(Bloomberg) — The US is prepared to provide an additional $450 million in military aid to Ukraine, the Associated Press reported. In the meantime, precision artillery systems from the US have arrived in Ukraine, potentially boosting Kyiv’s ability to repel Russian forces.
The Kremlin said a peace deal with Ukraine isn’t possible until Kyiv accepts all its demands — leaving conditions at a stalemate as Russia’s invasion nears the four-month mark. The timeline for Ukraine to achieve EU membership will hinge on the country’s ability to enact reforms, as well as the course of the war, a top aide to President Volodymyr Zelenskiy said.
German Economy Minister Robert Habeck triggered the second stage of the country’s three-phase gas-emergency plan on Thursday and warned of the potential for Lehman-like contagion.
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Key Developments
- Spain’s Big Defense Push Hinges on Creating a National Champion
- Germany Warns of Lehman-Like Contagion From Russian Gas Cuts
- Russia Faces Fresh Bond Deadline With Possible Default Days Away
- Megayachts Running Low on Safe Harbors as Russia Sanctions Bite
- Europe Industries Cut Gas Use as Continent Saves Fuel for Winter
- Cold Winter Could Push Europe Toward Gas Supply Shortages
On the Ground
Ukrainian air defense downed two cruise missiles targeting Odesa on Thursday, the city council said on Telegram. Three cruise missiles launched from occupied Kherson targeted the city of Mykolayiv, hitting industrial and social infrastructure and injuring one person.“Heavy explosions” were heard in the southern seaport, its mayor said. A day earlier Mykolayiv faced a large-scale rocket attack. “A threat of artillery shelling has been announced in the city,” the mayor wrote on his Telegram account, urging residents to go to shelters “immediately.” Russian troops seized two more villages south of Lysychansk, in Luhansk, a stronghold Kyiv relies on in its defense in that area.
(All times CET)
US to Provide $450 Million More in Military Aid, AP Says (6:43 p.m.)
The US will send an additional $450 million in military aid to Ukraine, including some additional medium-range rocket systems, according to unidentified American officials cited by the AP.
The new package is expected to include a number of High Mobility Artillery Rocket Systems, or HIMARS, adding to the four that have already arrived.
Germany Warns of Lehman-Like Contagion From Russian Gas Cuts (5:37 a.m.)
Germany warned that Russia’s moves to slash Europe’s natural gas supplies risked sparking a collapse in energy markets, drawing a parallel to the role of Lehman Brothers in triggering the global financial crisis.
With energy suppliers piling up losses by being forced to cover volumes at high prices, there’s a danger of a spillover effect for local utilities and their customers, including consumers and businesses, Economy Minister Robert Habeck said after raising the country’s gas risk level to the second-highest “alarm” phase.
Europe’s largest economy faces the unprecedented prospect of businesses and consumers running out of power.
Lithuania Accuses Moscow of Propaganda Battle (3:55 p.m.)
Lithuania accused Moscow of waging a propaganda battle and taking a threatening stance in a standoff over Vilnius restricting the transit of sanctioned goods to the Russia’s exclave of Kaliningrad.
Food Crisis Could Last Two Years, Western Officials Say (4:08 p.m.)
Even if Russia’s war on Ukraine ended tomorrow, the current food crisis could last another two years or more, Western officials said in a briefing. It’s possible an agreement on shipping grain from Ukraine’s ports could be reached within the next month, though if that happens, it will still take time to de-mine ports and get them back up and running.
Officials are working with the UN Food and Agriculture Organization and the International Grains Council to look at having an investigation into allegations that Russia is stealing grain from occupied areas of Ukraine, though they said it’s hard to track because reports are coming from the country’s east, where there’s no international presence.
Italy Won’t Trigger Emergency Gas Alert Yet (3:29 p.m.)
Italy is “much better off than other countries” on gas reserves and sees no need to copy Germany’s move to increase the alert on supplies, Energy Minister Roberto Cingolani told reporters in remarks quoted by Radiocor.
His comments follow Germany’s decision to raise the country’s gas risk level to the second-highest “alarm” phase. Still, Italy’s approach could shift, Cingolani said, adding, “The impact of the war is unpredictable, what Russia is doing is unpredictable.”
Italy’s gas storage is 55% full, he said. Italy has mandates from energy companies including Snam Spa to stock up as soon as possible to reach a 85% to 90% level by the end of the year. Most EU members have more gas in storage now than is normal at this time of year, Josep Borrell, the EU’s foreign policy chief, said in Brussels.
US Long-Range Rocket Launchers Arrive in Ukraine (2:47 p.m.)
US high mobility artillery rocket systems, or HIMARS, have arrived in Ukraine, Defense Minister Oleksii Reznikov said in a tweet.
The delivery is part of an effort to provide heavy weapons to Ukraine to counter Russia’s firepower. President Joe Biden promised the HIMARS as part of an announcement of new military aid this month.
HIMARS have a “recognized and proven range up to 300 kilometers” (186 miles) according to their manufacturer, Lockheed Martin.
