June 22, 2022 Ukraine and the World – Against russia’s Aggression. Sanctions in Action

6/22/2022
singleNews

The European Union has already resolved the issue of granting Ukraine the status of a candidate for EU membership. This was emphasized by Minister of Foreign Affairs of Poland Zbigniew Rau following a meeting of EU Ministers of Foreign Affairs. He pointed out that during the talks in Luxembourg, not a single diplomat (27 countries) objected to granting Ukraine the status of a candidate for membership in the European Union. Thus, during the meeting in Brussels on June 23-24, EU leaders will only need to approve this decision.

Ukraine's candidate status for EU membership will not give Kyiv automatic access to EU funds. However, the EU can still take over the management of Ukraine's post-war reconstruction. And the countries of the Union will help financially provided that these investments are related to reforms in Ukraine. This was stated by President of the European Commission (EC) Ursula von der Leyen. According to her, the EC has already submitted a proposal to manage the reconstruction of Ukraine.

The European Union plans to finalize a € 9 billion financial package to support Ukraine. The new macro-financial assistance program is expected to include 25-year loans with a 10-year grace period to repay the principal. Interests are planned to be covered by the EU budget. Ukraine may receive the first tranche of the new aid package this summer. Three or four more tranches may be transferred by the end of the year, but this will depend on Ukraine's guarantees and financial needs. The program must be finally approved by all 27 participating countries and the European Parliament.

President of Poland Andrzej Duda pointed out that all the countries of the Three Seas support Ukraine's official status of a candidate for EU membership. The participating countries of the Three Seas Initiative have created a new partnership format and granted Ukraine the status of a participating partner. This was stated by the Polish President at the summit of the Three Seas countries.

“We have decided to create a special new type of partnership with the Three Seas Initiative in addition to the strategic partnership partnership through participation. This is a new type of partnership, which is designed not only for Ukraine. We gave it to Ukraine today, but we assume that such a partnership can be shared by those countries that are in Central Europe and are not members of the European Union, but seek to join it”, said Duda.

Ukraine may need up to 1 trillion euros ($ 1.1 trillion) in foreign aid to compensate for the damage caused by the russian invasion. This was stated by President of the European Investment Bank (EIB) Werner Hoyer. “I voiced the trillion because I saw figures in the public space that I think are completely unrealistic when I look at the level of destruction in Ukraine”, Hoyer said. The President of the EIB added that the bank seeks to redistribute the commitments in the amount of 1-1.5 billion euros for the reconstruction of Ukraine. He said he could get permission to do so this week.

In its draft military budget bill for fiscal year 2023, the US House of Representatives’ Committee for the Armed Forces proposes to provide $ 450 million in assistance to Ukraine. That's 150 million more than the White House requested. The funds should be used to help the Armed Forces of Ukraine. The bill also provides for certain provisions on the replenishment of military equipment of allied countries that have transferred their equipment to Ukraine and the provision of humanitarian support for the demining of Ukrainian territories.

Slovenia’s authorities have handed over to Ukraine 35 armored infantry amphibious vehicles BMP M80A – tracked vehicles with a crew of three soldiers and a place for landing troops. It is equipped with a 20 mm cannon, a machine gun and anti-tank missile launchers Maljutk.

Germany has handed over to Ukraine the Panzerhaubitze 2000 self-propelled artillery units (SAUs). They have already become part of the arsenal of 155-mm howitzers of the Armed Forces of Ukraine, Defense Minister Oleksiy Reznikov said. “German Panzerhaubitze 2000 with trained Ukrainian crews appeared in the Ukrainian artillery family. Importantly. This is the sixth type of 155-mm artillery that strengthens our defense”. Panzerhaubitze 2000 was developed by Krauss-Maffei Wegmann in 1998. Its firing range is 30-50 kilometers. The self-propelled gun is capable of firing three shells in nine seconds or ten in 56 seconds at a range of up to 30 kilometers.

Germany’s government has released a full list of weapons to be provided to Ukraine as part of military aid. Some of the equipment will come from the Bundeswehr's warehouses and the rest – from industry funded by the government's modernization initiative.

So, Germany will provide Ukraine with:

seven Panzerhaubitzen 2000 self-propelled howitzers, including adaptation, training and spare parts; 54 M113 armored personnel carriers with weapons (systems from Denmark, re-equipment financed by Germany); 30 GEPARD anti-aircraft tanks, including about six thousand anti-aircraft munitions; IRIS-T air defense system; three MARS multiple rocket launchers with ammunition.

