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Ukraine update: EU set to boost military aid by €500m...



EU set to boost military aid by €500m; Zelensky calls latest Russian strike an ‘act of terrorism’

Firefighters, rescuers, police and the military work at the site of a missile strike in downtown Vinnytsia, westcentral Ukraine, on 14 July 2022. At least 21 people, including three children, were killed.(Photo: EPA-EFE / Roman Pilipey)
By Bloomberg
15 Jul 2022 0

Russian forces continue to hit civilian targets far from the front lines and with little apparent military significance. As rescue efforts wound down from a weekend strike in Chasiv Yar that killed 48, missiles hit the central Ukraine city of Vinnytsia on Thursday. An estimated 23 people were killed, including three children.

President Volodymyr Zelensky called the latest Russian strike on a Ukrainian city “an open act of terrorism” and later, in a video address at The Hague, called for international accountability for Russian actions.  

EU member states are set to agree on €500-million more in military aid to Ukraine when the bloc’s foreign ministers meet on Monday, taking the total to €2.5-billion. 

Key developments

On the ground

Almost five months into the war, Moscow’s forces have repeatedly hit civilian targets in the past week. At least 23 people, including three children, were reported dead and dozens are injured or unaccounted for after three missiles hit Vinnytsia, about 250km southwest of Kyiv, Governor Serhiy Borzov said. The Kalibr missiles were launched from the Black Sea; residential buildings and a medical centre were among the structures destroyed. Russian forces continued shelling the Slovyansk area, according to a Ukraine General Staff statement. Russia also struck the Dnipro region further west overnight, the regional governor, Valentyn Reznichenko, said on Telegram.   

UN secretary-general ‘appalled’ by civilian toll in Vinnytsia 

United Nations Secretary-General António Guterres “is appalled by today’s missile attack against the city of Vinnytsia in central Ukraine,” his spokesman said in a statement. “The secretary-general condemns any attacks against civilians or civilian infrastructure and reiterates his call for accountability for such violations.”

EU set to boost Ukraine weapons financing again 

European Union member states are set to agree on €500-million more in military aid to Ukraine when the bloc’s foreign ministers meet on Monday, said people familiar with the matter.

That would bring the total arms financing to €2.5-billion. The bloc in recent months has agreed to several rounds of arms financing for Ukraine under the so-called European Peace Facility, which reimburses governments for military deliveries to Ukraine.  

Russia’s central bank resists calls for local management of foreign banks  

Russia’s central bank is resisting calls from some officials and businesses to take over the management of foreign lenders’ local units, Reuters reported. 

The Bank of Russia is concerned such a takeover could lead depositors to withdraw funds, Reuters reported. Foreign banks, including Raiffeisen, UniCredit and Citi, accounted for 11% of Russian banking capital at the end of 2021.

Zelensky demands tribunal for Russian accountability  

Ukraine’s president demanded that Russian individuals face “a mandatory and principled punishment” in an address to the Ukraine Accountability Conference at The Hague, hosted by the Netherlands. 

“Existing judicial institutions for jurisdictional reasons cannot bring to justice all of those guilty,” he said. “That is why we need a Special Tribunal regarding this crime — Russian aggression against Ukraine.”

An instrument for “compensation for all damages” at the expense of Russian assets should also be set up, he said. 

Russia says Ukraine must accept loss of territory 

Ukraine must be a neutral, non-nuclear state and accept “existing territorial realities” in Crimea and the Donetsk and Luhansk regions as part of any future peace agreement, Russian Deputy Foreign Minister Andrey Rudenko told the Interfax news service.

Russia annexed Crimea in 2014 and recognised the so-called Donetsk and Luhansk peoples republics as independent a few days before its February 24 invasion of Ukraine.

Kyiv has repeatedly ruled out territorial concessions. Peace talks between the two sides early in the war broke down without agreement. Rudenko said Moscow is willing to resume negotiations but “will first of all insist on receiving a clear answer” to its demands.




Brent crude back at pre-war levels  

Oil dropped to levels not seen since before Russia’s invasion of Ukraine as record US inflation and disappointing earnings from Wall Street intensified fears of a recession. 

The global crude benchmark fell as much as 5.1% to trade under $95 a barrel, touching its lowest level since late February.

Grain fields aflame latest threat to Ukrainian farmers 

Fields of grain in parts of southern Ukraine have been destroyed as a result of Russian shelling, according to local officials. 

The attacks have sparked fires, wrecking crops due for harvest in parts of the Mykolayiv and Odesa regions, a spokeswoman for the southern command of Ukraine’s military, said this week.  