Zelenskiy Calls on Israel to Do More (13:30 p.m.)
The Ukrainian president said he regretted Israel’s reluctance to join sanctions against Russia in a video address to The Hebrew University of Jerusalem community. While thanking Israel for medical aid, Zelenskiy said there was a lack of support to help Ukraine defend itself. Israel has significant ties with both Russia and Ukraine, and its government has been adopting a neutral stance since Putin’s invasion.
Kremlin Says Peace Possible if Kyiv Accepts Demands (12:40 p.m.)
Russia is ready to agree to a peace deal with Ukraine if it accepts all of Moscow’s demands, President Vladimir Putin’s spokesman said. “As far as the peace plan is concerned, it’s only possible after Ukraine fulfills all the conditions of the Russian side,” Dmitry Peskov told reporters on a conference call on Thursday, Interfax reported.
Negotiations between Russia and Ukraine on a cease-fire and peace deal have been effectively frozen since April. In addition to demanding that Kyiv give up its ambitions to join NATO and declare its neutrality, Russia wants to keep territory it’s captured since its February invasion of the neighboring state.
EU Council President Expects Ukraine Candidacy Status (9:50 a.m.)
Charles Michel is “confident” that European leaders will grant Ukraine and Moldova EU candidacy status today. “This is a decisive moment for the European Union,” the president of the European Council told reporters in Brussels before the start of a two-day summit. “Today’s decisions will impact our future, our stability, security and prosperity.”
Europe’s Offshore Wind Industry in Major Ramp-Up (9:44 a.m.)
Dutch power grid operator TenneT Holding BV has launched a tender to build the infrastructure that will speed the construction of North Sea wind farms as Europe looks to cut its dependence on Russian energy imports.
The company plans to enter agreements worth as much as 30 billion euros ($31.7 billion), a sign that Europe is following through on plans to rapidly ramp up renewable power.
Europe’s Top Economies Slow Significantly (9:40 a.m.)
Growth in Germany and France slowed sharply as manufacturers suffered from a dearth of demand, increasingly strained supply chains and surging prices.
Reports on Thursday signaled that, for now, economic activity is still being supported to some extent by workloads built up earlier in the year. But the range of challenges confronting the world economy has led to worries that a recession is on the horizon.
European stocks fell on Thursday, with miners and energy firms leading the decliners in the Stoxx Europe 600 Index.
Germany’s a Step Closer to Gas Rationing (9:35 a.m.)
German Economy Minister Robert Habeck will trigger the second stage of the country’s three-phase gas-emergency plan later on Thursday, moving Europe’s biggest economy to the “alarm” level following steep cuts in supplies from Russia, according to a person familiar with the plan.
The heightened alert gives the government the option of enacting legislation to allow energy companies to pass on cost increases to homes and businesses, while some coal-fired power plants could also be reactivated to help minimize gas consumption. The third and highest “emergency” level would involve state control over distribution.
Ukraine’s EU Membership Timeline Depends on War, Reform (9:00 a.m.)
Kyiv sees “positive trends” for Ukraine to get EU candidate status, Zelenskiy’s deputy chief of staff, Ihor Zhovkva, said in an interview on Bloomberg Television as the bloc’s summit kicks off.
“Ukraine should become a candidate country for EU membership and then move further on the path to the integration with the European Union,” Zhovkva said. He warned that negotiations might be tough and difficult. While much depends on the course of the war, the pace of reforms will also be critical, he said.
Zhovkva said Moscow would need to withdraw its troops to the lines of Feb. 23 to resume diplomatic talks. There are no talks planned between Ukraine’s Zelenskiy and Russian President Vladimir Putin.
Russia Faces Fresh Bond Deadline (6:00 a.m.)
Another pressing Russian bond deadline looms Sunday night on previously missed payments from late May. Those funds — about $100 million of bond coupons — are stuck due to international sanctions and the grace period to find a solution expires at the end of June 26. At that point, Russia will effectively be in default, unless it somehow gets payments through to sufficient holders of the debt.
Billions of dollars of energy revenue pour into Kremlin coffers each week but the country has failed to meet the deadlines because mounting sanctions are cutting off avenues to transfer the cash.
Read more: Russia Faces Fresh Bond Deadline With Possible Default Days Away
Megayachts Running Low on Safe Harbors (1:00 a.m.)
Russian tycoons are running out of places to park their floating palaces, four months after their country’s invasion of Ukraine. The US and Europe are going after their superyachts, villas and other assets because of their ties to Russian President Vladimir Putin. Already, more than a dozen boats worth more than $2.25 billion have been seized by the US, EU nations and willing allies — such as Fiji.
Fearful of having their yachts seized, owners have sent them to a small number of locales still considered friendly — allowing the vessels to dock or hang around unbothered — including Dubai in the United Arab Emirates, Turkey and the Maldives, according to Spire Global Inc., a data and analytics firm that uses satellite technology to track maritime activity.
Read more: Megayachts Running Low on Safe Harbors as Russia Sanctions Bite
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