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Ukraine Latest: Australia Joins Regional Leaders in NATO Visit

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·12 min read
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(Bloomberg) -- Australia’s Prime Minister Anthony Albanese will head to Europe for a NATO meeting in late June, in what the new premier has described as a show of support for Ukraine in the face of “thuggish, illegal behavior” by Russia.

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Japanese Prime Minister Fumio Kishida and South Korean President Yoon Suk Yeol also plan on attending. Their attendance at the meeting in Madrid would be precedent-setting visits from the leaders of the two US allies who neighbor Russia, which add to the backing of the military alliance from Indo-Pacific powers.

The leaders of Germany, France and Italy pledged support for Ukraine to become a candidate to join the European Union after talks with President Volodymyr Zelenskiy during a visit to Kyiv intended to show unity in the face of Russia’s invasion. European natural gas prices spiked as Moscow tightened its flows to the continent in a move that Italy’s Prime Minister Mario Draghi called politically motivated.

(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)

Key Developments

  • Australian PM to Attend June NATO Meeting to Support Ukraine

  • Enel Sells Russian Unit as Gas Standoff With Europe Intensifies

  • Scholz, Macron and Draghi Boost Ukraine’s EU Membership Bid

  • Germany Sets Path for Beefed-Up NATO Defenses on Eastern Flank

  • Putin’s Forum Preaches Self-Reliance as Foreigners Stay Away

  • Powell Unsure on How New Shocks Like Ukraine Impact Inflation

(All times CET)

Oil Set for Weekly Loss (6:23 a.m.)

Oil is heading for the first weekly decline since April after a period of choppy trading as investors weigh the prospect of further monetary tightening from central banks to curb rampant inflation.

Russia’s invasion of Ukraine has fanned inflation and helped to drive up the cost of everything from food to fuels. US retail gasoline prices have repeatedly broken records and the national average recently topped $5 a gallon. The White House is weighing limits on fuel exports to try to alleviate the pump pain.

Australian PM to Attend June NATO (2:53 a.m.)

In an interview with Sky News Australia, Albanese didn’t confirm whether he would accept an invitation by Zelenskiy to visit Kyiv but said he would attend the North Atlantic Treaty Organization meeting in Madrid on June 29.

“I’m going to NATO as a priority, because Australia is actually the largest non-NATO contributor to the efforts to support sovereignty in Ukraine and to support the people of Ukraine standing up against this thuggish, illegal behavior of Russia,” Albanese said.

Read more: Kishida to Be First Japanese Premier to Attend NATO Summit

Russia’s War Pushes Global Displacement to Record, UN Agency (1:30 a.m.)

Russia’s invasion of Ukraine caused one of the fastest and largest displacements of people since World War Two and helped push the number forced to flee their homes globally to the highest annual level since the United Nations began keeping track.

UNHCR, the UN Refugee Agency, said in a report that by the end of 2021, the number of people “displaced by war, violence, persecution and human rights abuses” stood at 89.3 million around the world, more than double from a decade ago. The numbers are rising this year, and as of May 2022, more than 100 million people were forcibly displaced, it said. The war the war in Ukraine has displaced about 8 million within the country this year, it has said.

US Sails Seized Russian Megayacht to Hawaii (1:06 a.m.)

US authorities have sailed the $325 million yacht they seized last week that’s linked to Russian billionaire Suleiman Kerimov to Hawaii -- a big win for the Biden administration as it looks to confiscate Russian assets and punish oligarchs for their country’s invasion of Ukraine.

The 348-foot Amadea, now sailing under an American flag and manned by a new crew, moored in Hawaii on Thursday morning local time, according to vessel data compiled by Bloomberg and space-based analytics firm Spire Global Inc.

Follow the Amadea’s journey here.

EU to Give Ukraine, Moldova Initial EU Nods on Membership Path (9:12 p.m.)

The European Commission plans to recommend that Ukraine and Moldova be granted candidate status in a symbolic step forward in the lengthy process to become members of the European Union.

The EU’s executive arm is set to issue its opinion on Friday and will impose conditions that the countries will have to meet in the future on the rule of law, justice and anti-corruption, according to people familiar with the matter. The commission is also expected to recommend granting candidate status to Georgia once it meets specific conditions.

