(Bloomberg) — Ukraine’s economy will plunge by almost a third this year as the Russian invasion drags on, the European Bank for Reconstruction and Development said in a report forecasting a steeper decline than the 20% contraction it predicted in March.
The European Union is considering the issuance of joint debt to finance the country’s long-term reconstruction, which may end up costing hundreds of billions of euros, according to an EU official familiar with the plan.
U.S.
President Joe Biden signed into law a measure making it easier for Washington to send weapons and supplies to the government in Kyiv, while Congressional Democrats drafted a Ukraine aid package worth almost $40 billion, more than the $33 billion Biden requested from lawmakers last month.
(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)
Key Developments
- Biden Signs Lend-Lease Act to Speed Weapons Delivery to Ukraine
- Draghi Has Started Unpicking Decades of Italian Ties to Russia
- Putin’s Crackdown Pushes Independent Russian Media Into Crypto
- Germany Comes to Grips With Its Hard-Power Role in Europe
- Ukraine Bomb Shelters Help Parts Maker Keep VW and BMW Supplied
All times CET:
Oil Extends Slump as EU Softens Sanctions Proposals (8:34 a.m.)
Oil extended its biggest drop in more than five weeks after the European Union softened its proposed sanctions on Russian crude exports and as economic growth concerns weighed on sentiment.
West Texas Intermediate futures fell below $103 a barrel in Asian trading after sliding around 6% on Monday.
The bloc will scrap a proposed ban on EU-owned vessels transporting Russian crude after objections from members including Greece.
Independent Russian Media Turns to Crypto for Funding (8:10 a.m.)
Meduza, a prominent independent Russian-language news site, is soliciting donations via cryptocurrencies as President Vladimir Putin’s crackdown on the press and western sanctions made raising money in Russia impossible.
The site lost about a third of traffic after the Kremlin blocked its content in Russia and was forced to become creative in its fundraising to keep the lights on.
Data show that Meduza’s Bitcoin and Ether wallets listed on its website held crypto worth around $230,000 at current prices.
Munich Re Writes Down $740 Million Over War (7:56 a.m.)
Munich Re wrote down Russian and Ukrainian bonds in its investment portfolio and warned that the war poses “considerable uncertainty” to its outlook.
The German reinsurer cut the value of the securities by almost 700 million euros ($740 million) in the first quarter and recorded about 100 million euros in costs related to the conflict.
Putin’s invasion has forced a series of financial hits among reinsurers, in part because of Russia’s move to effectively impound planes leased from foreign lessors.
Swiss Re said earlier this month that it had set aside $283 million in reserves related to the war during the first quarter, and Hannover Re made additional provisions for possible losses in the low triple-digit million-euro range in the period.
Ukraine’s Economy to Shrink 30% This Year: EBRD (7:10 a.m.)
That forecast is more than previously expected and in a scenario where the war ends this year, the EBRD said.
Russia’s invasion has upended trade in energy, agricultural commodities and fertilizers and disrupted supply chains, resulting in slower growth across eastern Europe.
EU Eyes Joint Debt to Fund Ukraine Reconstruction (7:01 a.m.)
The long-term reconstruction could cost hundreds of billions of euros, according to an official familiar with the plan.
The bloc is also weighing using loans, guaranteed by member states, to provide urgent funds to Ukraine, which says it needs as much as $7 billion a month to fill a budget gap, said the official.
The European Commission will present a package addressing Ukraine’s financial needs on May 18.
Draghi Has Started Unpicking Decades of Italian Ties to Russia (6:52 a.m.)
Less than a week before Russia invaded Ukraine, Italian Prime Minister Mario Draghi was planning a trip to Moscow and discussing a possible increase in gas supplies with Russian President Vladimir Putin.
His approach is very different now.
What changed Draghi’s thinking was the increasing brutality of the war. He was particularly horrified by images of alleged war crimes in Bucha and other areas occupied by Russian troops, according to a person familiar with his thinking.
Draghi is set to meet Biden at the White House Tuesday.
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