The Kremlin had positioned the most experienced units from the Wagner military-contracting company near the town of Soledar in the eastern Donetsk region, according to Ukrainian operational command spokesman Serhiy Cherevatyi. Ukrainian forces were holding the line following 86 artillery attacks “of various calibre”, he said. 

The European Union sought to forge a common line with Nato as the 27-member bloc signed a joint declaration with the transatlantic military alliance. Nato Secretary-General Jens Stoltenberg said the accord solidified an EU defence that’s “complementary to and interoperable with Nato”. 

Key developments

• Russia’s budget gap surges to record as war hits finances 
• Ukraine’s inflation steadies on price cuts amid blackout fears
• Ukrainians rush to relocate businesses to Poland after invasion
• Russia to try to limit oil discounts with market principles 
• China scoops up rare Russian oil as top buyer boosts imports 

On the ground

Ukrainian forces repelled attacks near 13 settlements throughout the eastern Luhansk and Donetsk regions over the past day, including Soledar, the General Staff said in its morning update on Facebook. Ukraine’s Defence Ministry said the assault on Soledar followed previous unsuccessful attempts to capture it, resulting in heavy losses. 

Ukrainian president Volodymyr Zelensky said in his nightly address that the resilience of the Ukrainian troops allowed his country to gain additional time, noting that “there are almost no whole walls left” to defend the settlement. 

Russian forces also shelled civilian infrastructure in the cities of Kharkiv, Kherson, Kramatorsk and Ochakiv over the past day, the Ukrainian military said. 

Ukrainian troops to train in US on Patriot system 

Ukrainian troops will be brought to Fort Sill, an army training base in Oklahoma, as soon as this month for the extensive training required to operate the Patriot missile defence system, according to a US defence official.

The US announced in December that it was delivering one of the powerful but complex air-defence systems to Ukraine — and Germany said last week that it would provide another. The plan for training at Fort Sill was reported earlier by CNN.

German foreign minister visits city of Kharkiv 

German Foreign Minister Annalena Baerbock made an unannounced visit to the northeastern Ukrainian city of Kharkiv, from which Ukrainian forces pushed back Russian troops last year, in a show of solidarity to residents confronting a winter in war. 

Citing Ukraine’s aspirations to join the EU, Baerbock said in a statement she would discuss advances made by the country toward membership.  “The government wants to make concrete offers to strengthen the rule of law, independent institutions and the fight against corruption — as well as moving closer to meeting EU standards,” she said. 

Ukraine seeks to seize assets linked to Russian billionaire  

Ukraine’s Justice Ministry signalled that it aims to seize assets it claims are controlled by Russian oligarch Oleg Deripaska, filing a suit against him in the nation’s top anti-corruption court.

The government will seek to confiscate assets that Deripaska can influence directly or through intermediaries in Ukraine, the ministry said, accusing him of “supporting Russian President Vladimir Putin’s regime” and supplying military manufacturers. A spokesman for Deripaska, who doesn’t have direct or controlling stakes in entities that own the Ukrainian assets, declined to comment. 

Ukraine’s inflation steadies on price cuts amid blackout fears 

Ukraine’s wartime inflation steadied last month as retailers cut prices for perishable goods after Russian attacks on the nation’s power grid triggered concerns that staple foods would spoil. 

Consumer prices rose 26.6% versus a year earlier in December, the State Statistics Service said. The result was below the 27.4% forecast in a survey. A better-than-expected harvest of vegetables and fruits last fall also helped, the central bank said in a statement to Bloomberg. 

Russia’s budget gap surges to record as war hits finances 

Russia’s federal budget deficit widened to a record in December as revenues plunged amid restrictions on oil exports and spending on the invasion of Ukraine grew.

The fiscal gap reached a record 3.9 trillion roubles ($56-billion) last month, according to Bloomberg calculations based on preliminary government data released on Tuesday. That brought the full-year shortfall to about 3.3 trillion roubles, reversing a surplus in the first 11 months of the year. Finance minister Anton Siluanov later confirmed the full-year figure, which he said amounted to 2.3% of gross domestic product, in televised comments at a government meeting. 

