President Volodymyr Zelenskiy called on Ukraine’s allies to help ensure Russia is made to pay reparations. Kyiv estimates its direct war losses at $100 billion as of the start of May. The country’s foreign debt was downgraded by Moody’s, which said a drawn-out war is increasing the risk that Ukraine won’t be able to repay it.
The vodka and caviar fests traditionally thrown in Davos by Russian oligarchs are off the agenda at this year’s World Economic Forum this. Officials from the US and Japan were among those walking out of a regional trade meeting in Thailand as Russia’s representative spoke.
Russia said Friday its forces took full control of the Azovstal steel works, the last holdout of Ukrainian troops in Mariupol, after the remaining defenders surrendered. The strategic southern port city has been devastated during almost three months of assault.
(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)
- Putin’s War Means Russia’s Rich Aren’t Welcome at Davos Anymore
- G-7 Officials Roll Out $19.8 Billion Aid Package for Ukraine
- Scholz’s Push to Make Germany a Real Military Force Hits Trouble
- Investors Urge US to Extend Russian Bond Payment Waiver
- Ruble Hits 5-Year High as Gazprom Clients Heed Putin on Gas
- Firm With a Royal Sheen Helped Abramovich Spread His Wealth
All times CET:
Japan, US Walk Out of APEC Meeting as Russia Speaks (7:49 a.m.)
Representatives from five countries including Japan and the US walked out of an Asia-Pacific Economic Cooperation trade ministers meeting Saturday during remarks from Russia’s minister of economic development, Kyodo News reported, citing officials from Thailand, which chaired the meeting.
Read more: APEC Trade Chiefs to Renew Discussions on Regional Pact
Russia Leans on Drones, Repeating Syria Strategy, UK Says (7:30 a.m.)
Russia in Ukraine has attempted to implement the concept of “Reconnaissance Strike” it refined in Syria, which uses drones to identify targets to be struck by combat jets or artillery, the UK defence ministry said in a series of tweets.
Drones on both sides have proved vulnerable to being shot down and to electronic jamming, the UK said. It added that Moscow may already be seeing a shortage, exacerbated by domestic manufacturing problems as a result of Western sanctions. Its surveillance capabilities will be degraded if it continues to lose drones at its current rate.
Putin’s War Means Russia’s Rich Aren’t Welcome at Davos Anymore (7:06 a.m.)
The first in-person meeting in the Swiss Alps of the World Economic Forum in two years starts Sunday. Frostiness toward Russia, whose oligarchs have thrown some of the most famously glitzy parties at the World Economic Forum, will be palpable. It’ll be the first Davos gathering since the fall of communism without a single Russian official or business leader on hand.
There will likely be a more subdued tone as a whole, with the forum to be attended by a clutch of Ukrainian officials seeking to keep global attention on their plight as Russia’s war grinds on. A keynote address via video conference will be given by Ukrainian President Volodymyr Zelenskiy.
Russian companies have been nixed as strategic partners, a group of international businesses that play a prominent part in the calendar of events at a cost of 600,000 Swiss francs ($615,000) per year.
Finland Loses Main Gas Supply as Russia Turns Off Taps (6:55 a.m.)
Finland became the third European country cut off from Russian natural gas after refusing to pay in rubles. Gas accounts for only about 5% of the Nordic country’s energy mix, though. Poland and Bulgaria already had their supplies turned for the same reason.
Finnish importer Gasum Oy said natural gas supplies to Finland under its supply contract have been cut off, according to a statement on Saturday. The move had been foreshadowed on Friday.
Gasum will supply natural gas to its customers from other sources through the Balticconnector pipeline, while its gas filling stations will continue in normal operation, it said.
Ukraine Cut by Moody’s on Debt Risk From Drawn-Out War (10:55 p.m.)
Moody’s Investors Service cut Ukraine’s credit rating to the third-lowest level, saying a drawn-out war is raising the risks that the nation won’t be able to repay its debt.
The agency downgraded Ukraine by a notch to Caa3, rated on par with serial defaulters like Ecuador and Belize. At the Caa3 rating level, Moody’s expects a recovery in the event of default of typically between 65% to 80%, according to a statement published Friday.
