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Ukraine update: US asks first lady Zelenska to address...

World

UKRAINE UPDATE: 19 JULY 2022

US asks first lady Zelenska to address Congress; Putin admits Russia faces ‘colossal’ hi-tech challenges

A man gestures after climbing on top of a burnt Russian military vehicle exhibited on St Michael's Square on 17 July 2022 in Kyiv, Ukraine. (Photo: Alexey Furman / Getty Images)
By Bloomberg
18 Jul 2022 0

President Vladimir Putin said that Russia is facing ‘colossal challenges’ in the hi-tech sector, an unusually frank admission of the difficulties the Kremlin is experiencing as sanctions begin to bite.

US House Speaker Nancy Pelosi invited Olena Zelenska, Ukraine’s first lady, to address Congress on Wednesday. 

The European Union, which boosted military financing for Ukraine on Monday, is also set to approve some additional sanctions measures, including a ban on Russian gold. The EU’s foreign policy chief, Josep Borrell, said the EU must be prepared to deal with a cutoff of Russian gas. He also said he was hopeful Russia and Ukraine could clinch a deal this week to help export grain from the war-torn country.  

Key developments 

On the ground

Russia ordered its troops to step up combat in all areas and target Ukraine’s long-range weapons. Ukraine has used advanced US-supplied Himars systems to strike Russian logistics centres, supply routes and ammunition depots behind the front lines in recent weeks. A Russian missile ruined an elevator with more than 5,000 tonnes of grain in the Dnipropetrovsk region, local governor Valentyn Reznichenko said on Telegram. Russian missiles also hit a military facility and a bridge across the Dniester estuary west of Odesa, Natalia Humeniuk, a spokeswoman for the Ukrainian military’s southern command said.  

First lady to address US Congress on Wednesday 

Olena Zelenska, the first lady of Ukraine and wife of President Volodymyr Zelensky, was invited to address the US Congress on Wednesday by Speaker Nancy Pelosi.

The day before her address, Zelenska, who met with US first lady Jill Biden during an unannounced visit to Ukraine in May, will accept a human rights award at the Victims of Communism Museum, according to a statement from the organisation.

Borrell urges EU to prepare for gas cut-off 

A gas cut-off from Russia would pose a major hurdle but the EU is ready to deal with the consequences, the bloc’s foreign policy chief, Josep Borrell, said following a meeting of EU foreign ministers in Brussels.

Borrell said the EU wasn’t considering new sanctions against Russia when it comes to gas but the bloc is discussing how to deal with a swift decrease in the supply of gas. “It’s not going to be an easy scenario, but we should be prepared for that,” he said.

Gazprom declares force majeure on some European gas buyers 

Gazprom declared force majeure on at least three European gas buyers, a move that may signal it intends to keep supplies capped, according to people familiar with the matter.

The Russian gas giant — which had already been curbing exports to Europe and closed its main pipeline for maintenance earlier this month — said in a letter dated July 14 that the legal clause applied to supplies over the past month, said the people.

Read more: Gazprom declares force majeure on some European gas buyers

EU estimates Russian gas halt to cut GDP by 1.5% in worst case 

A halt of Russian gas supplies to the EU could potentially reduce its gross domestic product by as much as 1.5% if the next winter is cold and the region fails to take preventive measures to save energy, according to new estimates from the bloc.

The European Commission is set to warn that, in the event of an average winter, a cut-off of gas shipments from Moscow would reduce the GDP by between 0.6% and 1%, says a draft EU document seen by Bloomberg News. The EU’s executive arm is planning a set of recommendations to member states to mitigate the impact of a possible full disruption by Russia, its biggest source of imports. 

Read more: Russian gas supply halt risks 1.5% cut to EU’s GDP in worst case

Putin says sanctions causing Russia ‘colossal’ tech woes 

Russia faces “colossal challenges” in high technology from international sanctions, but won’t simply give up or allow its economy to fall back by decades, Putin told officials during a videoconference on strategic development goals.

Instead, Moscow will “intensively” seek solutions by relying on the country’s own technological resources and the work of domestic innovative companies, the Russian president said, even as he chided the state-run Rostec corporation for failing to meet previous targets for the development of internet technology.

 

 

 

Russia fines Google $382m – Tass 

A Moscow court ordered the local unit of Alphabet’s Google to pay a 21.77-billion rouble ($382-million) fine for not removing content banned in Russia, Tass reported from the courtroom.

The fines, for repeated violations of orders to take down content deemed illegal, could be used as a pretext to block various Google services in Russia as the Kremlin cracks down on foreign tech companies.

Google’s local subsidiary filed for bankruptcy in June after authorities froze its local bank account amid escalating fines related to YouTube. However, it continues to offer free services, including search functions, YouTube, Gmail and Google Play. 

EU approves more Ukraine arms financing 

EU foreign ministers approved another €500-million in military aid to Ukraine, boosting the total arms financing to €2.5-billion. It’s the fifth round of financing under the so-called European Peace Facility, which reimburses governments for military deliveries to Ukraine. 

Russia keeps gas buyers guessing 

Moscow again rejected additional gas-pipeline space offered by Ukraine, keeping European buyers guessing as future flows on the key Nord Stream route also remain uncertain.

