morocco. “We have not seen signs of real seriousness” from Russia toward de-escalating its war, he said.
Ukraine-Russian Talks End With No Cease-Fire in Turkey (3:40 p.m.)
The first round of face-to-face talks between Russian and Ukraine in more than three weeks failed to agreed on a cease-fire, but offered a potential pathway to a meeting between Putin and Zelenskiy to resolve the war.
Ukraine’s negotiators said that they were seeking security guarantees for areas outside of Russian-controlled Crimea and separatist-held territories. Ukrainian negotiator Mykhailo Podolyak said that Kyiv has offered to discuss status of Crimea, which was seized by Russia in 2014 and has been occupied ever since.
Russia responded with an announcement that it was cutting military activity near Kyiv and the city of Chernihiv, where Ukrainian officials say they are driving Russian forces back through counterattacks. Russian chief negotiator Vladimir Medinsky said Ukraine had presented a clear position that would be escalated promptly to Putin for a response.
Germany Considers Expelling Suspected Russian Operatives (3:35 p.m.)
Germany is considering expelling a number of suspected Russian operatives, following similar action from other European Union nations that have ousted diplomats from Moscow in the wake of its invasion of Ukraine.
Germany historically has had a large number of Russian spies operating on its territory, according to people familiar with Berlin’s discussions. One official, who asked not to be identified discussing intelligence matters, said there were dozens of Russian agents in Germany. A German government spokesperson said he was not aware of any such plans.
Stocks Jump on Optimism for Ukraine-Russia Talks (2:37 p.m.)
Futures on the S&P 500 rose 0.9% following a round of negotiations between Kyiv and Moscow that led to a Russian pledge to cut some military operations. The Stoxx Europe 600 rose 2%.
West Texas Intermediate erased earlier gains to trade down as much as 7.1%, below $100. The ruble climbed past 83 per dollar, approaching levels seen before Russia invaded Ukraine. The currency led gains among emerging markets for a second-straight day.
Russia Offers to Buy Back 2022 Eurobonds in Rubles (1:42 p.m.)
Russia’s Finance Ministry offered to buy back $2 billion in dollar-denominated Eurobonds that come due next week, but says it will pay for the repurchased notes in rubles.
The offer comes as Russia has to date avoided a default since the war started, even as credit-rating companies warn one could be imminent. Local capital controls would mean that any investors who receive rubles for their obligations would not be able to convert them into dollars.
Russia is Heading for Deep Recession, IMF Says (12:29 p.m.)
Russia is going to be in a deep recession this year, Kristalina Georgieva, the managing director of the International Monetary Fund, told a forum in Dubai.
The IMF has previously said Russia will default on its debt obligations as the nation suffers a deep recession caused by sanctions in response to its invasion.
Russia Makes Latest Coupon Payment on Sovereign Bonds (11:40 a.m.)
Russia has transferred a $102 million coupon payment on bonds due in 2035 to the National Settlement Depository in Moscow, as the government continues to service its foreign debts even after the invasion of Ukraine severed ties with the global financial system.
From the NSD, the funds are due to be distributed to investors. While the U.S. Treasury has made a carve-out in its sanctions on Russia that allows bond payments to go ahead, the foreign banks involved in the transfers are cautious of falling foul of the sweeping penalties on Russian banks and businessmen. Restrictions imposed by the main international settlement systems have also contributed to payment delays for holders of Russia’s sovereign and corporate debt.
By transferring the cash, the Finance Ministry said Russia has performed its obligations under the 2035 bond “in full,” according to its statement Tuesday.
NATO Allies Are Split on Whether They Should Talk to Putin (7:25 a.m.)
With the war now in its second month, a series of dilemmas are coming into sharp focus over which conditions could be deemed acceptable by Ukraine for any accord, especially as regards the security guarantees alliance members might be able to offer Kyiv.
There are also divergences over what further weapons to send Ukraine, and on the question of whether talking to Putin is helpful or not, according to people familiar with discussions that have taken place in the past week between leaders on both sides of the Atlantic and documents seen by Bloomberg.
France and Germany are of the view a cease-fire should be achieved quickly and then the withdrawal of Russian troops. But other NATO members believe the dialog that Paris and Berlin are pursuing with the Kremlin is counterproductive and could play into Putin’s hands, according to one of the documents.
Space Station in Spotlight Over Russia’s War in Ukraine (7:18 a.m.)
With the U.S. and allies imposing sanctions on Russia, will Moscow retaliate by dooming the International Space Station? No one knows, but the possibility is real. “I think this is the biggest threat to the international partnership in its history,” says Ron Garan, a former NASA astronaut who spent five months aboard the station in 2011.
What’s at risk is the largest and most complex international project ever, a $100 billion testament to human ingenuity and cross-border cooperation. The 490-ton assemblage has been inhabited continuously for 21 years, a record in manned spaceflight, and at any given time more than 100 scientific experiments are under way.
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