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Ukraine Latest: US Vows New Military Aid; Kyiv Economic Struggle

·8 min read

(Bloomberg) -- President Joe Biden held a video call Thursday with allies including leaders of the Group of Seven nations, the NATO military alliance, and the European Union. The talks, focusing in part on ways to bolster Europe’s energy supplies, came on a day when Washington announced more than $2.8 billion in additional aid for Ukraine and its neighbors and US Secretary of State Antony Blinken made a visit to Kyiv.

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The Pentagon has sent Ukraine its most accurate artillery shell, the GPS-guided Excalibur, according to budget documents. A plan to replenish the US stock of Excaliburs acknowledges for the first time that the Pentagon has been supplying Ukrainian forces with the shell.

Ukrainian President Volodymyr Zelenskiy said his country’s army had recaptured a few towns in the northeastern Kharkiv region, without elaborating. He later said that Ukraine’s army has “liberated more than 1,000 square kilometers” (386 square miles) of Ukrainian territory that Russia had occupied.

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

Key Developments

  • Biden, US Allies Discuss Russian ‘Weaponization’ of Energy

  • Putin’s Attack on Ukraine Grain Deal Belied by Shipping Data

  • German Anger Spills Over as Countries Balk at Gas-Sharing Deals

  • Sanctions Pull Russian Billionaires Tighter Into Putin’s Embrace

  • Blinken Visits Kyiv in New US Show of Support for Ukraine

On the Ground

Russian forces carried out continuous missile and air strikes, damaging infrastructure in the eastern and southern parts of Ukraine, the Ukrainian General Staff reported. Russia hit the northern city of Kharkiv with rockets again overnight, Interfax-Ukraine said, citing local authorities. The Institute for the Study of War said that Ukrainian forces are likely exploiting Russia’s deployment of forces away from the Izyum-Kharkiv area to retake territory and threaten Russian ground lines of communication there.

(All times CET)

US Sanctions Iranian Company for Providing Drones to Russia (9:32 p.m.)

The US Treasury is sanctioning an Iranian company charged with shipping drones to Russia for use in its war against Ukraine.

Treasury’s Office of Foreign Assets Control designated Tehran-based Safiran Airport Services, which it said has coordinated Russian military flights between Iran and Russia, including those that transported drones and related equipment along with the people who know how to operate them. Treasury contends that the Russian Air Force plans to use the Iranian drones alongside its own in Ukraine.

“Russia is making increasingly desperate choices to continue its unprovoked war against Ukraine,” Brian E. Nelson, Treasury’s under secretary for Terrorism and Financial Intelligence, said in a statement.

Biden, Allies Discuss Russian ‘Weaponization’ of Energy (7:20 p.m.)

Biden and allied nations considered ways to bolster European energy supplies amid Russian threats to cut off fossil fuel exports, which have triggered fears of a crisis on the continent.

Biden and his counterparts “discussed Russia’s weaponization of energy and additional steps to secure sustainable affordable energy supplies for Europe. They committed to continued close consultation on this issue,” White House Press Secretary Karine Jean-Pierre told reporters.

The leaders also spoke about supporting Ukraine militarily and economically after the US announced more than $2.8 billion in additional aid for the nation and and its neighbors. They also reaffirmed support for the “sustained imposition of costs on Russia to hold the Kremlin accountable for its aggression,’ Jean-Pierre said.

US Military Chief Says Ukraine Making ‘Steady’ Progress (5:24 p.m.)

It’s too early to assess Ukraine’s southern counter-offensive, but Kyiv’s progress is “steady and deliberate,” US General Mark Milley, chairman of the Joint Chiefs of Staff, said after a meeting of the Ukraine Contact Group at Ramstein Air Force Base in Germany.

The group met for the fifth time on Thursday and is positioning itself to back Ukraine’s self-defense for the “long haul,” US Defense Secretary Lloyd Austin told reporters after the meeting.

“We won’t let up in our support for Ukraine’s self defense, not today, not tomorrow,” Austin said. Milley said Ukrainians have struck more than 400 Russian targets with the US-provided High Mobility Artillery Rocket System (HIMARS.)

Ukraine’s GDP Contracted 37% Last Quarter (4:54 p.m.)

Ukraine’s GDP shrank at a faster pace in the second quarter, falling 37% year-on-year as Russia’s full-scale invasion damaged production, disrupted supply chains, and displaced millions of people. It was the steepest decline since at least 2004.

