Hungary defies EU by sealing energy deals with Moscow; Russia to expand penalties for draft evaders

Hungary defies EU by sealing energy deals with Moscow; Russia to expand penalties for draft evaders
Russian conscripts pictured at a railway station in Sevastopol before leaving to serve in the war, Crimea, 9 November 2022. (Photo: EPA-EFE / STR)

Hungary’s top diplomat sealed energy deals in Moscow during a rare visit by an official from a European Union member that underscores Budapest’s schism with the rest of the bloc over Russia’s invasion.

Russia expanded penalties for those who evade the military draft under a new package of legal changes that critics said may presage further call-ups for President Vladimir Putin’s war in Ukraine.

US Vice-President Kamala Harris met with Polish Prime Minister Mateusz Morawiecki on Tuesday to discuss Russia’s invasion of Ukraine.

Key developments 

Ukraine’s steel output highest since start of war 

Ukraine’s steel production hit a 13-month high, a first sign of recovery shown by the industry after a deep plunge brought about by Russia’s invasion, according to data provided by Kyiv-based Sense Bank.

The nation’s average daily steel output climbed by 13% from the previous month and more than doubled from a year earlier in March. Ukraine’s steel industry has been severely hit, including by the destruction of the Azovstal plant located in occupied Mariupol.

Russia’s current account surplus plunges as energy cash dries up 

Russia’s current account surplus shrank last quarter by more than $51-billion from a year earlier, as sanctions increasingly deprive the government of what’s been a critical source of hard currency since the invasion of Ukraine.

The surplus in the current account — roughly the difference between exports and imports — decreased to $18.6-billion in the first three months of the year, according to preliminary central bank data.

Ukraine’s richest man sues Russia 

Ukrainian billionaire Rinat Akhmetov launched arbitration proceedings against Russia for seizing assets that belong to his SCM Group in the occupied regions of Donetsk and Luhansk, according to a statement that didn’t specify the court at which the case was being pursued.

Assets seized or destroyed in the two eastern Ukrainian regions from 2014-2017 include metals and mining enterprises, energy infrastructure, real estate, and the headquarters and stadium of his Donetsk-based football squad Shakhtar Donetsk, which cost more than $400-million, the statement said.

“We will seek justice using all available legal means with every possible agency and court, because Russia’s crimes against Ukraine and Ukrainians that have been committed since 2014 must be punished,” Akhmetov said. He plans to invest any compensation to rebuild and contribute to economic growth.




Russian companies shift to Astana to keep international trading 

Kazakhstan’s capital may become the home bourse for Russian companies seeking to keep their shares traded by international investors, as they are forced to quit London and New York following the invasion of Ukraine.

Russia’s biggest gold miner, Polyus, is weighing whether to list its global depositary receipts on the Astana International Exchange, sources say. Another gold miner, Polymetal International, is considering re-registering in Kazakhstan, while its GDRs may be traded in Abu Dhabi. Russia’s Ros Agro listed its GDRs in the Kazakh capital in March, switching from London.

IMF trails only JPMorgan for most upbeat view of Russian economy 

The International Monetary Fund (IMF) is taking one of the most optimistic views of Russia’s economy this year despite the toll of sanctions over the invasion of Ukraine.

An upgrade to 0.7% in the IMF’s latest projections means Russia saw one of the biggest upward revisions among major economies from the fund’s outlook in January, when it expected the gross domestic product to expand by 0.3% in 2023.

“They’ve been able to maintain quite a bit of momentum in the economy by taking, for instance, very strong fiscal measures,” IMF Chief Economist Pierre-Olivier Gourinchas told reporters in Washington.

Hungarian envoy seals energy deals in Moscow 

Hungary’s top diplomat secured a deal to expand gas flows from Russia and renewed a financing agreement on its nuclear power plant as Prime Minister Viktor Orban moved to boost his country’s dependence on Russian oil, gas and nuclear supplies.

Hungary will now have the option to receive more natural gas from Russia on top of an existing long-term agreement ahead of the winter storage season. Foreign Minister Peter Szijjarto also agreed to further secure crude supplies through the Druzba pipeline via Ukraine.

Ukraine calls for closer ties with India  

Ukraine wants closer ties with India, First Deputy Foreign Minister Emine Dzhaparova said during a visit to New Delhi.

In the first visit by a representative of Kyiv to India since Russia invaded in February 2022, Dzhaparova said Ukraine was carefully watching Indian Prime Minister Narendra Modi and frequent trips by National Security Adviser Ajit Doval to Russia.




Russia to expand penalties for draft evaders 

The changes are part of a package of measures aimed at toughening rules as Russia moves to expand its armed forces by nearly 50% to 1.5 million people over several years. They’re designed to rectify problems exposed in last year’s mobilisation of 300,000 reservists to fight in Ukraine, which triggered widespread public discontent.

Under the plan, contained in hastily proposed amendments approved unanimously by the lower house of Parliament on Tuesday, those potentially eligible to be called up who didn’t respond to notices sent electronically would be banned from leaving the country, getting driver’s licences, buying and selling property and taking loans. 

The changes also remove the requirement that draft notices be delivered in person, which those seeking to avoid service had long taken advantage of, and replace it with an online system. The Kremlin reiterated on Tuesday that no further waves of mobilisation were currently planned.

Ukraine clears mines from 2,323 hectares of farmland  

More than 12,000 hectares of agricultural lands were inspected by units of Ukraine’s emergency service, military and non-government operators, Economy Minister Yuliya Svyrydenko said in a statement.

Hungary’s top diplomat visits Moscow in defiance of EU stance  

Foreign Minister Peter Szijjarto’s meetings with two energy officials are part of Hungarian Prime Minister Viktor Orbán’s effort to maintain his country’s dependence on Russian oil, gas and nuclear supplies even as EU partners move to break free.

After visiting Belarus in February in another rare trip to a Moscow ally under Western sanctions, Szijjarto met Russian Deputy Prime Minister for Energy Alexander Novak and Alexey Likhachev, the chief executive officer of state nuclear company Rosatom. 

World’s top uranium miner sees clients switching from Russia  

Kazakhstan’s state-owned uranium miner is preparing reserves for production as demand increases, including from Eastern European power producers looking to cut their reliance on Russia.

Some nuclear plants in eastern Europe, which previously sourced enriched uranium from Russia, are seeking contracts from 2025, Kazatomprom Chief Executive Officer Yerzhan Mukanov said in an interview in Astana. 

Geopolitical uncertainties are reshaping flows of the nuclear fuel, prompting some power producers to build inventories, he said. 

Ukrainian premier visits Canada 

Prime Minister Denys Shmyhal met with his Canadian counterpart Justin Trudeau and Finance Minister Chrystia Freeland during his official visit there on Tuesday.  

Blinken makes official determination on Gershkovich 

Secretary of State Antony Blinken has formally determined that Evan Gershkovich, a reporter for The Wall Street Journal, has been wrongfully detained by Russia, a finding that authorises the US to negotiate on his behalf.

“Journalism is not a crime,” Vedant Patel, a State Department spokesperson, said in a statement on Monday. “We condemn the Kremlin’s continued repression of independent voices in Russia, and its ongoing war against the truth.” 

Blinken had already assailed Gershkovich’s detention on espionage charges, telling reporters that “in my own mind, there’s no doubt that he’s being wrongfully detained by Russia”. But the State Department was still going through the process of making that finding official. DM


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