Draghi Decries Russian Gas Cuts as Political (6:53 p.m.)

Draghi joined Germany in rejecting Russian statements that gas cuts to Europe were “not deliberate,” saying, “We think this is a lie.”

“There is a political use of gas, as there is a political use of wheat,” the Italian prime minister said at a news conference in Kyiv following the meetings with Zelenskiy and other European leaders. He added that Italian gas stockpiles are at 52% now and that “we are feeling safe now and for the winter” with those levels.

Ukraine, Romania Seek to Double Danube Grain Shipments (6:39 p.m.)

Transit of Ukrainian grain via Danube ports increased fourfold in the past month and the goal now is to further boost transit and to double it., Romanian President Klaus Iohannis said at a joint press conference in Kyiv.

Ukraine has started a pilot project with Poland on joint custom areas and has proposed the same thing to its Romanian partners, Zelenskiy added.

US Commits to 3 Years’ Technical Aid for Agriculture (6:03 p.m.)

US Agriculture Secretary Tom Vilsack announced a three-year agreement with Ukraine to share information and expertise to improve the nation’s farm productivity and supply-chain strength.

Germany, France, Italy Offer Support to Ukraine’s EU Candidacy (4:35 p.m.)

German Chancellor Olaf Scholz, French President Emmanuel Macron and Draghi backed Ukraine’s efforts to join the European Union, adding momentum and a show of support in the country’s efforts to fend off Russia’s invasion.

The leaders of the EU’s three biggest economies condemned Moscow’s attacks and called for investigations into alleged war crimes. They were joined by Romanian President Klaus Iohannis, as a representative of the bloc’s east, in the highest-profile delegation to visit Kyiv since Russia invaded.

“All four of us support the status of immediate candidate for membership,” Macron said. He added that France will deliver six additional Caesar cannons in addition to the 12 already transferred to Ukraine’s military.

Ukrainian Diplomat Calls on US for More Sanctions (4:32 p.m.)

Ukrainian Ambassador to the US Oksana Markarova said the US should increase sanctions on Russia, including full blocking penalties on all of the country’s banks, increased restrictions against individuals close to Putin and others responsible for the conduct of the war and called for the country to be designated as a state sponsor of terrorism.

“There is no such thing as private banking in Russia,” Markarova said, adding that the Kremlin can order financial institutions to step in and support those that have been sanctioned.

Dutch Foil Russian Plot to Infiltrate War Crimes Court (4:16 p.m.)

The Dutch secret service said it foiled an attempt by a Russian intelligence officer to infiltrate the International Criminal Court in The Hague posing as a Brazilian intern.

The alleged spy tried to enter the Netherlands in April and was sent back to Brazil after being recognized as a danger to national security, the service said. Covert access to the court’s building and systems would have been highly valuable to Russia because of the court’s investigations into the nation’s invasion of Ukraine, it said.

Putin’s Forum Preaches Self-Reliance as Foreigners Stay Away (2:47 p.m.)

Top Russian officials told the Kremlin’s annual economic showcase that the country is bearing up better under sanctions than they initially feared, touting a new model focused on domestic production as the country faces unprecedented international isolation over its invasion of Ukraine.

Fewer foreigners turned up at this year’s St. Petersburg International Economic Forum, an event that in the past drew major global leaders and top executives from the world’s biggest companies. They were replaced by local businesspeople and visitors from the Middle East, Asia and Russian-backed separatist-held areas of Ukraine who attended sessions on Russia’s need to become self-reliant, according to attendees.

Germany Floats Proposal to Beef Up NATO’s Eastern Defenses (1:29 p.m.)

Germany is proposing a new model to boost NATO’s defenses on the alliance’s eastern frontier with Russia by identifying units that can be deployed to Lithuania at short notice and link up with allied troops already on the ground, according to people familiar with the issue.

The approach would be an alternative to basing new troops more permanently in the most vulnerable member states. While some countries are looking at the plan for cues, it falls short of previous demands by NATO’s Baltic members, which have sought a permanent presence of a significant number of soldiers that could immediately counter any attack.