Ukraine’s economy ministry said GDP may fall 33.2% for the whole of 2022. The partial unblocking of three Ukrainian Black Sea ports, which allowed seen grain exports over the past month, will helps the situation, the ministry said.

Ukraine Says Norway to Provide Hellfire Missiles (3:24 p.m.)

Norway will provide additional equipment to Ukraine’s army, including Hellfire precision-strike missiles, Ukraine Defense Minister Oleksii Reznikov from a meeting of the Ukraine Contact Group at Ramstein Air Base in Germany.

Ukraine Says It Has Recaptured 270 Square Miles of Territory (2:20 p.m.)

Ukrainian troops have moved forward as far as 50 kilometers (31 miles) into Russian-held territories near Kharkiv in the country’s northeast this week, said Oleksiy Hromov, a spokesman for the Ukrainian armed forces.

Advances near Kramatorsk were about 2 kilometers, and closer to 3 kilometers near Slovyansk. Heavy fighting continued near the Russia-seized city Kherson in Ukraine’s south, Hromov said at a briefing.

Kyiv’s troops liberated more than 20 localities near Kharkiv, Hromov said. In all, he estimated recently liberated areas at more than 270 square miles of territory near Kharkiv and along the Southern Buh axis.

Poland, Baltics Target Russia Visas (1:52 p.m.)

Poland and the Baltic states will impose tough restrictions on visas issued to Russian citizens, calling the recent influx of tourists a “serious threat” to national security.

The European Union nations that share a border with Russia said they’ll turn away most Russians seeking to enter the EU on visas for tourism, culture, sports and business by Sept. 19. The measures fall short of a full ban for those entering the bloc’s visa-free Schengen area.

German Anger as Countries Balk at Gas-Sharing Deals (1:11 p.m.)

Hope is dimming in Germany that it will be able clinch more gas solidarity agreements with European Union partners beyond the ones already in place with Denmark and Austria, a potential further hindrance to Berlin’s ability to mitigate the effects of the energy crisis.

Read more: German Anger Spills Over as Countries Balk at Gas-Sharing Deals

Blinken Visits Children’s Hospital, Meets Terrier in Kyiv Trip (1:05 p.m.)

US Secretary of State Antony Blinken visited the National Specialized Children’s Hospital Ohmatdyt while in Kyiv, meeting patients including several who were seriously injured in Russian strikes.

Blinken also met Patron, the explosive-sniffing Jack Russell terrier who’s become a social media star for his work finding mines. Patron, whose name means “cartridge” in Ukrainian, is “world-famous,” Blinken said.

“We have a long history on working on de-mining,” Blinken told hospital staff. “We’re honored to be working with you on that.”

Ukraine Keeps Policy Rate at 25% (1 p.m.)

The National Bank of Ukraine left the key policy rate unchanged at 25%, the highest since 2015, as expected. The rate has been at that level since June.

“Under current conditions, such a level of the key policy rate is sufficient to maintain exchange-rate stability and keep inflation processes under control,” Deputy Central Bank Governor Serhiy Nikolaychuk said in Kyiv.

Blinken Travels to Kyiv in New Show of Support (12:25 p.m.)

US Secretary of State Antony Blinken made an unannounced visit to Kyiv Thursday for meetings with Ukrainian officials as the country’s military presses to regain territory that Russia seized in the first six months of its invasion. Blinken met with his Ukrainian counterpart Dmytro Kuleba for 30 minutes.

The trip to Ukraine is Blinken’s third since the start of the war on Feb. 24 and his fifth since becoming the Biden administration’s top diplomat, according to the State Department.

US Defense Chief Announces $675 Million in Fresh Ukraine Funding (11:50 a.m.)

US Defense Secretary Lloyd Austin said the US had approved $675 million in fresh military aid to Ukraine as the war enters a “new phase” with Kyiv’s counteroffensive seeking to roll back Russia’s invasion.

The US also plans to provide an additional $2 billion in foreign military financing to back Ukraine’s efforts as well as 18 neighboring nations including NATO allies, according to a State Department official.

Austin commented at a meeting of the Ukraine Contact Group at Ramstein Air Base in Germany on Thursday, where US and European officials pledged to stand by Ukraine. The US has committed a total of $6.3 billion to Ukraine since the group’s last meeting.

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