At a monthly auction on Monday, Russia’s Gazprom opted not to book extra capacity to ship gas to Europe via Ukrainian pipelines in August. That keeps deliveries to the continent tight, just as concern grows that the Nord Stream link may not fully return when maintenance ends later this week.

Russia’s squeeze on gas supplies has unsettled the market, with European benchmark futures more than doubling in value this year. Last week, Germany started to withdraw gas from stockpiles that it had been building up for winter, while Hungary declared an “energy state of emergency”.

Russia turns the screws on gas market, snubbing transit bookings

Russia eyes cooperation pact with Iran 

Russia handed a draft comprehensive strategic cooperation treaty to Iran in mid-June and expects to sign it in the near future, Interfax quoted Russian presidential spokesman Dmitry Peskov as saying. 

It said some amendments were required taking into account Iranian opinion.

 

 

 

Russian former state TV staffer released 

Russian police released a former state-television employee after several hours of detention, charging her under a strict new law against criticising the Kremlin’s invasion of Ukraine.

Marina Ovsyannikova, who fled Russia earlier this year after being charged for holding up an anti-war sign on the main evening television news, has conducted several public protests since returning earlier this month for a child-custody hearing. On Friday, she stood across the Moscow River from the Kremlin, holding a homemade sign blaming President Vladimir Putin for the deaths of children killed in the war.

Police detained her on Sunday for making anti-war statements outside the trial last week of another activist facing jail time for his protests. Ovsyannikova’s lawyer, Dmitry Zakhvatov, said she was charged with an administrative violation, punishable with a fine.

Zelensky pledges security clean-up 

Kyiv pledged to clean up law-enforcement agencies after President Volodymyr Zelensky removed the country’s security chief and suspended its top prosecutor over allegations that dozens of staff were collaborating with Moscow. 

Ivan Bakanov, a childhood friend of Zelensky, was removed from his post as head of the State Security Service amid questions over how Russia managed to capture the southern region of Kherson. Iryna Venediktova, named prosecutor-general in 2020, is also a Zelensky ally and lawmaker on his party list. 

Andriy Smyrnov, deputy chief of Zelensky’s staff, said in televised comments on Monday that Ukraine would find anyone working with or leaking information to Russia. The president said last Sunday that 651 people were already facing trial on charges of treason and collaborating with the enemy. 

Russia-backed RT to get EU sanctions ruling 

RT, the Kremlin-backed TV network formerly called Russia Today, will get a July 27 ruling from the European Union General Court on whether its inclusion on the EU’s sanctions list over the Ukraine invasion was justified.

RT’s France unit told the court that the EU’s decision was a curb on press freedom that had no justification in law. The ruling date was announced on the court website.

Russia orders strikes on long-range arms 

Russian Defence Minister Sergei Shoigu ordered part of his forces to focus on destroying Ukraine’s long-range missile and artillery systems during a visit to the Vostok army group in the occupied east of the country.  

The order comes after Ukraine received advanced US-supplied Himars long-range artillery systems in recent weeks capable of striking Russian targets as far as 80 km away. That has allowed it to hit logistics centres, supply lines and ammunition dumps deep behind the front lines and mostly from beyond the range of Russian artillery.

Ukraine sees Russian forces struggling to find safe places to store munitions in occupied areas as they also increasingly lack transport to move them, Natalia Humeniuk, a spokeswoman for the Ukrainian military’s southern command said on television. 

EU’s Borrell hopeful on Ukraine grain export deal 

The EU’s foreign policy chief said he was hopeful Russia and Ukraine could clinch a deal this week to help export grain from the war-torn country and alleviate a growing global food crisis.

“I have a hope that this week it will be possible to reach an agreement to deblock Odesa and other Ukrainian ports,” Josep Borrell told reporters ahead of a meeting of EU foreign ministers in Brussels. “The lives of tens of thousands of people depend on this agreement. It’s not a diplomatic game.”

Turkish President Recep Tayyip Erdoğan has sought to broker a deal that would facilitate shipments of Ukrainian grain through the Black Sea and meet Vladimir Putin on Tuesday. 

H&M to exit Russia at $190m cost 

H&M will begin winding down its operations in Russia, having halted all sales in the country in March.

The Swedish fashion retailer expects to book costs of $190-million from the process, it said in a statement on Monday. It plans to reopen physical stores in Russia for a limited period of time to sell its remaining inventory.

“After careful consideration, we see it as impossible given the current situation to continue our business in Russia,” Chief Executive Officer Helena Helmersson, said.

Russian gas flows to Europe still limited 

Russian natural gas supplies to Europe remain curbed, with flows sent via Ukraine below capacity and the Nord Stream pipeline shut for annual maintenance until July 21.  

Russia ban seen tightening coal market 

A looming ban on Russian coal imports by the European Union will add to supply pressure that’s sent prices of the fossil fuel hurtling to a record, according to a key Australian producer.

The European ban that takes effect next month “is expected to tighten further the supply of high-quality thermal coal”, Sydney-based Whitehaven said in its statement. “We continue to view thermal coal prices as well supported for 2022 and into 2023.” DM 

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