Some of Ukraine’s most potent military units are “waiting for their hour” to join the fight, Ukrainian President Volodymyr Zelensky said in a video address on Monday evening. Kyiv’s military hasn’t lost any positions as they hold their ground in areas seeing an increase in Russian attacks, he said.

Ukrainian forces downed 32 of 35 Russian-launched drones in a barrage that reached as far as the western city of Lviv, where it hit a “critical facility,” Mayor Andriy Sadovyi said on Telegram.

The European Union is ready to propose a financial aid package of around €50-billion to support Ukraine as it presses forward with the campaign to retake territory lost since Russia’s invasion more than a year ago.

Latest developments

• EU readies €50bn Ukraine package ahead of donor summit 
• Germany to place Rheinmetall ammunition order worth €118m
• Putin foe Navalny risks 30 more years in jail at new trial

Germany to place Rheinmetall ammunition order worth €118m

Germany is poised to place its latest major order with a domestic defence manufacturer in a push to replace depleted stocks of ammunition for rapid-fire howitzers supplied to Ukraine.

Chancellor Olaf Scholz’s government plans to buy 28,878 projectiles for the PzH 2000 self-propelled howitzer from a unit of Rheinmetall at a cost of €118.5-million, according to a government document dated 16 June seen by Bloomberg.

The purchase, which legislators in the lower house of Parliament’s budget committee are expected to approve this month, will be the first in a series of orders to replenish Germany’s stocks of 155mm ammunition from about 20,000 units currently to around 230,000 by 2031.

Germany has been one of the most generous suppliers of military and other aid to the government in Kyiv, while at the same time pushing ahead with an effort to modernise the country’s armed forces after decades of neglect.

As well as 14 of the howitzers, Chancellor Olaf Scholz’s ruling coalition has sent Ukraine heavy materiel including Leopard battle tanks, Marder infantry fighting vehicles, Iris-T and Patriot air-defence systems and Gepard anti-aircraft guns.

Speaking alongside Nato Secretary General Jens Stoltenberg on Monday in Berlin, Scholz said his government was “pushing German manufacturers to expand their capacity to produce and repair military equipment”. He also warned that the military alliance should be prepared for Russia’s war on Ukraine to last “for a long time.”

Thai firm cites Russian war in Ukraine to exit €560m deal

Stark Corp, a Thai maker of electrical components engulfed in an accounting scandal, has cited Russia’s war in Ukraine as a reason for pulling out of an agreement to buy a German maker of automotive cable solutions for €560-million.

The deal between Stark and Leoni and Leoni Bordnetz-Systeme for Leoni Business Group Automotive Cable Solutions allowed the buyer to withdraw if there was a military attack against any sovereign countries in jurisdictions in which it operated and that had a material impact on its financials, the Thai firm said in an exchange filing on Monday.

After the initial purchase agreement was signed in May last year, the war continued and Stark’s board considered the military offensive would cause significant “negative changes to the economic situation” and adversely affect the finances of the automotive cable solutions business, the Thai company said.

Leoni and Leoni Bordnetz-Systeme have, meanwhile, filed a case with the German Arbitration Institute seeking compensation of €608-million and Stark has said it’s engaged advisers to file a counterclaim. Stark said it was in the process of responding to the request for arbitration by Leoni and sought an extension until 19 September to respond to the filing.

EU readies €50bn Ukraine package ahead of donor summit

The European Union is ready to propose a financial aid package of around €50-billion to support Ukraine as the country embarks on a critical counteroffensive to retake territory lost since Russia’s invasion more than a year ago.

The proposal from the European Commission, the EU’s executive arm, will help finance the Ukrainian government’s current expenditures and pay for urgent reconstruction priorities, according to people familiar with the plan.

The aid package comes at a pivotal time in the war, with Ukraine’s forces launching a long-expected spring campaign. The Ukrainian government is counting on the counteroffensive to push Russian forces from more territory and encourage allies to continue providing needed support even as some countries are pressuring Kyiv and Moscow to negotiate. Ukrainian officials last week said their troops had made some advances amid “severe fighting.”

The proposal, part of the review of the EU’s long-term budget, would cover the period from 2024-2027. It would provide less annually than the €18-billion in financial assistance the EU is offering this year. The World Bank has estimated that Ukraine’s reconstruction costs could amount to $411-billion.

Russian oil flows edge lower, but evidence of cuts remains scant

Russian crude oil flows to international markets have drifted lower, while remaining well above levels seen in February, the baseline month for the country’s pledged output cuts.

Four-week average seaborne shipments, which smooth out some of the volatility in weekly numbers, edged down in the period to 18 June to 3.63 million barrels a day from 3.66 million in the period to 11 June.

On that basis, flows are now down by 212,000 barrels a day from the peak they reached in the period to 21 May, but are still 250,000 barrels a day higher than they were in the four weeks to 26 February. February was the baseline month for production cuts promised by the Kremlin.

President Vladimir Putin told the St Petersburg International Economic Forum that the nation’s oil and gas industry is in good shape. “The output in the country is growing and we are happy about it, our sales are robust,” he said, without explaining how that would align with Moscow’s pledge to cut production.

Secondary sources that the Opec+ producers’ group uses to monitor its members’ production levels raised their estimate for Russia’s February volumes, effectively lifting the country’s output target by about 120,000 barrels a day.

There is still little evidence that the pledged 500,000 barrels a day of cuts — retaliation for Western sanctions imposed after the invasion of Ukraine — have been made, at least not in full. DM