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UKRAINE UPDATE: 22 DECEMBER 2023

Orbán sees EU states circumventing Hungary on Kyiv aid; Russia to digitise military registration

Orbán sees EU states circumventing Hungary on Kyiv aid; Russia to digitise military registration
Hungarian Prime Minister Viktor Orbán at his annual news conference in Budapest, Hungary, on 21 December 2023. (Photo: Akos Stiller / Bloomberg via Getty Images)

The European Union can bypass Hungary’s opposition to joint aid for Ukraine by striking a separate deal among the 26 other member states at a summit early next year, Prime Minister Viktor Orbán said on Thursday.

Russian President Vladimir Putin ordered his government to put in place a digital registration system that will allow authorities to more easily track and draft into the army military-aged citizens as early as next year.

Ukraine’s parliament approved the legalisation of medical cannabis as the nation responds to the growing ranks of war veterans requiring treatment for injuries and post-traumatic stress disorder. 

EU can bypass Hungary on €50bn aid for Ukraine, says Orbán

The European Union can bypass Hungary’s opposition to joint aid for Ukraine by striking a separate deal among the 26 other member states at a summit early next year, Prime Minister Viktor Orbán said on Thursday.

The bloc has been looking for ways to get around Hungary’s intransigence after talks over a €50-billion package for the government in Kyiv broke down at a summit last week.

A potential backup option that has been floated is having member states funnel money to Kyiv outside of the EU budget process, an option Orbán signalled may be viable.

“It’s not a question that Hungary’s will can be circumvented in many areas,” the premier told reporters in Budapest. “The others have that opportunity in this area as well.”

He also questioned whether Russia’s full-scale invasion of Ukraine, which had led to hundreds of thousands of casualties, should be called a “war”.

“This is a military operation,” Orban told reporters, using Russian President Vladimir Putin’s terminology. “There was no declaration of war between the two countries. When Russia declares war then there will be war.” 

Read more: Kyiv is running out of options to fund the fight against Russia

With political infighting in Washington also holding back key aid from the US, at stake is President Volodymyr Zelensky’s ability to marshal continued support for Ukraine amid a second full winter of combat since Russia invaded in early 2022.

Putin moves to digitise Russia’s military registration, draft

Putin ordered his government to put in place a digital registration system that will allow authorities to more easily track and draft into the army military-aged citizens as early as next year.

Putin instructed Defence Minister Sergei Shoigu and Minister of Digital Development Maksut Shadayev to start work by 15 January to issue all draft notices electronically, according to the Russian president’s order published by the Kremlin on Thursday. Under the order, all military registrations will be processed digitally, which would allow the government to expedite any draft and make it more difficult to avoid being called up. 

There would be one database for military registrations as well as a publicly accessible register for summonses, according to the document. The ministries were instructed to have the new system in place by October 2024.

At a news conference on 14 December, Putin ruled out for now a repeat of last year’s call-up of about 300,000 reservists, which prompted hundreds of thousands of people to flee the country to avoid the draft. He said nearly half a million people had signed contracts to join the army or volunteered to fight this year.

“Why do we need a mobilisation?” Putin said. “There is no need.” 

Earlier this month, Putin signed a decree to expand the number of troops to 1.3 million people from 1.15 million as part of a plan he approved last year to increase the number of servicemen to 1.5 million.  

EU should tap €80bn rescue fund to help Ukraine, says Finnish banker

The European Union should prepare to tap a little-used €80-billion rescue fund to support Ukraine’s war against Russia as the flow of money from both sides of the Atlantic threatens to dry up, according to Finnish central banker Olli Rehn.

Set up on Rehn’s watch to provide loans to distressed euro-area countries when he was EU economic affairs commissioner, the European Stability Mechanism (ESM) could be at the centre of a multiyear “Plan B” to assist Kyiv, he said.

“We have no imminent need for the ESM in financial markets, but we have a profound urgency, an existential urgency in Ukraine,” Rehn told Bloomberg in an interview on Thursday. “It’s a matter of freedom, democracy and the defence of Europe.”

Finding funds fast was essential to contain Putin’s “threat and imperialist aspirations”, Rehn said.   

Chips from US semiconductors flow into Russia despite ban

US semiconductors have continued to flow to Russian military-linked companies this year in spite of export restrictions aimed at cutting them off — with Texas Instruments (TI) and Analog Devices emerging as the biggest makers of those chips.

