Ukraine Latest: US Seeks to Steer India Away From Russian Arms

  • In Business
  • 2022-05-18 02:24:21Z
  • By Bloomberg

(Bloomberg) -- The US is preparing a military aid package for India that aims at increasing security ties and reducing its reliance on Russian weapons, people familiar with the matter said.

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Ukrainian President Volodymyr Zelenskiy broadened his appeals to the outside world by speaking via video link at the opening of the Cannes film festival, where he referenced Charlie Chaplin's film about Nazi Germany -- "The Great Dictator."

Russia said its recession will last longer than previously thought, while the US was set to curb Moscow's ability to make debt payments, raising the odds that President Vladimir Putin's government will be pushed to default.

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

Key Developments

  • US Seeks to Wean India From Russia Weapons With Arms-Aid Package

  • US Set to Block Russian Debt Payments, Raising Odds of Default

  • US Seeks to Wean India From Russia Weapons With Arms-Aid Package

  • Oil Falls as US to Allow Talks With Venezuela's State Producer

  • Biden to Host Nordic Leaders in Show of Support for NATO Bids

  • In USSR Flashback, Russians Are Hunting for Black-Market Dollars

All times CET:

Australia Imposes More Sanctions (3:11 a.m.)

Australia has sanctioned 11 individuals and 12 entities for promoting Russian propaganda and disinformation, building on the measures already taken against 32 propagandists in March, Foreign Minister Marise Payne said in a statement.

Australia has now sanctioned 827 individuals and 62 entities in response to Russia's invasion

US Readies Aid Package for India (2:09 a.m.)

The US military aid package under consideration would include military financing of as much as $500 million, according to one person, which would make India one of the largest recipients of such aid behind Israel and Egypt. It's unclear when the deal would be announced, or what weapons would be included.

Read more: US Seeks to Wean India From Russia Weapons With Arms-Aid Package

India is the world's largest buyer of Russian weapons, although it has scaled back that relationship of late. Its dependence on Russia for weapons against neighbors China and Pakistan is a big reason Prime Minister Narendra Modi's government has avoided criticizing Russian President Vladimir Putin over the war in Ukraine.

Zelenskiy Addresses Cannes Film Festival (11: 25 p.m.)

President Zelenskiy, a former actor and producer, urged the world of cinema to help fight for freedom and battle a "dictator" in his address to the Cannes film festival, citing the need for a new Charlie Chaplin.

"As then, there is a war for freedom," he said, adding, "words are needed to sound like in 1940 from all screens of the free world."

Separately, in his nightly video address to Ukrainians, Zelenskiy said that efforts to get more fighters out of the Azovstal steel plant continue and "the most influential international middlemen are involved," without providing details.

US to Block Russia From Repaying Bondholders (9:35 p.m.)

The Biden administration is poised to prevent Russia from being able to make payments to US bondholders, a move that could bring Moscow closer to defaulting on its debt.

The Treasury is expected to let a temporary exemption -- which had enabled Russia to stay current on its payments, lapse after it expires next week, according to people familiar with the matter.

EU Weighs Tapping Seized Oligarch Assets to Rebuild Ukraine (9:05 p.m.)

The European Union will propose issuing joint debt and explore using proceeds from assets that were seized from sanctioned oligarchs to fund the reconstruction of Ukraine.

The European Commission will propose on Wednesday to also use fresh grants coming from member states and third countries, according to a draft proposal of the EU's plan seen by Bloomberg.

Russia Warns Recession Will Last Longer, Tass Says (7:45 p.m.)

Russia is heading into a recession amid high commodity prices for the first time in recent memory, the Economy Ministry said, according to Tass, as sanctions squeeze the economy.

Gross domestic product will contract by 7.8% this year and 0.7% in 2023, according to the Economy Ministry. High energy prices will keep the cash flowing in, with the current account surplus seen reaching a record of $191 billion this year. The ruble's recent rally is likely to reverse into declines later in the year, while incomes fall and unemployment rises.

The official forecast for the contraction remains milder than those seen by some economists who expect a decline of 12% or more, making this year the worst performance in a generation.

Czech EU Presidency to Prioritize Ukraine Bid (5:10 p.m.)

Ukraine's application to join the European Union will be a top priority for the Czech Republic when it takes over the bloc's rotating presidency from July, Foreign Minister Jan Lipavsky said.

