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UKRAINE UPDATE: 31 MARCH 2022

Russia redeploys troops in push to take Donbas; Biden pledges more aid

Russia redeploys troops in push to take Donbas; Biden pledges more aid
A Ukrainian serviceman shoots mortar not far from Kyiv, Ukraine, on 30 March 2022. (Photo: EPA-EFE / STR)

Russia said it’s regrouping its forces in Ukraine in a push to complete the takeover of the eastern Donbas region, a sign that Moscow isn’t slowing all military activity despite a pledge to cut operations near Kyiv and Chernihiv.

“The goal of the redeployment of the Russian armed forces is to activate operations in the priority directions, first of all, the completion of the full liberation of Donbas,” Russian Defence Ministry spokesman Igor Konashenkov said in a statement. He said that forces near Kyiv and Chernihiv had fulfilled their main goals of tying down Ukrainian forces.

Russia on Tuesday announced it was cutting operations in those areas in what it called an effort to build confidence amid talks on a possible ceasefire. Ukraine and its Western allies said the move appeared to be merely an attempt to buy time since Russia had failed to gain ground against Ukraine’s military. 

US President Joe Biden promised $500-million in direct US aid to Ukraine in a call on Wednesday with President Volodymyr Zelensky. 

Key developments

Germany says Putin agrees to keep taking euros for gas 

Germany said Russian President Vladimir Putin has indicated that European nations can continue paying for Russian gas in euros, despite a previous demand for rouble payments.

After German Chancellor Olaf Scholz spoke with Putin on Wednesday, a German government spokesman said that Putin told Scholz that “the payments would continue to be made exclusively in euros” to Russia’s Gazprom bank and would then be converted into roubles. Scholz asked for “written information in order to understand the procedure more precisely”. The Kremlin said only that Scholz and Putin agreed that their experts would discuss the issue.

Italian Prime Minister Mario Draghi also spoke with Putin on Wednesday on the issue, as French President Emmanuel Macron did a day earlier. The countries are among the European Union’s largest consumers of Russian gas, and the calls may signal a sense of alarm in Europe about a potential cut-off. Energy ministers from the Group of Seven nations this week rejected the demand to pay in roubles, which officials say violates contract terms.

South Ossetia says it’s seeking to join Russia 

The breakaway Georgian region of South Ossetia will take legal steps to join the Russian Federation, its President Anatoly Bibilov said in an address posted on the Russian ruling party’s website.

Only a handful of countries, including Russia, Syria and Nauru, have recognised South Ossetia since it declared independence after Russia’s 2008 war with Georgia. Russia last annexed a territory in 2014, when it seized Crimea from Ukraine.

Biden pledges more aid in call with Zelensky 

President Joe Biden spoke to Ukraine’s President Volodymyr Zelensky for about an hour on Wednesday, and pledged “$500-million in direct budgetary aid” from the US, according to a White House statement.

They discussed how the US is “working around the clock to fulfil the main security assistance requests by Ukraine” and “continued efforts by the United States with allies and partners to identify additional capabilities to help the Ukrainian military defend its country”, according to the statement.

Zelensky said on Twitter that they shared an “assessment of the situation and at the negotiating table” as well as “specific defensive support, a new package of enhanced sanctions, macro-financial and humanitarian aid”. 

Biden on Monday cast doubt on the prospects for a Russian pullback in Ukraine, despite the Kremlin signalling it planned to scale down military operations around Kyiv.

 

 

 

Blinken says Putin is being given bad intelligence on the war 

US Secretary of State Antony Blinken said Russian President Vladimir Putin is being given bad intelligence because those around him are afraid to deliver bad news.

“One of the Achilles’ heels of autocracy is that you don’t have people in those systems who speak truth to power or who have the ability to speak truth to power,” Blinken told reporters during a visit to Algiers. “And I think that is something that we’re seeing.”

