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The economic consequences of the war in Ukraine

OVER THE past decade intensifying geopolitical risk has been a constant feature of world politics, yet the world economy and financial markets have shrugged it off. From the contest between China and America to the rise of populist rulers in Latin America and tensions in the Middle East, firms and investors have carried on regardless, judging that the economic consequences will be contained.

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Russia’s invasion of Ukraine is likely to break this pattern, because it will result in the isolation of the world’s 11th-largest economy and one of its largest commodity producers. The immediate global implications will be higher inflation, lower growth and some disruption to financial markets as deeper sanctions take hold. The longer-term fallout will be a further debilitation of the system of globalised supply chains and integrated financial markets that has dominated the world economy since the Soviet Union collapsed in 1991.

Start with the commodity shock. As well as being the dominant supplier of gas to Europe, Russia is one of the world’s largest oil producers and a key supplier of industrial metals such as nickel, aluminium and palladium. Both Russia and Ukraine are major wheat exporters, while Russia and Belarus (a Russian proxy) are big in potash, an input into fertilisers. The prices of these commodities have been rising this year and are now likely to rise further. Amid reports of explosions across Ukraine, the price of Brent oil breached $100 per barrel on the morning of February 24th and European gas prices rose by 30%.

The supply of commodities could be damaged in one of two ways. Their delivery might be disrupted if physical infrastructure such as pipelines or Black Sea ports are destroyed. Alternatively, deeper sanctions on Russia’s commodity complex could prevent Western customers from buying from it. Up until now both sides have been wary about weaponising the trade in energy and commodities, which continued throughout the cold war. Sanctions after the invasion of Crimea did not prevent BP, ExxonMobil or Shell from investing in Russia, while American penalties on Rusal, a Russian metals firm, in 2018 were short-lived. Germany’s decision to mothball the Nord Stream 2 gas pipeline on February 22nd was largely symbolic since it does not yet carry gas from Russia to the West.

Nonetheless the prospect now is of more Western restrictions on Russia’s natural-resources industry that curtail global supply. Russia may retaliate by deliberately creating bottlenecks that raise prices. America may lean on Saudi Arabia to increase oil production and prod its domestic shale firms to ramp up output.

The second shock relates to tech and the global financial system. While the trade in natural resources is an area of mutual dependency between the West and Russia, in finance and tech the balance of economic power is more one-sided. America is thus likely to put much tougher Huawei-style sanctions on Russian tech firms, limiting their access to cutting-edge semiconductors and software, and also blacklist Russia’s largest two banks, Sberbank and VTB, or seek to cut Russia off from the SWIFT messaging system that is used for cross-border bank transfers.

The tech measures will act as a drag on Russia’s growth over time and annoy its consumers. The banking restrictions will bite immediately, causing a funding crunch and impeding financial flows in and out of the country. Russia has sought to insulate its economy from precisely this: the share of its invoices denominated in dollars has slumped since its invasion of Crimea in 2014, and it has built up foreign-exchange reserves. Still, it will hurt. Russia will turn to China for its financial needs. Already trade between the two countries has been insulated from Western sanctions, with only 33% of payments from China to Russia now taking place in dollars, down from 97% in 2014.

Western banks appear to have fairly low exposure to Russia. Nonetheless, since the modern era of globalisation began in the 1990s no major economy has been cut off from the global financial system, and the risk of broader contagion across markets, while apparently low, cannot be ruled out.

What does all this mean for the global economy? Russia faces a serious but not fatal economic shock as its financial system is isolated. For the global economy the prospect is of higher inflation as natural-resource prices rise, intensifying the dilemma that central banks face, and a possible muting of corporate investment as jittery markets dampen confidence.

The longer-term impact will be to accelerate the division of the world into economic blocs. Russia will be forced to tilt east, relying more on trade and financial links with China. In the West more politicians and firms will ask if a key tenet of globalisation—that you should trade with everyone, not just your geopolitical allies—is still valid, not just for Russia but other autocracies. China will look at Western sanctions on Russia and conclude that it needs to intensify its campaign of self-sufficiency. The invasion of Ukraine might not cause a global economic crisis today but it will change how the world economy operates for decades to come.

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Our recent coverage of the Ukraine crisis can be found here

This article appeared in the Finance & economics section of the print edition under the headline “The economic fallout”

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‘Putin chose this war,’ Biden says as he announces new sanctions against Russia – US politics live | US news










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‘Putin chose this war,’ Biden says as he announces new sanctions against Russia










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Biden delivers national address on Russian invasion of Ukraine










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My colleague Leyland Cecco is talking to the huge Ukrainian diaspora community in Canada.


