Ukrainian President Volodymyr Zelensky warned that unless Ukraine wins a drawn-out battle for the key eastern city of Bakhmut, Russia could begin building international support for a deal that would require the government in Kyiv to make unacceptable compromises.

Zelensky also said he wants Chinese President Xi Jinping to visit and is still waiting to talk to him. Xi travelled to Moscow this month in a strong show of support for Russian President Vladimir Putin and was then expected to hold his first conversation with Zelensky since the invasion.

Key Developments

• Putin’s War Is Intensifying Labor Shortages in Russia’s Economy
• Yellen Says International Aid Programs Crucial to US Leadership
• DOJ Backs EU Push to Freeze Russian Bank Assets Over Ukraine
• Mystery Over Abandoned Yacht Grows as Russian Tycoon Denies Link

US urges EU to sanction Chinese satellite firm over Russia aid 

The US is urging the European Union and other allies to sanction a Chinese satellite company for allegedly supporting Russia’s military operations in Ukraine, according to people familiar with the matter.

Spacety China was hit with US sanctions in January over claims it provided satellite images of locations in Ukraine that enabled the combat operations of Wagner Group mercenaries, led by a longtime ally of Russian President Vladimir Putin. The imagery was sent to the Russian technology firm Terra Tech before being transferred to the mercenary group, according to the US filing. 

While the EU has aligned in coordination many of its Russia-related sanctions with the US, two months later it has yet to sanction the Chinese satellite firm. 

Glencore-backed Viterra plans to exit Russian grain trade 

Major crops trader Viterra is planning to exit the Russian market, according to people familiar with the matter.

Russia is the world’s biggest wheat exporter, and Viterra’s exit adds to uncertainty over the future of Black Sea crop shipments. Wheat prices rose on the news. Russia said on Wednesday that top agricultural commodities trader Cargill will stop exporting its grain.  

Germany to raise military support for Ukraine by €12bn

The German government plans to increase its financial support for Kyiv by as much as €12-billion to help arm Ukraine in its fight against Russia, people familiar with the matter said.

Defence Minister Boris Pistorius will get the green light from Parliament’s budget committee on Wednesday to more than double the pot for this year to €5.4-billion, according to the people, who asked not to be identified discussing confidential information.

A further €8.8 billion will be made available if needed in coming years, they said, for an overall increase of €12-billion to €14.2-billion.

EU aims to boost Russia sanctions enforcement 

The European Union is planning to launch a project with nine member states to identify gaps in the sanctions regime against Russia and to improve coordination between national authorities when enforcing penalties, EU officials said.

The partnership between the European Commission and the national governments, which are currently responsible for the implementation of sanctions, could be a precursor to a new EU body to coordinate sanctions oversight, the officials added.

Yellen says aid crucial to US leadership 

Yellen said the Biden administration’s proposed spending on international aid and investment programmes, exemplified by assistance for Ukraine, will advance US security interests. 

“There is perhaps no place where our impact is felt more acutely than in Kyiv,” Yellen said according to prepared remarks she’s due to deliver on Wednesday to a subcommittee of the House Appropriations Committee. 

“In my trip to Ukraine last month, I heard personally about how our coalition’s work has enabled Ukraine to defend itself against a brutal and illegal assault by Russia,” she said.

Russian hackers target Slovakia, says report 

The Anonymous RU hacker group temporarily disabled the websites of the Slovak central bank, Parliament, justice ministry and two local lenders on Tuesday, according to a report in the newspaper Dennik N.

The hackers wrote on their Telegram account that the action was a warning to Slovakia for supporting the government in Kyiv and supplying Ukraine’s armed forces with MIG-29 fighter jets. Slovakia approved sending 13 MiG-29s to Ukraine this month to bolster the country’s defence.

Russia says Cargill will stop exporting its grain 

Russia said top agricultural commodities trader Cargill will stop exporting its grain, the strongest move yet by a major Western crop merchant to pull back from the country. 

As the biggest wheat exporter, Russian shipments are vital to global crop trade and food supplies. A bumper harvest there last year helped wheat futures drop more than 40% from a record reached just after the invasion of Ukraine. While Cargill is a big exporter of Russian wheat, the government said the firm’s decision shouldn’t affect overall shipments out of the country.

