Most Read from Bloomberg
Finland’s leader phoned Russia’s Vladimir Putin on Saturday, telling him that the invasion of Ukraine had “altered the security environment” for the Nordic country. Putin told Sauli Niinisto joining NATO would be a mistake. Finland has scheduled a press conference for Sunday that’s likely to focus on NATO, and its foreign minister was confident that Turkey’s objections won’t derail the bid.
NATO foreign affairs ministers will meet in Berlin on Sunday from 9 a.m. local time, while the NATO Secretary General and Germany’s foreign affairs minister will hold a press conference at 2:30 p.m.
The European Union is offering gas importers updated guidance on how to buy fuel from Russia without breaching EU sanctions. G-7 foreign ministers called on China “not to justify” Russian actions in Ukraine.
President Volodymyr Zelenskiy said he met Minority Leader Mitch McConnell and several other Republican senators in Kyiv. India prohibited most wheat exports in the latest bout of global food protectionism.
(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)
Russia’s Backyard Weighs Opportunities, Threats From Putin’s War
EU Drafts Plan for Buying Russian Gas Without Breaking Sanctions
‘Straw Owner’ Hides $1 Billion Worth of Russian Yachts, US Says
EU Draft Cuts Euro-Area GDP Forecast, Sees 6.1% Inflation
NATO Expansion Could Finally Shore Up Alliance’s Weakest Flank
Germany Girds for Day of Reckoning in Gas Showdown With Russia
A Visual Guide to the Russian Invasion of Ukraine
All times CET:
Russia’s Backyard Weighs Opportunities, Threats From Putin’s War (7 a.m.)
With Putin’s invasion of Ukraine stalling, other former Soviet states are weighing prospects for pulling away from Moscow’s orbit even as they fear risks of potential border conflict.
The war is sending tremors along an arc of instability stretching from Ukraine’s neighbor Moldova through the Caucasus and into Kazakhstan in central Asia. Putin’s intentions have become an urgent national security question in countries with so-called “frozen conflicts” or that have large pro-Russian minorities.
UniCredit, Citigroup Explore Asset Swaps to Exit Russia: FT (6 a.m.)
UniCredit SpA and Citigroup Inc. are considering swapping assets with Russian financial institutions as they try to exit the country while avoiding large writedowns on their operations there, the Financial Times reported.
The banks have explored deals to swap their Russian businesses for the local buyer’s foreign units, people with knowledge of the plans told the newspaper. UniCredit is also working on deals with non-sanctioned banks to swap its Russian loan books for their foreign credit portfolios, according to the report.
Ukrainian Band Kalush Orchestra Wins Eurovision (1:20 a.m.)
The Ukrainian band Kalush Orchestra won the Eurovision Song Contest in a show of support for the war-torn nation, the Associated Press reported. The public vote from home was decisive in securing the band’s victory, according to the report.
Front man Oleh Psiuk made a plea to the live crowd and television audience of millions for the remaining Ukrainian fighters trapped in the Azovstal steel plant to be freed, AP said. Ukrainian President Volodymyr Zelenskiy celebrated the victory in a Telegram post, saying that Ukraine will host the contest next year and hopes to “one day” host participants and guests in Mariupol.
‘Straw Owner’ Hides $1 Billion Worth of Russian Yachts, US Says (11:15 p.m)
US authorities are alleging that a Russian tycoon acted as the “straw owner” of two yachts worth more than $1 billion, including the $700 million Scheherazade, a superyacht linked to Putin.
Court filings in the South Pacific island of Fiji, where the US is trying to seize the $325 million yacht Amadea, reveal what US officials allege is a nest of offshore shell companies that were set up with the help of a yacht broker to conceal the true owners of both vessels — an allegation that lawyers for the listed owner and the broker dispute. A hearing is scheduled for Wednesday in Fiji on the fate of the Amadea.
The layers of companies and trusts, stretching from the Marshall Islands to Switzerland, indicate the beneficial owner of both yachts is the former president of state-controlled Rosneft OJSC, Eduard Khudainatov, according to the documents. Khudainatov doesn’t appear on any sanctions lists.
EU Drafts Sanctions-Compliant Russia Gas Buying Plan (9:30 p.m.)
The European Union is set to offer gas importers a solution to avoid a breach of sanctions when buying fuel from Russia and still effectively satisfy President Vladimir Putin’s demands for payment in rubles.
In new guidance on gas payments, the European Commission plans to say that companies should make a clear statement that they consider their obligations fulfilled once they pay in euros or dollars, in line with existing contracts, according to people familiar with the matter. The EU’s executive arm told the governments that the guidance will allow them to purchase gas without breaching EU sanctions.