I have a knot in my stomach. I can only imagine what it’s like for people in Ukraine who are living with the shelling,” said Taras Kulish, a Toronto-based charity lawyer and member of the Ukrainian-Canadian Congress and Ukrainian Canadian Social Services. “We’re all concerned and there’s a definitely a shock factor in processing it.”

A number of organizations across Canada are quickly raising funds for relief projects. Kulish, who works closely with humanitarian organizations in Ukraine, says colleagues on the ground have described the surreal experience of shelling near their homes and the constant worry of loved ones:


I’ve been checking in with colleagues telling them we’re here. We’re praying for you. We’re looking to see what we can do in response. We’re trying to give them that knowledge that people are concerned about them and who love them. But you can’t imagine what it’s like. It’s almost unfathomable.”

He adds that since 2014 he has worked for trauma therapy clinics in the country’s eastern region. “We’ve been living this for the last seven years, so in one way, we’re terribly prepared for it.”

Cecco adds:

In addition to solidarity rallies across Canada condemning the invasion by Russia, the prairie province of Alberta announced it would donate C$1m to the Ukrainian Canadian Congress, a recognition of the large diaspora population in the region – and the long history Ukrainian residents have farming the area.

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Is Putin unwell?

My colleagues Julian Borger in Washington and Angelique Chrisafis in Paris have reported on new questions being raised about the mental status of the leader of a country with 6,000 nuclear warheads.

His decision to voluntarily start a land war, and the “sheer weirdness” of his recent public appearances, has worried leaders and Russia watchers in western capitals, they say:


They worry about a 70 year-old man whose tendency towards insularity has been amplified by his precautions against Covid, leaving him surrounded by an ever-shrinking coterie of fearful obedient courtiers. He appears increasingly uncoupled from the contemporary world, preferring to burrow deep into history and a personal quest for greatness.


The French president Emmanuel Macron is well-placed to analyse changes to Putin’s demeanour. Macron once drove a cooperative, if self-conscious, Putin round the gardens of the palace of Versailles in a tiny electric golf cart in the summer of 2017 and welcomed him to his holiday residence at a fortress on the Mediterranean coast the following summer, where Putin descended from a helicopter carrying a bunch of flowers and complemented the Macrons on their tans.


After Macron held five hours of talks with the Russian leader in Moscow at opposite ends of a 15-metre table, he told reporters on the return flight that “the tension was palpable”. This was not the same Putin he had last met at the Elysée palace in December 2019, Macron said. He was “more rigid, more isolated” and was off on an “ideological and security drift”.


Following Putin’s speech on Monday, an Elysée official made an unusually bold assessment that the speech was “paranoid”. Bernard Guetta, a member of the European parliament for Macron’s grouping, told France Inter radio on Thursday morning, after military invasion began: “I think this man is losing his sense of reality, to say it politely.” Asked by the interviewer if that meant he thought Putin had gone mad, he said “yes”.

Stay tuned for their full report.










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Bernie Sanders has responded to the recent praise of Vladimir Putin’s naked aggression toward Ukraine expressed by a former US president.

Bernie Sanders
(@SenSanders)

It is outrageous, if unsurprising, that Trump would praise Putin’s murderous invasion of Ukraine as an act of “genius.” It should concern us all that Putin is exactly the kind of leader Trump would like to be, and that so few Republicans have the courage to say this out loud.

February 24, 2022

The Democratic senator said:


It is outrageous, if unsurprising, that Trump would praise Putin’s murderous invasion of Ukraine as an act of “genius.” It should concern us all that Putin is exactly the kind of leader Trump would like to be, and that so few Republicans have the courage to say this out loud.

The former president in question had described the supposed “peacekeeping force” entering eastern Ukraine as “the strongest peace force I’ve ever seen”, adding: “There were more army tanks than I’ve ever seen. They’re gonna keep peace all right.”

He had also become confused on the Laura Ingraham show last night, appearing to believe that US troops were landing in Ukraine (rather than Russian ones) – and saying he thought that that news should be kept secret.

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Congressman Adam Schiff, the chairman of the House intelligence committee, said after a National Security Council briefing on Capitol Hill that he wanted to see Russia removed from the SWIFT international banking system in response to its invasion of Ukraine.

“Russia has begun an unprovoked, unjustified and brutal campaign against Ukraine,” Schiff said. “We must provide Ukraine with support to defend itself. We are also going to need to dramatically escalate the sanctions we place on Russia for this act of naked aggression.”