In addition, Berlin will send to Kyiv in the form of military assistance: 10 thousand artillery pieces of ammunition; 53 thousand anti-aircraft ammunition; 5.8 million rounds of ammunition for small arms; five thousand combat helmets; 100 thousand first aid kits; eight mobile ground-based radars and thermal imaging devices; eight reconnaissance drones; 10 protected cars; seven mufflers; eight electronic means of protection against drones; four mobile, remotely controlled and protected demining devices; 65 refrigerators for medical supplies; one point of decontamination of vehicles; 100 auto-injectors; 14 sensors and silencers for protection against drones; 10 pieces of unmanned equipment; 32 reconnaissance drones; COBRA artillery support radar; 80 Toyota pickups; 22 trucks.

The German government stressed that for security reasons, no information will be provided on the methods and timing of arms deliveries.

The EU plans to continue to impose sanctions on russia. The EU is working to determine the sectors that could be hit. One of them may be russian gold. Gold is an important asset of russia's central bank, which has previously been restricted from accessing foreign exchange assets in the West. At the beginning of 2022, the value of monetary gold in russia's international reserves exceeded $ 132 billion, and the share of gold in reserves was 21%.

Ukraine has become an observer of the European Blockchain Partnership (EBP), the third non-EU country to join the union. EBP is a project to use blockchain technologies to provide cross-border public services. Its goal is to create a pan-European blockchain and integrate the digital economic spaces of member countries. This will enable millions of Ukrainian refugees in Europe to obtain recognition of their higher education documents and driver's licenses.

In addition to Ukraine, the European Blockchain Partnership involves 27 EU countries, as well as Norway and Liechtenstein.

russia's aggression against Ukraine and its consequences for Europe's security will be the focus of the summer session of the Parliamentary Assembly of the Council of Europe (PACE), which began this week in Strasbourg. PACE President Tini Cox called on russia's leadership to “immediately stop the war, for which there was no reason”.

This year's session is the first since the pandemic of COVID-19, which takes place in a full-fledged face-to-face format in the physical presence of PACE MPs. The leadership of the assembly made an exception for Ukraine, because not all Ukrainian MPs have the opportunity to come to Strasbourg in person due to understandable circumstances.

The block of humanitarian issues related to the consequences of the war in Ukraine consists of three resolutions. It will be considered on June 22. The resolutions address migration issues caused by russian aggression, protection of unaccompanied refugee children without parents or caregivers, and legal protection of women during and after military conflicts. In addition, at the opening of the session, MPs voted to hold an ongoing debate on the consequences of the blockade of the Black Sea. Separately, PACE MPs are going to approve two resolutions on human rights violations in russia.

“As long as russia's war continues, Luxembourg will stand with Ukraine”, Prime Minister of Luxembourg Xavier Bettel wrote on Twitter after visiting Kyiv and Borodyanka, which had been hit hard by russian aggression.

Journalists have a special responsibility because of russia's war against Ukraine. This was emphasized by Director-General of Deutsche Welle (DW) Peter Limbourg in his speech at the opening of the Global Media Forum in Bonn. According to him, media workers are unable to end the war against Ukraine, but they can contribute to its perception. The CEO of DW noted that the company will one day be able to resume the work of the office in moscow, and today the work of journalists is receiving more attention, as more and more people in russia understand what content russian media are currently spreading.

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Deliveries of cars and components from China to russia are declining every month. According to Chinese customs statistics, imports of cars to russia in March were $ 190.7 million, in April – $ 84.6 million, in May – $ 32 million. Imports of components and spare parts to russia also decreased: in February they made $ 117.1 million, in March – $ 76.3 million, in April –$ 81.3 million. Chinese automakers are in no hurry to supply russia due to the general shortage of cars in the world, difficulties with logistics, as well as unclear policies of the russian authorities regarding the future of the automotive industry.

russian subscribers now have to pay for SIM cards. The largest mobile operators have started charging for a SIM card when concluding a contract for communication services. This decision was made due to the fact that in recent months the cost of SIM cards for operators has increased 3.5 times: European manufacturers no longer supply them and they had to switch to Chinese SIM cards. Prior to the russian military invasion of Ukraine, russian operators bought SIM cards from major global vendors, including European Gemalto, Giesecke & Devrient and others. Given the mass production, their price was relatively low. Having lost the opportunity to buy SIM cards from European manufacturers, operators have to switch to more expensive Asian vendors.

According to the sberindex, which measures retail spending on sberbank's bank cards, as of June 19, russia's nominal spending on food had increased by 15.1% and on services by 16.1%. At the same time, according to romir, there is a decrease in the frequency of purchases and the amount of the average check in the product segment, frequent small purchases, taking into account inflation of non-food products of daily demand.