Shipments of the semiconductors surged in the first half of the year, many travelling through Hong Kong on their way to the sanctioned country, according to Russian customs data provided by the Washington-based investigative nonprofit C4ADS. That has undermined efforts to keep technology away from Putin’s military following the invasion of Ukraine.

Representatives for Texas Instruments and Analog Devices said they didn’t sell the chips directly to the Hong Kong entities and both stopped doing business with Russia in 2022. Still, the companies’ semiconductors have continued to stream into the country, showing the challenges of keeping US technology out of Russian hands.

More than 200 businesses in Russia — two now sanctioned by the US — received 17,000 Texas Instruments chips from January to May of this year, according to a Bloomberg News analysis of the data. The shipments had a total value of $25-million. Chips sent to the now-sanctioned Russian entities were handled by two Hong Kong companies that were sanctioned in October for supplying Russian military-linked companies, the data show. 

Texas Instruments said it had no knowledge that its chips were sold onward to military-linked entities in the country.

“TI strongly opposes our chips’ use in Russian military equipment and the illicit diversion of our products to Russia,” the company said in an emailed statement. “Any shipments of TI products into Russia are illicit and unauthorised.” 

Ukraine moves to legalise medical marijuana to treat veterans

Ukraine’s parliament approved the legalisation of medical cannabis as the nation responds to the growing ranks of war veterans requiring treatment for injuries and post-traumatic stress disorder.

The legislation to regulate medical, scientific and industrial use of cannabis passed with a majority of 248 in the 450-seat assembly in Kyiv, lawmaker Yaroslav Zheleznyak said on Telegram. A total of 16 members opposed the motion. 

Support to legalise medical marijuana has gathered steam in Ukraine as Russia’s invasion approaches its second year and discussion in the country centred on the drug’s benefits in treating severe pain and addressing mental health. Zelensky is expected to sign the bill into law, which could go into effect in the second half of 2024, Zheleznyak said. 

“For our citizens not to endure the pain, stress and trauma of the war, we must finally justifiably legalise treatment based on medical cannabis for everyone who needs it,” Zelensky told the assembly in June. 

Brazil braces for record amount of Russian diesel this month

Brazil is bracing for a record amount of diesel and gasoil from Russia this month ahead of Moscow’s pledged supply cuts in the first quarter.

At 10 million barrels, Russian diesel imports into the South American nation will more than double volumes from the previous month, according to Kpler data compiled by Bloomberg. The jump precedes Russia’s plan to deepen export cuts of oil and fuel in the first quarter, along with other Opec+ allies.

Record flows of Russian fuel — often at discounted prices to international benchmarks — also disadvantage refiners in the US. Fuelmakers in Texas and Louisiana relied on Brazil as a major outlet before this February, when European Union sanctions forced Moscow to seek alternative markets for its diesel.

Ukraine’s lost crops: An 8m tonne black hole in world stats

Millions of tonnes of crucial crops are being grown in Ukrainian regions occupied by Russia. The problem is that it’s hard to know exactly how much or where it’s really going.

It’s so tricky estimating volumes that some of the most prominent analysts are just cutting those regions held by Moscow out of forecasts altogether.

That’s because as the war grinds on, it’s getting harder to obtain reliable information about how much is being planted and harvested. And while some crops will be consumed in those territories, other amounts are being shipped to Russia or mixed with Russian grain and sold on the world market.

But Nasa’s food security and agriculture programme gives a clue of the volumes. About 6.4 million tonnes of wheat — similar to Bulgaria’s total output — and almost 1.5 million tonnes of sunflower seeds were harvested in Russia-occupied regions of Ukraine this year, research using satellite imagery shows.

Although not enough to tip the global balance, it’s a sizeable amount unaccounted for in industry reports that traders use to gauge supplies and exports, which can affect market prices. Plus, inadvertently handling grain from occupied regions could raise legal risks for international merchants.

“We’re talking about a tremendous amount of grain,” said Inbal Becker-Reshef, programme director at Nasa Harvest. “It’s absolutely critical to have this information out there and transparent, and talking about how much food right now is being harvested and produced.”

Assessing the value and damage of grain grown on occupied land is also important for any claims Ukraine may make for reparations from Russia.

While Nasa’s research doesn’t show how much of the grain grown there is being exported, it helps to indicate how much could potentially be mixed with Russian cargoes, which head to nations including in the Middle East and Africa. DM

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