US intelligence officials have come to the same conclusion, according to an unidentified official cited by the Associated Press. The official said a recently declassified intelligence finding concluded that Putin has felt misled by the Russian military and that there’s now persistent tension between him and senior Russian defence officials. It found that Putin wasn’t aware that conscripts were being sent to Ukraine or the extent of damage to the Russian economy from sanctions imposed by the US and allies, according to the AP.

Johnson questions Macron’s talks with Putin 

British Prime Minister Boris Johnson questioned the value of French President Emmanuel Macron’s efforts to persuade Vladimir Putin to engage in a ceasefire.

“The question of negotiations with Vladimir Putin – the value of those negotiations – is an open one,” Johnson told a panel of members of Parliament in London. “My view is that plainly Putin is not to be trusted.”

Johnson also said the UK is examining supplying armoured Land Rover vehicles to Ukraine as it is “looking at going up a gear” with its support. Asked about when sanctions against Russia could be lifted, he replied, “I certainly don’t think you could expect the G7 to lift sanctions simply because we had a ceasefire in Ukraine”, but refused to be drawn on whether Russia would have to withdraw from Crimea, which it annexed in 2014.

EU may tighten sanctions next week  

The European Union may agree as early as next week on a new set of measures to tighten existing sanctions against Russia and strengthen their enforcement.

The measures could include sanctioning banks that the EU has cut off from the international payments system Swift, including state-controlled VTB, but hadn’t yet applied other restrictions to, according to people familiar with the preparations who asked not to be identified because the talks are private.

The bloc is also looking to add more people to its listings as it continues to go after Russian tycoons and their associates. The Wall Street Journal reported earlier on the timing of the possible sanctions.

Russia’s internet giant risks running out of key tech 

Russia’s omnipresent tech company, which created products ranging from the country’s dominant search engine to its biggest ride-hail service, is facing a shortage of hardware due to US sanctions.

Yandex may run short of semiconductors needed for its servers within a year to 18 months because of import restrictions, two people with direct knowledge of the issue said. Sanctions on dual-use technology, which have both military and commercial uses, have hit its self-driving vehicle unit particularly hard, they said.

Yandex has plunged into crisis since Putin began the war, caught between the Kremlin’s increasingly harsh internet censorship and a backlash in its key foreign markets.

Russian negotiator says Ukraine agreeing to key demands 

Vladimir Medinsky, Russia’s chief negotiator, struck an upbeat tone on the results of Tuesday’s talks, saying that the written offer Ukraine presented “for the first time showed readiness to fulfil a whole range of the most important conditions” set by Moscow, state-run Tass news service reported.

Medinsky specifically cited Kyiv’s willingness to agree to give up its ambition to join Nato, as well as declare its neutrality and commit not to obtain nuclear weapons. But he reiterated that Moscow refuses to discuss the status of Crimea, which Moscow annexed from Ukraine in 2014. Kyiv had sought talks on the issue as part of the peace deal.

Earlier on Wednesday, Kremlin spokesman Dmitry Peskov said this week’s talks had yielded no breakthroughs and that much work remains to be done before a deal could be possible.

 

 

 

Germany is talking about giving Ukraine a security guarantee  

Government spokesman Steffen Hebestreit said that Chancellor Olaf Scholz signalled in several phone calls with Ukrainian President Volodymyr Zelensky that Germany has a “general willingness” to act, together with other countries, as a security guarantor. He added, though, that this is still at a “very early” stage because there is not even a ceasefire yet.

AerCap insurance claims signal a looming battle

AerCap Holdings, the world’s largest aircraft-leasing firm, filed insurance claims totalling about $3.5-billion tied to jets and engines stuck inside Russia that it hasn’t been able to recover since the invasion of Ukraine.

The size of the claim – greater than Dublin-based AerCap’s exposure to potential asset writedowns – signals a looming battle with insurers, including Lloyd’s of London, which dominates the market, over who shoulders financial losses caused by the war.