Lipavsky said in an interview that he was convinced Ukraine could beat back Russia because of the delivery of modern, western-made heavy weapons that outclass the Soviet-era arms and older designs that Moscow is limited to producing because of technology sanctions.

Hungary Outlines Cost to Ditch Russian Oil (5:05 p.m.)

Prime Minister Viktor Orban's government told EU counterparts that it will cost at least $810 million to revamp Hungary's oil industry, as Budapest continues to obstruct a block-wide ban on Russian crude.

Hungary said 550 million euros ($580 million) were needed to overhaul its refineries to comply with the ban, and another 220 million euros for a pipeline from Croatia, according to people familiar with EU discussions this week and documents seen by Bloomberg. Additional funds may be needed to adapt to a potential price spike resulting from a ban on Russian imports.

Putin: EU Committing Economic 'Suicide' (3:25 p.m.)

Europe will face the highest energy prices in the world over the long term if it rejects Russian supplies, and this could have "irreversible consequences" for much of the continent's industry, President Putin said, adding that the EU is committing economic "suicide."

Speaking at a meeting on the development of the oil industry Tuesday, Putin said that energy inflation was due to Europe's turn away from traditional energy in favor of alternative energy, as well as political measures taken in response to the conflict in Ukraine. "They are trying to blame energy inflation on us, give it our names, blame their systemic mistakes on us," Putin said.

Biden to Host Leaders of Sweden, Finland (2:45 p.m.)

US President Joe Biden will host Swedish Prime Minister Magdalena Andersson and Finnish Prime Minister Sauli Niinisto on Thursday to discuss the country's applications to join NATO as well as support for Ukraine, the White House said.

News of the visit comes after Turkish President Recep Tayyip Erdogan said he would oppose the applications over what he said was a willingness by the Nordic nations to host Kurdish militants. The US will "strongly support these applications when they are formally presented in Brussels," White House press secretary Karine Jean-Pierre said Monday.

Finnish Lawmakers Overwhelmingly Back NATO Entry (2:40 p.m.)

Finland's parliament signed off on plans to seek membership in NATO alongside Sweden, with 188 lawmakers in Helsinki backing the proposal to eight against.

The bill will be signed by the government as well as President Sauli Niinisto before the application can be delivered to NATO headquarters in Brussels. Sweden's application requires no vote in parliament and was signed by Foreign Minister Ann Linde earlier Tuesday. Policy makers have said they wish to submit their letters together.

Operation to Extract Mariupol Fighters Ongoing (2:15 p.m.)

Deputy Defense Minister Hanna Malyar told a televised briefing that she can't provide details and reiterated that it is impossible for Ukraine to unblock Mariupol using military force. The government knows how many people remain in the Azovstal works but won't disclose the number. "We hope this rescue operation ends well," she said.

Soldiers in Mariupol prevented Russia from moving 20,000 of its troops to capture Zaporizhzhia and encircle Ukrainian forces, Malyar said, adding that they "provided critically needed time to organize defense."

Ukraine-Russia Peace Talks Suspended (2 p.m.)

Negotiations are "paused" between Ukraine and Russia, said Mykhailo Podolyak, a member of Ukrainian team. He cited among the reasons the fact that "Russia doesn't understand that the war is not going according to its schedule or plan."

"We are not talking about the Ukrainian delegation exiting the negotiating process, we are talking only about expediency and specifics at this stage," he said. "Political talks will continue as soon as there are some specifics."

Russian Deputy Foreign Minister Andrey Rudenko said that talks were not currently going on in any form after Kyiv essentially withdrew from the process, according to Interfax.

Gasum Declines to Pay Gazprom in Rubles (1 p.m.)

Finland's Gasum Oy said it won't switch to ruble payments required by Russia's Gazprom, and it will take the companies' long-term gas supply contract into arbitration.

There's an increased risk gas flows from Russia into Finland might be halted, the company said. Separately, the EU said that gas companies would violate sanctions if they open bank accounts in rubles to buy Russian gas, but can still purchase the fuel if they follow the bloc's guidance.

Russian Missiles Strike Railway Near Poland (12:15 p.m.)

The area near the International Peacekeeping and Security Center at Yavoriv in the Lviv region of western Ukraine close to the Polish border came under Russian missile attack, regional governor Maksym Kozytskyi said on Telegram.

The Yavoriv training facility, which had been used regularly by NATO before the invasion, suffered massive damage in March when Russian missiles killed at least 35 people. Missile attacks in the Lviv region have intensified in the past two days after almost a week without air-raid alerts.

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