The chairman of the House intelligence committee said he believed the US needed to cut off Russia from the international banking system and its ability to access western capital, its ability to gather technology for weapons systems, and sanction the country’s oligarchs.

Schiff said the US needed to take additional steps to end Europe’s reliance on Russian oil and gas to prevent Putin from using energy as a geopolitical weapon. He added that Russia’s attack on Ukraine “ought to spell, at a minimum, the final death of Nord Stream 2.”

The unclassified NSC briefing that took place shortly before midday on Thursday indicated that Russia had the military capability to overwhelm Ukraine’s forces, Schiff told reporters, and that he anticipated Russia would very quickly overrun the country.

Schiff said that NSC officials were concerned about the possibility of a Russian cyber attack against not only Ukraine, but US and NATO allies. He added that he had not seen evidence of a cyber attack directed at the US, but noted it was still early in the conflict.

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NBC reports that Joe Biden has been given various options for American cyberattacks to disrupt Russia’s military action in Ukraine. According to the news network:


Two US intelligence officials, one Western intelligence official and another person briefed on the matter say no final decisions have been made, but they say U.S. intelligence and military cyber warriors are proposing the use of American cyber weapons on a scale never before contemplated. Among the options: Disrupting internet connectivity across Russia, shutting off electric power, and tampering with railroad switches to hamper Russia’s ability to re-supply its forces, three of the sources said.


“You could do everything from slow the trains down to have them fall off the tracks,” one person briefed on the matter said.

A cyberattack would be something of a turning point for the US, given its cyber efforts have prioritised counterterrorism – mainly information and intelligence gathering – though it did also attack the Iranian nuclear program a little over a decade ago.

Russia and China have used much more extensive cyberattacks against American infrastructure, however, and experts say the US has been quietly preparing to fight fire with fire.



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Biden imposes additional sanctions on Russia: ‘Putin chose this war’

“Putin is the aggressor. Putin chose this war. And now he and his country will bear the consequences,” Biden said, laying out a set of sanctions including export controls that will “impose severe cost on the Russian economy, both immediately and over time.”

Biden said the new sanctions also include four Russian banks and “corrupt billionaires” and their families who are close to the Kremlin.

And he announced a new deployment of ground and air forces to NATO’s eastern flank, even as he reiterated US troops would not engage in direct conflict in Ukraine.

“Our forces are not and will not be engaged in the conflict,” he said. “Our forces are not going to Europe to fight in Ukraine but defend our NATO allies and reassure those allies in the east.”

Biden addressed the nation from the White House East Room, his first appearance in public since the Russian attack commenced late Wednesday. In written statements, Biden deemed Russia’s assault a “premeditated war” and vowed to hold the country accountable.

The new sanctions were selected from a menu of options that includes restrictions on financial institutions, bans on technology exports and blocks targeting members of Putin’s inner circle.

Mindful of rising gas prices in the United States, Biden said he was working to limit the fallout the new sanctions would have on energy prices. He said the US was ready to release barrels from the Strategic Petroleum Reserve alongside its allies.

“I know this is hard and that Americans are already hurting,” he said. “I’ll do everything in my power to limit the pain the American people are feeling at the gas pump.”

The new sanctions, the latest US reprisals against Moscow this week, had been reserved as Biden hoped to maintain some leverage in dissuading Putin from a full-scale invasion. But so far, Western threats of economic punishment, as well as Biden’s strategy of revealing what the US knew about Putin’s buildup of forces to try to make the Russian leader second-guess himself, have proven ineffective.
After months of predictions and warnings, Russian forces began their attack on Ukraine Thursday morning local time, with reports of troops crossing the border to the north and south, explosions in multiple cities including the capital Kyiv, and warnings from Putin of future bloodshed unless Ukrainian forces lay down their arms.

Biden’s sanctions are now meant to punish Putin’s actions, rather than prevent them, by going after Russia’s economy, its military capabilities and those closest to the Russian President. How much they can alter Putin’s decision-making going forward, however, remains an open question.

Before he spoke, Biden conferred with the leaders from the Group of 7 industrialized nations about which sanctions they planned to impose, hoping to coordinate a response that projects unity among Western allies. US and European officials spoke by phone overnight into Thursday to coordinate their responses.

In a joint statement following the virtual meeting, the leaders of the G7 said Putin has “re-introduced war to the European continent.”

“He has put himself on the wrong side of history,” the leaders wrote.

On Thursday morning, EU Commission President Ursula von der Leyen promised to “weaken Russia’s economic base and its capacity to modernize” following the “barbaric attack” by Russia against Ukraine.