Zelensky says Russia is sending reinforcements to Ukraine 

Russia is deploying new forces for fighting in Ukraine, President Volodymyr Zelensky said in a speech to Norway’s Parliament, without specifying the time frame.

“We have to do more to stop this war and first and utmost is weapons,” Zelensky said via video link from Ukraine. He added that the Russian military has mined the Black Sea to blockade Ukrainian ports, endangering marine traffic.

Ukraine calls on marine insurers to withdraw Russia coverage  

Oleg Ustenko, the chief economic adviser to Zelensky, urged a group of shipping insurance specialists in a letter to withdraw coverage in a bid to reduce cash flowing into Russia from international buyers of its energy.

The letter was sent to the International Group of P&I Clubs, a collection of insurance associations which say they provide marine liability coverage for around 90% of sea-bound cargo. The club’s members have insured 363 vessels carrying oil, gas and coal from Russian ports since the invasion of Ukraine began, the letter said.

Kremlin downplays talks, delays rouble gas payments  

Talks with Ukraine in Istanbul yielded “no breakthrough”, Kremlin spokesman Dmitry Peskov told journalists a day after peace talks in Istanbul, adding that much work remained to be done. He said Ukrainian negotiators’ willingness to provide specific proposals on paper was “positive”.

Peskov also told reporters that the process of switching to roubles payments for Russian gas export deliveries would take time and won’t begin immediately this week despite a March 31 deadline in a presidential order on the issue. “This process is more drawn out in time technologically,” he said.

Russia’s exports of refined fuels are sliding fast as buyers stay away following the invasion of Ukraine, denting supplies in a market that’s already fretting over stockpiles.

Europe tallies up economic fallout from war 

The economic damage from the war in Ukraine is worsening across Europe as already-record inflation soars further and Germany faces a danger of recession because of its dependence on Russian energy.

In Spain, inflation surged by almost 10% in March – the most in nearly four decades – while advisers to Chancellor Olaf Scholz slashed Germany’s growth outlook.

 

 

 

Ukraine refugees top four million 

More than four million refugees from Ukraine have fled after five weeks of fighting, according to the United Nations refugee agency. Filippo Grandi, the UN high commissioner for refugees, said he’s in Ukraine now to meet with officials in the western city of Lviv. 

Overall, some 10 million people in Ukraine have been forced from their homes.  

Poland to shun Russian energy supplies this year  

Poland plans to “do everything” to stop importing Russian oil and gas by the end of 2022, Prime Minister Mateusz Morawiecki said at a news conference. The European Union’s largest economy outside the euro will also halt coal purchases from Russia by April or May, he said. 

The premier has called on the EU to tax Russian hydrocarbon imports in order to limit Russia’s ability to build its army and attack neighbouring countries.

UK says sanctions to stay until troops leave Ukraine 

UK Deputy Prime Minister Dominic Raab said sanctions on Russia will remain until the nation withdraws its troops from Ukraine.

“The sanctions are there to tighten the grip on Putin’s war machine and until the invasion is withdrawn – and I think that would need to be entirely or on a verifiable basis – I don’t think the sanctions can or should be lifted,” Raab told BBC radio in London.

Attacks continue near Kyiv, Ukraine says 

Fighting continued north and west of Kyiv, despite Russia’s declaration it would pull its forces back. Russian forces shelled targets in several cities, including Hostomel, Bucha and Makariv and there were skirmishes in villages along the main westbound highway out of the capital, according to Ukraine’s defence ministry. 

Russian forces also shelled the northern city of Chernihiv overnight, damaging civilian structures including libraries and shopping centres, according to Vyacheslav Chaus, the region’s governor, who said he was sceptical of Russia’s promise. “Do we believe this? Surely not,” he said in a video statement. 

Rouble recovers as Moscow stocks rebound

Russia’s rouble strengthened for a third straight day, edging closer to wiping out the steep losses it incurred in the weeks after Putin sent troops into Ukraine. Stocks in Moscow climbed as much as 3.5% as oil and gas producers rallied. Crude oil rebounded after two days of gains, while stocks in Europe slipped along with US equity futures.