European Gas Surges 24% as Russian Cuts Escalate (1:17 p.m.)

Europe’s energy crisis deepened after Moscow reduced gas flows through the Nord Stream pipeline in a move that coincided with the visit to Kyiv of the EU leaders.

Germany’s top energy regulator urged consumers and industry to scale back natural-gas consumption to help fill storage sites ahead of the next heating season after Russia curtailed deliveries.

Benchmark gas futures increased as much as 24%, adding to a 46% rise already this week. Germany has called the reductions “politically motivated” and aimed at unsettling markets, challenging Gazprom PJSC’s statement that the halt was due to technical issues.

UK Sanctions Russian Linked to Forced Transfers and Adoptions (1:06 p.m.)

The UK sanctioned Russian Children’s Rights Commissioner Maria Lvova-Belova for her alleged involvement in the forced deportation of Ukrainian children to Russia and their subsequent adoption by Russians.

The British government also leveled penalties against Russian Orthodox Church Patriarch Kirill for his support of the war, a number of other allies of Putin, as well as military commanders and Russian and Myanmar arms dealers.

Leaders Visit Heavily Damaged Kyiv Suburb (11:45 a.m.)

During their visit, Scholz, Draghi, Macron and Iohannis were escorted through the heavily shelled Kyiv suburb of Irpin to get a direct impression of some of the damage caused by Russia’s attack.

Television footage showed the four leaders standing with grim faces in the streets of Irpin -- which was under Russian occupation for a month and the site of alleged war crimes -- as they were briefed by local officials. They will hold a news conference later on Thursday after the talks with Zelenskiy.

Scholz said in a tweet that the “brutal destruction” in Irpin has “long since become a symbol for the unimaginable cruelty of the Russian war and for senseless violence.”

Differing Accounts Given of Xi-Putin Phone Call (10:30 a.m.)

Russia and China gave alternative accounts of President Xi Jinping’s birthday call with Vladimir Putin on Wednesday, as both sides seek to manage perceptions of their relationship following Russia’s invasion of Ukraine.

The Kremlin readout said the two men discussed increasing economic cooperation, trade and military-technical ties and implied the Chinese leader endorsed Putin’s justification for the war. Chinese state broadcaster CCTV, by contrast, said Xi “actively promoted world peace and the stability of the global economic order.”

Sanctions ‘Having Smaller Impact Than Feared’ (10 a.m.)

Top officials told the Kremlin’s annual economic showcase that Russia is bearing up better under sanctions than initially feared, touting a new model focused on domestic production as the country faces unprecedented international isolation.

Engie Says Russia Reduced Gas Supply (9:30 a.m.)

France’s Engie SA said Russia has reduced gas shipments, echoing similar reports from German and Italian utilities as tensions escalate between Moscow and Europe.

Natural gas prices on the continent have jumped after Russia cut supplies through the largest link to Europe to less than half usual volumes. German Economy Minister Robert Habeck accused the Kremlin of trying to unsettle markets and prop up prices, but said that security of supply was guaranteed for now.

Kyiv Mayor Welcomes Leaders’ Visit (9 a.m.)

Kyiv Mayor Vitali Klitschko said the visit by the three EU leaders “is a sign of great support at a time when it is still a risk” to travel to the capital and that it “above all has great symbolic importance.”

“There can only be stability in Europe if Putin finally ends this cruel war against our country,” Klitschko was quoted as saying by Germany’s Bild newspaper.

Germany Lagging on Weapons Deliveries: Institute (7:30 a.m.)

The volume of weapons promised to Ukraine has increased significantly in recent weeks though Germany in particular is lagging behind on actual deliveries, according to the latest data collected by the Kiel Institute for the World Economy.

Poland and the UK have pledged and delivered considerably more than Germany, while Canada and Norway have made slightly smaller pledges but also sent much more, the institute said, citing data through June 7. In absolute terms, the US has already provided weapons worth around 10 times more than Germany, it added. “This helps to explain the Ukrainian government’s urgent appeals to the German government,” according to Christoph Trebesch, a Kiel Institute research director and head of the team compiling the Ukraine Support Tracker.

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