The clock is ticking because many firms have payment deadlines this month. If they don’t pay, gas flows could be cut off.
Turkish Foreign Minister Criticizes PKK Support (7:50 p.m.)
Turkish Foreign Minister Mevlut Cavusoglu criticized Sweden and Finland for supporting the Kurdistan Workers’ Party, or PKK, ahead of a meeting with his NATO counterparts. “If a country is going to be a NATO member, it should not support terror organizations,” he said.
“These countries are supporting terrorists and that is why a majority of Turkish people are against their membership,” Cavusoglu said.
Asked about the comments, Luxembourg Foreign Minister Jean Asselborn said “none of the 30 allies should be allowed to resist” membership for Sweden and Finland if they want to join. “It’s a game that would place NATO in a bad light, so I hope it won’t be the case,” he told reporters.
Finland Says It’s Confident NATO Bid on Track (6:51 p.m.)
Finnish Foreign Minister Pekka Haavisto said he’s confident his country and Sweden will become NATO members “in the end.” He spoke with reporters in Berlin on Saturday before a meeting with foreign ministers of the alliance.
Asked about potential Turkish opposition, Haavisto said that “every member country of NATO, of course, has the possibility of prolonging the process.” Turkish President Recep Tayyip Erdogan on Friday expressed his government’s concern about Finland and Sweden joining NATO.
Haavisto stressed Helsinki’s intention to maintain a peaceful border with Russia and to keep the line of communication open. “We don’t ask for permission, but we communicate,” he said. Finland’s president earlier spoke with Vladimir Putin to inform the Russian leader of the rationale behind the country’s interest in NATO.
Zelenskiy Says He Met US Republican Senators (3:15 p.m.)
Minority Leader Mitch McConnell led a delegation of US Republican senators to Kyiv, where they met with Ukrainian President Volodymyr Zelenskiy on Saturday.
Senators Susan Collins of Maine, John Barrasso of Wyoming and John Cornyn of Texas were with McConnell, according to a photograph released by Zelenskiy’s office.
Finnish President Phones Putin Over NATO Plan (1:09 p.m.)
Finland’s President Sauli Niinisto phoned Russia’s Vladimir Putin to inform him that the Nordic country will decide in the next few days whether to seek NATO membership, the president’s office in Helsinki said.
“The conversation was direct and straight-forward and it was conducted without aggravations,” Niinisto said in a tweet.
Putin told his Finnish counterpart that Helsinki’s plan to join NATO would be a “mistake because there are no threats to Finland’s security” and could harm relations between their countries, according to a statement from the Kremlin. The two leaders had a “frank exchange of opinions,” the Kremlin said.
Mariupol Defenders’ Relatives Turn to Xi for Help (12:53 p.m.)
Relatives of Ukrainian soldiers in the Azovstal steel plant in Mariupol have asked Chinese President Xi Jinping to act as an intermediary in talks with Russia to help evacuate the defenders and provide safe passage to a third country.
“There is only one person in the world” left to turn to, Natalka Zarytska, wife of one of the defenders, said in a televised briefing. Citing the close ties between Moscow and Beijing, she said it would “be difficult for Putin to refuse” a request from China’s leader.
Zarytska said that among the hundreds of wounded at Azovstal are men “without limbs and without pain relief.” The government in Kyiv has spoken to humanitarian groups and world leaders including the presidents of France and Turkey and Pope Francis about an evacuation. The defenders this week turned to billionaire Elon Musk for help.
Seizing Russian Assets Serves Justice, Germany Says (12:30 p.m.)
Russia is responsible for the devastation in Ukraine and it’s “a matter of justice” that it should be held accountable via the seizing of frozen assets, said German Foreign Minister Annalena Baerbock.
Speaking after talks with G-7 counterparts in Germany, Baerbock called seizing assets “anything but easy” in legal terms, and noted there are few precedents. If EU countries were to do so, it would have to be legally watertight and stand up at the European Court of Justice, she said, adding that her Canadian counterpart had indicated it’s legally possible there.
“As Europeans we have a different legal framework, so that we always need more time for such a step,” Baerbock told reporters. “But there are indeed some good reasons why we too might choose this path.”
G-7 Urges China Not To Justify Russia’s War (12 p.m.)
Group of Seven foreign ministers issued a long list of demands on Beijing’s stance toward Ukraine after talks in Germany, including a request “not to justify Russian action” there.
The G-7 officials called on China to “resolutely urge Russia to stop its military aggression against Ukraine,” according to a joint statement. They also called on Beijing not to assist Russia, not to undermine sanctions, and “to desist from engaging in information manipulation, disinformation and other means to legitimize Russia’s war of aggression.”