“We will freeze Russian assets in the European Union and stop the access of Russian banks to European financial markets,” she said.

Biden also convened a meeting of his National Security Council on Thursday morning to discuss the situation in Ukraine, a White House official said.

Biden’s top national security aides convened emergency meetings late Wednesday as Putin announced his plan to launch a “military operation” against Ukraine in a televised address. The speech was aired in Russia at the same time the United Nations Security Council was convening to condemn Moscow’s behavior, catching some delegates off-guard.

Huddled in the West Wing, Biden’s national security adviser Jake Sullivan and other top officials prepared a statement from Biden condemning Russia’s attack as “unprovoked and unjustified.”

“President Putin has chosen a premeditated war that will bring a catastrophic loss of life and human suffering,” Biden wrote in the statement, issued at 10:25 p.m. ET just as explosions began in Kyiv.

An hour later, Biden was on the phone with Ukrainian President Volodymyr Zelensky, who reached out to the White House as his country was coming under siege.

“He asked me to call on the leaders of the world to speak out clearly against President Putin’s flagrant aggression, and to stand with the people of Ukraine,” Biden said afterward in a statement. He said the US and its partners planned on “imposing severe sanctions on Russia.”

Biden announced a more limited package of sanctions on Monday following Putin’s initial decision to send troops into Ukraine following recognition of two pro-Russia regions in the Eastern part of the country. Those measures went after two state-owned financial institutions, three members of Putin’s inner circle and Russia’s sovereign debt.

This story and headline have been updated with additional developments Thursday.

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Biden addresses Russia’s “unprovoked and unjustified” attack on Ukraine

Washington — President Biden is set to address the American people on Thursday afternoon after Russia launched what Ukrainian officials say is a “full-scale invasion”, and is expected to announce additional sanctions the U.S. and Western allies will impose on Russia in response to its aggressive actions.

Mr. Biden condemned what he called an “unprovoked and unjustified attack” on Ukraine in a late-night statement Wednesday after Russia began launching strikes against Ukrainian cities, including the capital of Kyiv. The president accused Russian President Vladimir Putin of choosing “a premeditated war that will bring a catastrophic loss of life and human suffering.”

Ukraine’s State Border Guard Service said Russian forces started breaking through the country’s border in the Kyiv region, and Oleksiy Arestovich, an adviser to Ukrainian President Volodymyr Zelensky, said “dozens” of Ukrainian troops were killed amid Russia’s attacks. 

Mr. Biden’s remarks, set for 1:30 p.m. ET in the East Room, follow a meeting with Group of 7 leaders, many of which joined the U.S. in issuing widespread condemnation of Russia’s full-scale attack on Ukraine, as well as a meeting with his National Security Council to discuss the latest developments in the crisis.

In an effort to deter Russia from taking further action in Ukraine, the U.S. rolled out a first tranche of sanctions after Putin recognized as independent the Donetsk and Luhansk regions of eastern Ukraine. The initial round targeted a pair of Russian banks and five members of Russia’s elite with ties to Putin, as well as the company building the Nord Stream 2 pipeline and its corporate officers.

But the Biden administration and Western leaders have warned a further escalation by Putin against Russia’s neighbor would trigger more severe sanctions, and the president said in a statement late Wednesday that the U.S. and allies will impose “further consequences” on Russia for its attack against Ukraine.

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Russia and Ukraine News, Biden and Putin: Live Tracker

This time, the United States intelligence community got it right, unearthing a rival’s secret planning and accurately predicting and broadcasting Russia’s intentions to carry out a full-scale invasion of Ukraine.

For months, the Biden administration has been sharing — with allies and the public — intelligence about President Vladimir V. Putin’s intentions, taking away any element of surprise and stripping the Russian leader of his capacity to go to war on a false pretext.

But even with the threat of substantial sanctions and allied unity, it was not enough in the end to deter Mr. Putin from carrying out the broad assault that got underway early on Thursday.

But it improved Washington’s ability to bring the trans-Atlantic alliance into a unified front against Moscow and to prepare waves of sanctions and other steps to impose a cost on Russia. And after high-profile intelligence failures in Afghanistan, Iraq and other global crises over the past several decades, the accuracy of the intelligence and analysis about Mr. Putin gave the C.I.A. and the broader array of U.S. intelligence agencies new credibility at home and abroad.