EU plans new sanctions and signs accord with Nato

Ursula von der Leyen, the head of the European Commission, told reporters in Brussels that the bloc plans further sanctions against countries like Belarus and Iran “who militarily support Russia’s war”.

Von der Leyen, with Charles Michel of the European Council and Nato’s Stoltenberg, earlier signed a cooperation agreement between the EU and the alliance. The agreement “recognises the value of a more capable European defence that contributes positively to our security and is complementary to and interoperable with Nato,” Stoltenberg said.

The leaders said the EU and Nato were determined to work more closely together on issues including resilience, protecting critical infrastructures, space and the security impact of climate change. 

Russia uses missiles to hit World War 1 mine landfill  

A Russian attack on Ochakiv in southern Ukraine on Monday hit an old depot full of World War 1 sea mines, the governor of Ukraine’s Mykolayiv region, Vitaliy Kim, said on Telegram.

According to preliminary data cited by Kim, Russia may have used supersonic Kinzhal missiles to hit the concrete-covered landfill on the seashore. The resulting massive detonation wounded 15 people and damaged more than 200 buildings, mainly breaking windows and roofs, according to Kim.

Russian independent TV network gets Dutch broadcast licence 

Russia’s most prominent independent TV channel, Dozhd, or “Rain”, received a licence to broadcast in the Netherlands after Latvia revoked its permit last month for a programme that appeared to advocate sending supplies to mobilised Russian troops fighting in Ukraine.

The journalist later apologised and was fired. Like several other independent media outlets, Dozhd fled Russia after the start of the war and initially set up operations in Latvia. Dozhd applied for the Dutch licence on 6 December, the same day Latvia revoked its licence, and was granted a five-year licence on December 22, according to a statement by the Dutch media authority.

Read more: Russia independent TV network stripped of licence in Latvia

Baltic ministers to discuss joint purchases of defence weapons  

The Baltic defence ministers of Estonia, Latvia and Lithuania held a meeting to discuss joint purchases of defence capabilities for the region, including the Himars rocket launcher systems, the Lithuanian defence ministry said.

The ministers will also discuss aid to Ukraine and preparations for the upcoming Nato leaders summit in Vilnius, it said.

Latvia may send more Stinger missiles to Ukraine  

Latvia is considering sending stinger missiles to Ukraine, along with unmanned drones and training as part of a package of support, Defence Minister Inara Murniece said on Latvian TV.

“The Ukrainian front is our line of defence,” Murniece said. The package of support is in response to requests from Zelensky, she said.

Ukraine sees a budget shortfall of $3.5bn in 2023 

Ukraine will face a monthly budget shortfall of about $3.5-billion in 2023, lower than the $5-billion last year, due to more consistency in tax payments and lower expenditures, finance minister Serhiy Marchenko told a conference in Vienna via video. More predictability on international aid is allowing the government in Kyiv to shift to annual budget planning from the monthly approach it had adopted in the wake of Russia’s attack last year, he said.

The finance minister called for tighter sanctions on Russia that would have a more meaningful impact on its economy, and punishing efforts to circumvent existing restrictions.

Scholz says he’ll keep talking to Putin 

German Chancellor Olaf Scholz said he’ll keep talking to Russian President Vladimir Putin about the war in Ukraine — with the purpose of hammering home the message that Germany and Europe will never accept that Russia is trying to change borders in Europe through military force. 

Saying Germany had become one of the most generous countries supplying Ukraine with financial aid as well as weapons, Scholz won applause from fellow Social Democrats at a campaign event by vowing that “we’ll keep doing this as long as it will be needed”.

The chancellor added that Germany would continue to work closely with allies like the US on any future weapon deliveries for Ukraine, saying that there won’t be any German go-it-alone moves.

Biden aide says Ukraine aid secure despite McCarthy deal

US National Security Adviser Jake Sullivan said the $47-billion in new aid for Ukraine approved in the $1.7-trillion government funding bill last month won’t be at risk. His comments followed a deal struck by new House speaker Kevin McCarthy with GOP hardliners to cap 2024 spending in a move that could potentially include efforts to cut defence spending.

“That is money that has been appropriated,” Sullivan said. “I do not see that money getting taken away from us and therefore our ability to have the resources to support Ukraine, with both the security assistance it needs, as well as the economic humanitarian and energy assistance it needs.” DM