Germany triggers emergency plan for energy supplies 

Germany activated an emergency plan to secure supplies of natural gas on concern the war in Ukraine could disrupt shipments from Russia. A task force will be established that will meet on a daily basis to monitor the situation and Economy Minister Robert Habeck urged companies and consumers to help by reducing energy consumption wherever possible.

Ukraine pushes for more humanitarian routes 

Ukraine proposed that Russia should agree to establish humanitarian corridors in 97 areas that have suffered war damage, Deputy Prime Minister Iryna Vereshchuk said in a video statement. As of Wednesday, three such corridors have been agreed upon, leading from Mariupol, Melitopol and Energodar.

India eyes new rouble payments for Russian oil  

India is considering a proposal from Russia to use a rouble-based system developed by the Russian central bank for bilateral payments as the Asian nation seeks to buy oil and weapons from the sanctions-hit country. India is keen to continue bilateral trade due to its dependency on Russian weapons and the prospect of buying cheaper oil as global prices surge. Lavrov arrives in India for a two-day visit Thursday.

Russia proposes Swift alternative to India for rouble payments

Apartment buildings hit in Russian attack 

Russia shelled residential buildings in Lysychansk in the Ukraine-controlled part of Luhansk, and several apartment buildings suffered significant damage, according to the region’s governor. Moscow also targeted the towns of Rubizhne, Kreminna and Zolote in the region overnight. 

The shelling in Luhansk also caused another 30,000 households to lose electricity and 34,000 households to stop receiving gas supplies.

Some Russian units return to Belarus, UK says 

Some Russian units that have experienced heavy losses are returning to Belarus to regroup, the UK Defence Ministry said in an update on Twitter. “Such activity is placing further pressure on Russia’s already strained logistics and demonstrates the difficulties Russia is having reorganising its units in forward areas within Ukraine,” the ministry said, warning that Russia is expected to continue launching missile and artillery attacks. 

Russian oil takes hit on exports, refining 

Three key indicators of Russia’s oil industry declined in the second half of March as appetite for the nation’s barrels dropped at home and abroad, according to data seen by Bloomberg. It indicates how international pressure over the war is affecting Russia’s energy industry, which accounts for some 10% of global crude production. 

Only a handful of nations have imposed explicit bans on imports from Russia, but many traditional customers are looking elsewhere amid condemnation of its military aggression. 

Russian foreign minister in China 

Lavrov is set to participate in a meeting of foreign ministers of countries bordering Afghanistan, Interfax reported last week. 

He is also set to visit India on Thursday to discuss the sale of Russian crude to the country and the possibility of a rupee-rouble denominated payment method that could work outside the Swift messaging system.

Russian foreign minister lands in China on first visit since war 

US warns citizens of detentions 

The US State Department warned its citizens that Russian government security forces in Ukraine and Russia may “single out and detain” them – reissuing travel advisories for both countries that called on Americans to depart immediately. 

Zelensky sees ‘positive’ signals in peace talks 

There are some “positive” signals from the latest round of peace talks, though those signals “won’t drown out the explosions of Russian shells”, Ukrainian President Volodymyr Zelensky said in his daily video address to the nation. 

The Ukrainian president again ruled out any compromise over Ukraine’s sovereignty and territorial integrity in the negotiations and said the issue of easing sanctions on Russia can’t be raised before the war is over.  

Threat to Kyiv hasn’t faded, says Pentagon 

The threat to Kyiv isn’t over despite Russian talk of pulling back, because Putin’s goals continue to stretch well beyond the eastern Donbas region, Pentagon spokesman John Kirby told reporters.

“Nobody should be fooling ourselves by the Kremlin’s now recent claim that it will suddenly just reduce military attacks near Kyiv or any reports that it is going to withdraw all its forces,” Kirby said. It’s “a repositioning, not a real withdrawal” from positions around the Ukrainian capital. DM

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