On June 20, sberbank's depository receipts were excluded from the list of securities admitted to trading on the London Stock Exchange.

sberbank and vtb no longer transfer currency to other russian banks.

The state duma has passed a law that protects those who are engaged in parallel imports (importing goods into russia without the consent of the right holders), from criminal and administrative liability.

Reductions in meat exports due to sanctions on transport restrictions and declining domestic demand due to falling incomes could significantly worsen russia's pork producers. Market participants fear that by the end of the year the average price of pork may fall to 10% and this will have a bad effect on producers. Large companies are already stopping the implementation of new projects.

The general situation is negatively affected by the fact that the increase in the cost of grain and feed components purchased in foreign currency has led to an increase in the average annual cost of pork in 2021 by 25-30%. This critically complicates the repayment of loans to businesses in the industry. The russian meat processing enterprises’ technological dependence on equipment imports also remains relevant. Up to 80% of equipment and its components are manufactured in the EU, and in the event of its failure, it will be difficult to repair, and therefore they will have to stop or reduce production.

Despite the russian government's declaration of opening a “window of opportunity for business after the departure of foreign competitors”, in real life only 30% of entrepreneurs in the small and medium business sector are considering new niches. The reasons are the lack of financing: investments in the development and adaptation of companies to new conditions are hampered by both the record decline in entrepreneurial revenue and reduced availability of credit. New data on business and investment activity of small and medium-sized enterprises also indicate a deterioration in moods in the sector. In particular, according to a survey of 1.8 thousand companies, 14% reported a reduction in staff, 12% a reduction in investment. For the first time since February 2021, more than 50% of companies announced a decline in sales.

Due to the sanctions, russian chemical companies have problems with the purchase of foreign vanadium catalysts needed for the production of sulfuric acid. Experts believe that a change in raw materials could lead to a malfunction of imported equipment, while switching to russian catalysts will take at least six years. The issue is especially relevant for petrochemistry, where for changes of the catalyst the warranty on the product may be lost. “Attempts to meet the needs of catalysts have been made in our country at least since the 1960s. However, so far foreign supplies have provided from 37% to 100% of demand, depending on the position”, said malkov from the company kept.

Owners of fertilizer companies that have come under international sanctions are massively transferring property to fictitious persons. Recently, the owner of the “akron” kantor has lost control of this chemical company. He handed over a share of 45.1% to three of his top managers. According to an independent expert khazanov, although kantor formally reduced his stake in the company's capital to remove it from the sanctions, he was in fact unlikely to step down from managing the akron group. Earlier, almost all owners of russian fertilizer producers reduced their share in companies. In particular, at the end of March, mazepin ceased to be a controlling shareholder of uralkaliy, having sold a 52% stake in the “basic chemical company uralkhim” and “uralkhim”​​ ​​and transferred a controlling stake to the company's two top managers. And in yevrokhim, melnichenko handed over control to his wife the day before the European Union imposed sanctions on him in March. Rector of st. petersburg mining university litvinenko also handed over his package in fosagro (20.6%) to his wife. The German company Linde informed gazprom about the refusal to design and build an lng plant in ust-luga. The gas liquefaction project was implemented by Linde in a consortium with Renaissance Heavy Industries. The EPC contract will be terminated soon. Linde has stated its principled position on refusing to cooperate with gazprom.

At a meeting of the committee of the federation council on social policy, minister of labour kotyakov said that there is “growing tension” in the russian labor market. According to him, the number of the registered unemployed increased in June, but he did not specify the exact figure. kotyakov said that by June the number of the unemployed in russia was almost 680 thousand, but in June there was an increase in the number of the unemployed registered at employment centers.

After the mass refusal of the solvent population of russia to holiday in the temporarily occupied Crimea, the authorities decided to compensate for the losses at the expense of retirees and government employees. Due to the closure of Simferopol airport, they are going to be delivered by charter buses from other regions of russia.

russia has blocked access to the website of the British newspaper The Daily Telegraph.

Human rights activists of the Civic Assistance Foundation point to the historical minimum of foreign refugees admitted to russia. According to the official information of the ministry of internal affairs of the russian federation – only 304 people. At the same time, the report “Analysis of Migration Statistics” published on the occasion of the International Refugee Day states that, compared to the beginning of last year, the number of foreigners, including from Ukraine, who received russian citizenship, has significantly decreased. The authors of the report are surprised by these statistics against the background of statements by russian officials “about hundreds of thousands of refugees from Ukraine who arrived in russia”. “According to the ministry of internal affairs, in the first quarter of 2022, 17 people applied for refugee status and 5,461 for temporary asylum”, reads the report.