EU mulls over lifting sanctions on some Russians 

The European Union is in discussions about removing sanctions it imposed on some Russian individuals over their involvement in Moscow’s war in Ukraine after the bloc’s lawyers found that the penalties may have been imposed on weak grounds, according to people familiar with the matter.

Some 30 individuals have taken the EU to court, asking to be removed from the sanctions lists, and about another 10 have asked the EU directly to be removed, said the people.  

Russia, Ukraine see initial step forward in grain export talks  

Negotiations over unblocking millions of tons of Ukraine’s grain exports were constructive, according to Ukraine, the United Nations, Turkey and Russia, an initial step in bolstering global food supplies and aiding the country’s beleaguered farm sector.

The talks may resume on July 20-21, Tass reported, citing unidentified sources in Ankara.   

Macron says France must prepare for Russian gas cut-off  

France must prepare for the possibility that Russia cuts off gas, according to President Emmanuel Macron, who said his government will boost its search for alternative providers. 

Zelensky calls Russian attack on Vinnytsia ‘open act of terrorism’  

Ukraine’s president condemned the Russian attack on Vinnytsia in a statement posted on his Telegram account. 

“Every day, Russia destroys the civilian population, kills Ukrainian children, directs rockets at civilian objects,” he said. “What is this, if not an open act of terrorism?”

Ukrainian military spokesman Oleksiy Hronov said more than 30% of Russian strikes this week were aimed at civilian targets. Some 630 Kalibr and Iskander missiles had been aimed at cities, he said.

Latvia backs mandatory military service in face of Russian threat  

Prime Minister Krisjanis Karins told journalists Latvia will adopt mandatory military service for men ages 18 to 27 as the Baltic nation looks to shore up its defence amid tensions with neighbouring Russia, the Baltic News Service reported. 

On Thursday, the Latvian government agreed to tear down 69 Soviet memorials that it says glorify the Soviet and Nazi regimes. Parliament passed a law banning natural gas imports from Russia from 2023. 




Ukraine commander speaks to US’s Milley 

Ukrainian army commander-in-Chief Valeriy Zaluzhnyi said he’d spoken with Mark Milley, chairman of the US Joint Chiefs of Staff, to provide an update on hostilities. 

Kyiv’s forces continue to recapture ground in the direction of Kherson while repelling “massive enemy attacks” in the Donbas, Zaluzhnyi said on Facebook. 

EU’s Gentiloni warns of full gas shutdown 

European Union Economy Commissioner Paolo Gentiloni warned that the risk of a full shutdown of gas from Russia “has become more than just a hypothetical scenario for which we need to prepare”. Speaking in Brussels on Thursday, he said that “a storm is possible — but we are not there at the moment”.

Ukraine grain exports fall 40% this year 

Ukraine’s grain exports are running 40% below last year’s pace as the 2022-23 season kicks off, the latest figures from its agriculture ministry show. The downturn highlights the logistical constraints from the war, which has blocked the major Black Sea ports that typically account for the bulk of its crop sales abroad.

There have been some signs of improvement recently, with Ukraine accessing an additional route tapping ports on the Danube River and Romania reviving a railway link sooner than expected. Negotiations this week in Turkey with Russia and the United Nations also made progress, Ukrainian President Volodymyr Zelensky said. Still, a deal has yet to be reached.

Kernel, Astarta jump on signs of progress in grain export talks 

Shares in Ukrainian agriculture producers Kernel Holding and Astarta soared for the third day, as traders were encouraged by signals of progress in negotiations over unblocking grain exports by Russia. Kernel jumped 15% in Warsaw to 27.30 zloty per share to the highest since June 9. Astarta rose 12% to 27 zloty per share, the highest since June 7. 

War damps prospects as G20 finance chiefs meet 

An impasse on how to characterise the economic fallout from Russia’s invasion is hanging over prospects for an agreement on it and related issues as finance chiefs gather for the Group of 20 meetings in Bali.

Disagreements on the causes and ways to alleviate supply-chain and inflation crises stemming from the war are set to complicate efforts to settle on a communique at the end of the gathering on Saturday, according to people familiar with the matter. 

US and Ukraine discuss price cap on Russian oil 

US Deputy Treasury Secretary Wally Adeyemo and Ukrainian Finance Minister Serhiy Marchenko discussed progress made toward implementing a price cap on Russian oil, according to a White House readout.

The price cap would restrict revenue for Russia’s military while dampening the impact of the war on global oil and energy prices. The aim is an arrangement to ban, by the end of this year, the insurance and transport services needed to ship Russian crude and petroleum products unless the oil is purchased below an agreed price.

Read more: US, allies discuss capping Russian oil price at $40-$60 a barrel DM


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