The G-7 is committed to “both short-and-long term-support” for Ukraine, according to the statement. “We are determined to accelerate a coordinated multilateral response to preserve global food security and stand by our most vulnerable partners in this respect,” it added.
Scholz Doesn’t See Change in Putin Stance (11:30 a.m.)
Germany Chancellor Olaf Scholz said he detected no change of attitude in Vladimir Putin when he spoke by telephone with the Russian president for more than an hour on Friday.
“One thing is clear here: Russia has not achieved any of the war aims set out at the start,” Scholz said in an interview with the T-Online news portal. “Ukraine has not been conquered, but is defending itself with great skill, courage and self-sacrifice.”
“It should gradually be becoming clear to Putin that the only way out of this situation is to reach an agreement with Ukraine,” said Scholz. In a tweet, Scholz referred to Putin’s “insane idea” of expanding the Russian empire.
Finland Counts on US Support to Win Over Turkey (11:29 a.m.)
Finnish President Sauli Niinisto pushed back against suggestions Turkey would prevent his country and neighboring Sweden from joining NATO, given that the US supports the move.
President Recep Tayyip Erdogan said on Friday Turkey doesn’t favor Sweden and Finland becoming members of the defense alliance, citing concerns over Kurdish “terrorists.” NATO welcomes new members unanimously, and a decision to apply for entry is expected on Sunday from the two Nordic countries that are reacting to Russia’s war in Ukraine.
Read more: Finland Counts on US Support to Win Over Turkey in NATO Bid
Ukraine Says It Destroyed Russian Pontoon Bridges (9:21 a.m.)
Ukraine’s army said it blew up pontoon bridges Russian forces were building near the village of Bilohorivka on the Siverskyi Donetsk River in the Luhansk region, although some Russian soldiers managed to cross.
Russians troops were pushed back after two days of heavy fighting, the Ukrainian paratrooper brigade that took part in the fight said late Friday, adding that the US and UK anti-tank weapons helped them to repel the attack.
Regional governor Serhiy Haiday said almost 90 Russian heavy weapons, including a helicopter, was destroyed in the hostilities and that Ukraine’s army is completing the liberation of the other bank of the river.
NATO Expansion Could Shore Up Alliance’s Weak Flank (6 a.m.)
While much of the focus of deteriorating east-west relations has been on Germany’s new military plans, the expected accession of Finland and Sweden to the 30-member transatlantic alliance is part of the biggest shift in European foreign policy to emerge since Russia’s invasion of Ukraine.
After waging war in part to stop NATO’s expansion, Putin is now confronted with the opposite.
Zelenskiy Says Ukraine Pushing Russia From Kharkiv Region (8:15 a.m.)
Ukraine has retaken a total of over 1,015 villages and towns, including six in the previous 24 hours, as its army is gradually pushes Russian soldiers out of the Kharkiv region, President Volodymyr Zelenskiy said Friday in his night video address. He urged businesses to re-open in safe territories to add jobs.
Talks on the evacuation of wounded Ukrainian wounded soldiers from Mariupol’s Azovstal steel plant are “very complex,” Zelenskiy said, adding that Kyiv has involved all possible influential intermediaries in the effort.
Azovstal’s holdouts have criticized the government in Kyiv for failing to defend southern Ukraine, where Russia made much faster progress, and said it had abandoned Mariupol’s garrison. Russia continues airstrikes in the area.
Read more: Mariupol Steel Plant’s ‘Dead Men’ Defenders Call for Rescue Plan
Ukraine Appears to Have Won Battle for Kharkiv, U.S. Group Says (6 a.m.)
Ukraine “appears to have won the Battle of Kharkiv,” according to the Institute for the Study of War.
Russia has likely decided to withdraw fully from its positions around Kharkiv in the face of Ukrainian counteroffensives and the limited availability of reinforcements, the Washington-based group said in a daily bulletin.
There’s evidence that “Moscow is focused on conducting an orderly withdrawal and prioritizing getting Russians back home before allowing proxy forces to enter Russia, rather than trying to hold its positions near the city,” ISW said.
India Stops Most Wheat Exports (5 a.m.)
India prohibited most wheat exports that the world was counting on to alleviate supply constraints sparked by the war in Ukraine, which has largely halted Kyiv’s ability to ship.
Bloomberg News reported earlier this month that a record-shattering heat wave has damaged wheat yields across the South Asian nation, prompting the government to consider export restrictions.
Exports will still be allowed to countries that require wheat for food security needs and will be based on the requests of their governments, India said.
Most Read from Bloomberg Businessweek
©2022 Bloomberg L.P.