The disruption of Ukrainian grain imports by Russian President Vladimir Putin’s forces amounts to a “real war crime”, EU foreign policy chief Josep Borrell said. The World Food Programme also said it was slashing refugee rations to cope with rising global hunger caused by the invasion. 

Leaders of the EU’s 27 member states will decide later this week on Ukraine’s application for candidacy to the bloc. Some member states that were initially sceptical about granting Ukraine candidate status have now voiced support, nudging it closer to the unanimous endorsement required.  

Key developments

• EU aims to finalise $9.5bn Ukraine loan package this week
• Germany plans coal reversal, gas funding to counter Russian cut
• Russia tightens EU gas grip as it rejects extra Ukraine transit
• Destroyed Russian tanks to be paraded across Europe by Ukraine
• China buys $7.5bn of Russian energy with oil at record

Russian troops capture the village of Metiolkine

Russian forces stormed pockets that remain under Ukrainian control in the eastern province of Luhansk, seeking to encircle troops near the cities of Lysychansk and Sievierodonetsk, Ukrainian Deputy Defence Minister Hanna Malyar said. Luhansk regional Governor Serhiy Haiday said Russian troops had captured the village of Metiolkine, southeast of Sievierodonetsk.  

Civilians are hiding around Azot chemical plant 

Haiday said that in Sievierodonetsk, Ukrainian soldiers only control the area surrounding the Azot chemical plant. Ukrainian deputy prime minister Iryna Vereshchuk said about 300 civilians are hiding near there.

Sweden, Finland discuss Nato bids with Turkey 

Senior officials from Sweden and Finland made some progress in talks with Turkey during a five-hour session at Nato’s headquarters in Brussels about security concerns that have prompted Ankara to block their applications to join the military alliance, according to Finland’s lead negotiator, Petri Hakkarainen.

“Clear progress was made on some issues and on others there’s still some way to go before a consensus can be reached,” he said in a statement, adding that the parties share a goal to continue talks as soon as possible.

Turkish President Recep Tayyip Erdoğan said last week the two countries had yet to take concrete steps to address his country’s concerns, which include their support of Kurdish PKK militants, leaving little hope that accession talks would start in time for a Nato leaders summit in Madrid next week. 

EU says Lithuania didn’t act alone on Kaliningrad 

The EU’s foreign policy chief said Lithuania had not taken any unilateral national action by stopping the transit of steel to the Russian exclave of Kaliningrad and had only implemented European Commission guidelines around EU sanctions.

“The land transit between Kaliningrad and other parts of Russia has not been stopped. There is no blockade,” Josep Borrell told reporters following a gathering of EU foreign ministers in Luxembourg. He said the EU would nevertheless verify the legal aspects around Lithuania’s measures.

No progress in talks to unblock Ukrainian ports 

Zelensky sees no movement in “difficult multilevel talks” to unblock Black Sea ports and allow grain to be exported, he said in an address to the Assembly of the African Union about Ukraine’s efforts to restore grain shipments and global food security.

A special tour by Ukrainian Foreign Minister Dmytro Kuleba to sub-Saharan African countries is being prepared, and Ukraine is seeking to establish direct cooperation with African countries, Zelensky said.

EU aims to finalise $9.5bn loan package 

The EU is expected to finalise the details of a €9-billion financial package for Ukraine in the coming days, with EU leaders scheduled to meet on Thursday and Friday in Brussels to discuss Ukraine’s reconstruction plan and its bid for membership in the bloc.

The European Commission first proposed the latest aid package in mid-May to cover part of Ukraine’s financial needs of around €5-billion per month. The Ukrainian government has been calling on its partners to transfer the funds as a matter of urgency, but the commission and Germany disagreed over the package’s design.  

Zelensky says half of Ukraine’s economy not working 

“Almost half of our economy and our economic system is not operational,” Zelensky said during an event in Milan, Italy, blaming the economic devastation on Russia’s invasion. Speaking virtually to the conference, Zelensky said it’s not possible to have a “normal economic life” in Ukraine.

“Just imagine what would it mean if half of the Italian economy would be blocked,” he said, calling again for richer nations to send more weapons to Ukraine and warning that the war may trigger a global food crisis.

Ukraine’s Parliament approves treaty needed for EU entry push  

Ukrainian lawmakers approved a European treaty to combat violence against women known as the Istanbul Convention, a requirement for the country’s efforts to join the European Union. 

The European Council will discuss Ukraine’s application for EU membership this week on June 23 and 24 after the European Commission recommended the country be granted candidate status.  

Ukraine to parade broken Russian tanks across Europe 

Ukraine is planning to tour an exhibition of destroyed Russian military vehicles across Europe, as it strives to maintain public attention on the conflict. The exhibition will launch in Warsaw before moving on to Berlin, Paris, Madrid and Lisbon, Defence Minister Oleksii Reznikov said.

Ukraine claims Russia lost some 1,477 tanks and 3,588 armoured vehicles since the invasion began in February. Some of the missiles, burnt Russian tanks and other military vehicles are currently being displayed in downtown Kyiv.