IAEA officials head to Zaporizhzhia 

International Atomic Energy Agency (IAEA) inspectors were expected to cross the battle line separating Ukrainian and Russian forces on Wednesday, with Director-General Rafael Mariano Grossi leading a mission to the Zaporizhzhia nuclear power plant. 

The facility, Europe’s biggest atomic-power generator, was taken by Russia in the first week of the war and frequent shelling of electric cables needed to keep the plant’s six reactors safe has fuelled fears about a nuclear accident. The IAEA has repeatedly called on Russia and Ukraine to erect a security zone around the reactors, while Ukraine has said that without a complete withdrawal of Russian troops, the IAEA’s proposal is “doomed to fail”.

Sweden summons Russian ambassador 

Swedish Foreign Minister Tobias Billstrom summoned Russia’s ambassador in Stockholm after a posting on the embassy’s website said Sweden would be a “legitimate target” if it joins Nato, calling it “an obvious attempt at influence.” 

The ambassador, Viktor Tatarintsev, stated in the posting on Tuesday that “new members of the hostile bloc will be a legitimate target for Russia’s retaliatory measures, including military ones”.

Ukraine sees wind replacing coal faster  

Ukraine plans to exceed its renewables target after thermal power plants and coal mines were damaged in missile and drone strikes, according to Energy Minister German Galushchenko. 

“Renewables is one of our strategies and now we speed this up,” the minister said in an interview. “Due to the destruction of thermal generation and lots of mines destroyed, the process of phasing out coal speeds up dramatically.” 

Premiers urge big tech to fight disinformation 

The prime ministers of Ukraine, Czech Republic, Estonia, Latvia, Lithuania, Slovakia and Moldova signed a joint letter calling on major technology and social media platforms to combat disinformation which seeks to destabilise their nations and weaken their democracies.  

They urged the companies to refrain from accepting payments from sanctioned individuals, deploy algorithms to promote accuracy, make their policies more transparent, improve content moderation and clearly mark AI-generated content and “deepfakes” to identify automated manipulation campaigns.

Putin won’t last if he loses Crimea – Kasparov 

“I don’t think that Putin or his vertical of power could withstand the liberation of Crimea, because it’s an essential part of the myth,” Garry Kasparov, a Russian opposition activist and chess grandmaster, told the Latvian news site Delfi. “Without which it will not hold together.”

Personalised dictatorships rely on the idea that the leader is invulnerable, Kasparov said, adding that “a Ukrainian victory will shatter this myth” and Russia could then have the opportunity to change. Ukraine’s Crimea peninsula has been under Russian occupation since 2014.

Russia occupies 65% of Bakhmut – ISW  

Russian forces have advanced into an additional 5% of Bakhmut in the past seven days and they currently occupy roughly 65% of the city, according to the latest assessment by the Washington-based Institute for the Study of War.

Troops from Russia’s Wagner Group paramilitary organisation are likely working to consolidate gains in northern and central Bakhmut to push towards the centre and expand their zone of control into western areas of the city, the institute said.

War intensifying Russian labour shortages 

Putin’s drive to expand Russia’s armed forces is adding to labour shortages as the war draws hundreds of thousands of workers into the military from other sectors of the economy. 

Federal Statistics Service data suggest a net increase in the military last year of approximately 400,000 amid already record-low unemployment, Bloomberg Economics estimates, after Putin ordered the call-up of 300,000 reservists in the country’s first partial mobilisation since World War 2.

Zelensky hasn’t spoken with Xi since war started 

In his AP interview, Zelensky said he hasn’t had any contact with Xi since Kremlin forces invaded Ukraine early last year.

“We are ready to see him here,” he said. “I want to speak with him. I had contact with him before full-scale war. But during all this year, more than one year, I didn’t have.”

He also voiced concerns that shifting political forces in Washington could affect the war. Some politicians in the US have questioned whether Washington should continue to supply Ukraine with military aid. 

Belarus opposition leader meets Sullivan 

US National Security Adviser Jake Sullivan met with Belarus opposition leader Sviatlana Tsikhanouskaya, who said the two discussed measures to challenge the country’s longtime leader, Alexander Lukashenko, and Putin’s plan to station nuclear weapons there. 

During the Monday encounter, Sullivan expressed “the steadfast support of the United States for the Belarusian people’s pursuit of a sovereign and democratic future, including free and fair elections as well as human rights protections”, according to a White House statement. In the 2020 election, Tsikhanouskaya challenged Lukashenko and fled the day after the vote following threats from officials. DM