Zelenskiy Says Russia Must Be Made to Pay Reparations (10:15 p.m.)
Russia must pay compensation for the damage its aggression has inflicted on Ukraine, Volodymyr Zelenskiy said in his daily video address to the nation, calling on allies to “create a mechanism” for reparations.
The Ukrainian president said countries should seize Russian assets on their territories and create a fund that will help cover war losses, as well as setting up an international commission to look into compensation claims. Ukraine estimated its direct losses at about $100 billion as of the beginning of May.
Russia Says It Took Control of Azovstal Steel Works (9:05 p.m.)
Russia forces took full control of the Azovstal steel works, the last holdout of Ukrainian troops in Mariupol, after the remaining defenders “surrendered,” the Ministry of Defense in Moscow said in a video statement.
Defense Minister Sergei Shoigu reported results of the months-long battle for the plant to President Vladimir Putin, according to the ministry. Thousands of Ukrainian troops had been hiding out in the catacombs beneath the giant factory, gaining hero status at home as they held off Russian forces even though they were surrounded and ran short of supplies. Ukraine didn’t immediately confirm the Russian claim.
The Defense Ministry in Moscow said 2,439 Ukrainian troops surrendered since May 16 at Azovstal, including at least one commander. Ukrainian officials have said they expect Russia to return the prisoners in a swap in the future, but Moscow has said it may try at least some of them for war crimes and has taken many to Russian territory.
Canada Sees G-7 Interest in Russian Asset Seizure Law (5:24 p.m.)
Finance Minister Chrystia Freeland said her Group of Seven counterparts are looking closely at Canada’s new legislation that would allow the confiscation of Russian assets to help pay for rebuilding in Ukraine.
The G-7 recognizes “that Ukraine’s financial needs are huge. The needs for the rebuilding are huge and it is entirely appropriate for the aggressor to help pay for that rebuilding,” she said.
Canada also unveiled new sanctions on 14 Russian individuals and a ban on the import and export of luxury goods to and from Russia.
Germany Says No Need to Suspend EU Deficit Rules on War (5:18 p.m.)
German Finance Minister Christian Lindner sees no need to suspend euro-zone deficit rules in 2023, saying that despite Russia’s invasion of Ukraine, the economic fallout isn’t a reason for a further exemption.
The European Commission will on Monday propose extending a suspension of the budget rules until end-2023, people familiar with the matter told Bloomberg. Under the rules, which had been set aside until the end of this year due to the pandemic, national deficits are limited to 3% of gross domestic product and public debt to 60% of output.
Putin Demands Tighter Control Over Digital Space (3:32 p.m.)
Russia has successfully defended itself against a massive increase in coordinated cyberattacks by foreign states including on “critical” infrastructure since the start of its invasion of Ukraine, Putin told a televised meeting of his Security Council.
He called on officials to create a state system to prevent information leaks online, without elaborating. Protections against attacks on information systems and communication networks must continue to be strengthened so there are no digital “weak points” to exploit, Putin said.
The Kremlin has increasingly cracked down on foreign social media and technology companies, blocking access to some services, since the war, arguing it’s preserving “digital sovereignty.” Critics say it’s attempting to prevent Russians seeing information about the invasion that contradicts official versions of events.
G-7 Officials Roll Out $19.8 Billion Package for Ukraine (3:20 p.m.)
Finance chiefs from the Group of Seven leading economies pledged to deliver $19.8 billion of budget aid to Ukraine this year as the country struggles to continue functioning amid destruction wrought by Russia’s invasion.
The amount includes $9.5 billion of commitments made in the run-up to this week’s meeting, “to help Ukraine close its financing gap and continue ensuring the delivery of basic services to the Ukrainian people.”
EU Could Tap Markets in July for Ukraine Funds (3:12 p.m.)
The European Union told member states that it could tap markets in July to pay for a first installment of funds for Ukraine out of the 9 billion euros it has allotted for Kyiv’s short-term needs, according to people familiar with the discussion. Ukraine has said it needs about 5 billion euros per month.
The EU said it plans to transfer three or four more installments by the end of the year, said the people, who asked not to be identified because the talks were private. The loans will have maturities of more than 20 years and interest payments will be covered by the EU budget.
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