Russia demands Lithuania unblocks Kaliningrad  

The Foreign Ministry in Moscow summoned Lithuania’s envoy to declare its “strong protest” over the Baltic country’s ban on the rail transport of a large number of goods to Russia’s Kaliningrad exclave.

Lithuania announced it would stop the transit of steel and other goods made from iron ore to Kaliningrad in accordance with EU sanctions. Russia demanded Vilnius immediately rescind the order and said it “reserves the right to act to protect its national interests”.

Lithuania responded by summoning an official from Russia’s embassy and rejecting the accusations that it’s blocking transit of unsanctioned goods and passengers across its territory to Kaliningrad.

Russia tightens EU gas grip 

Russia rejected an offer from Ukraine to book more transit capacity to compensate for reduced flows through a key pipeline to Germany.

It’s another sign that supplies from Moscow may remain curbed for weeks after the nation cut fuel shipments through the Nord Stream pipeline, its biggest gas route to the European Union, to just 40% of its capacity. 

The squeeze caused gas prices to surge, adding pressure to EU member states already battling surging inflation.

Russia needs turbines to supply gas to EU 

Russia has enough natural gas and is ready to supply the European Union, but the bloc has to return Nord Stream turbines after maintenance, Interfax reported, citing Kremlin spokesman Dmitry Peskov.

The reason for lower gas supplies from Russia via the Nord Stream pipeline is the lack of turbines and the current crisis is created by the EU, Peskov said.

European Central Bank sees Ukraine refugees boosting the labour force  

Refugees fleeing the war could boost the euro area’s active labour force by up to 1.3 million people, the European Central Bank predicts. 

“Back-of-an-envelope” calculations point to a jump of 0.2% to 0.8% over the medium term, the institution said in an economic bulletin published on Monday – corresponding to between 0.3 million and 1.3 million workers.

 ECB sees Ukraine refugees lifting workforce by up to 1.3 million

Refugee rations cut as war worsens hunger  

The World Food Programme is cutting food rations for refugees by as much as half, as it faces a hunger crisis worsened by the war in Ukraine and funding constraints. 

“We are being forced to make the heartbreaking decision to cut food rations for refugees who rely on us for their survival,” WFP Executive Director David Beasley said on Monday. 

Food prices are near a record high after Russia’s invasion of Ukraine sharply reduced Kyiv’s key exports of grain and vegetable oil, adding to price pressures from logistics snarl-ups and a rebound in demand after the pandemic.

European gas rises further as Russian cuts bring rationing risk

Russia plans return to local debt market  

Russia intends to return to the local debt market with a limited amount of bonds next year and plans to more than double the volume in 2025, according to budget guidelines seen by Bloomberg.

The government targets net borrowing of 1.1-trillion roubles ($19.4-billion) to finance the fiscal deficit next year, rising to 1.4-trillion in 2024 and jumping to 2.4-trillion in 2025, the guidelines show. The Finance Ministry didn’t immediately respond to a request for comment.

Erstwhile sceptics back Ukraine’s EU bid 

EU nations initially sceptical about granting Ukraine candidate status voiced their support on Monday, making it likely the war-torn country will clinch an endorsement when leaders gather in Brussels later this week.

Dutch Foreign Minister Wopke Hoekstra said his government would support a proposal presented by the European Commission on Friday to grant Ukraine and Moldova immediate candidate status. Speaking to reporters ahead of an EU foreign ministers meeting, Hoekstra said the proposal was “balanced” and unity was of utmost importance given Russia’s war in Ukraine.

German Foreign Minister Annalena Baerbock also said the time was right to push ahead with Ukraine’s candidacy. “I am convinced that it’s our responsibility now to show Ukraine that they don’t only belong to Europe and that we thank them for defending European values, but to accept them into our European circle,” she said.

Borrell: Blocking Ukraine grain a ‘war crime’  

The EU’s foreign policy chief slammed Russia’s blockade of Ukrainian grain exports as a “real war crime” and said UN efforts to get supplies out of the country were advancing. 

Borrell said EU sanctions were not to blame for soaring grain prices as Russian food and fertiliser fell were not subject to penalties. 

“I hope nobody will be able to resist the pressure of the international community,” he said. “One cannot imagine that millions of tonnes of wheat remain blocked in Ukraine while in the rest of the world people are suffering from hunger.”

French Foreign Minister Catherine Colonna echoed those concerns, calling on Russia to stop “playing with hunger in the world, to stop its blockade of Ukrainian ports and to stop destroying Ukrainian cereal infrastructure”.

Poland open to US plan to build silos 

Poland is ready to work with the US to build temporary silos for Ukrainian grain, with the decision expected within weeks, Rzeczpospolita newspaper reported. 

The project would take three to four months to complete, it said. President Joe Biden said on Monday he was working closely with EU partners to build temporary silos along the Ukraine border and some in Poland to get much-needed grain out. DM