The result has been a remarkable four months of diplomacy, deterrence and American-led information warfare, including a last-ditch effort to disrupt Mr. Putin’s strategy by plugging into the Russian military’s plans and then exposing them publicly. Unlike the withdrawal from Afghanistan, it was executed almost flawlessly. Even the Germans and other European nations highly dependent on Russian-supplied gas signed onto the playbook.

The U.S. used its intelligence in innovative ways as the crisis built. William J. Burns, the C.I.A. director, confronted the Russian government with its own war plans. Avril D. Haines, the director of national intelligence, shared secret intelligence with allied governments to build support for the American assessment. And the White House and State Department shared some declassified intelligence publicly to expose Mr. Putin’s plans for “false flag” operations and deny him the pretext he wanted to invade.

Credit…Evgeniy Maloletka/Associated Press

The intelligence disclosures may not be over now that the invasion has begun. The Biden administration has made clear it does not want to take on the job of publicly calling out Russian troop movements. But the United States is considering continuing its information releases, mulling various options to hold Russia accountable for actions it will take in Ukraine, according to people familiar with the discussion.

Those new efforts could involve countering Russian propaganda that they are guardians and liberators of the Ukrainian people, not an occupying force. They could also involve work to expose potential war crimes and try to give the lie to Russian claims that their war aims are limited.

Mr. Putin’s plan to topple the government in Kyiv was his goal from the beginning, American officials have said, and some officials are keen to show Russia is simply carrying out a plan crafted months ago.

“It’s not something you want to do forever or as a permanent feature of policy or it loses its novelty, but in extraordinary, life-or-death situations, it is justified,” said John E. McLaughlin, a former acting C.I.A. director. “I always found in confronting Russians with our knowledge of what they were doing, that they would inevitably deny it but that it threw them off balance to know that we knew. And I think it has rattled Putin this time.”

In the end it was not enough to stop Mr. Putin, though it is not clear what strategy, if any, he might have.

The American effort to reveal Mr. Putin’s plans to the world, has “been a distraction to him, it’s been somewhat annoying,” James Clapper, the former director of national intelligence, said Wednesday. But, he added, “It remains to be seen what difference it has made on his decision-making.”

Some of information the United States shared with allies, beginning with a trip to NATO by Ms. Haines in November, was initially greeted skeptically, according to Western officials. Many Europeans still remember the bad intelligence around the Iraq war.

But as the information provided grew and the Russian war plan played out as Ms. Haines had predicted, European officials shifted their view. The intelligence-sharing campaign ultimately succeeded in uniting Europe and America on a series of tough sanctions.

Credit…Alexey Nikolsky/Sputnik, via

Republicans have been critical of Mr. Biden for not being more aggressive in the military supplies it sent to Kyiv or acting earlier to impose stiff sentences on Russia to change Mr. Putin’s course of action.

It will take time to know if more and better weapons could have made a difference for the Ukrainian army’s resistance. But administration officials have said they have had to act judiciously not to escalate the situation and not allow Mr. Putin to use American military supplies as excuse to start the war.

More clearly, American sanctions against Mr. Putin go only so far. It is European sanctions against Russia and its billionaire class that really bite, and it took time, and intelligence, for Europe to come on board with a tough package of sanctions.

While the United States clearly has the some of the best, if not the best, intelligence collection in the world, it also had a reputation that remained tarnished, at home and abroad, by the 2003 Iraq invasion, when faulty information was publicly released to justify the war. While the intelligence community had long been pessimistic about the survival prospects for the U.S.-supported Afghan government, some in the administration criticized the spy agencies last year for not accurately predicting how quickly the country’s military forces would fold.

There is little doubt that reputation increased some of the skepticism of the assessment of Mr. Putin’s intentions, both by reporters questioning public officials for more evidence, and by allies.

The warnings this time were far different, the information released to try to prevent a war, not to start one. But releasing the information was nevertheless a risk. Had it proved wrong, the intelligence agencies would have been saddled with fresh doubts about their ability to collect and properly analyze intelligence about an adversaries’ capabilities and intentions. Their ability to credibly warn against future threats would have diminished.

Instead, the public got a rare glimpse of an intelligence success. It is usually the failures, or partial failures, like Iraq, the Sept. 11 terror attacks, the surveillance of domestic civil rights groups or the Bay of Pigs, that are publicly aired.

Credit…Lynsey Addario for The New York Times

But the failures do not mean America’s spy agencies do not have many successes, said Nicholas Dujmovic, a former C.I.A. historian who now teaches at the Catholic University of America.

“This is a rare case that intelligence successes are being made public, and the public should conclude, in my view, that this is rather the norm,” Dr. Dujmovic said. “They are getting a rare glimpse of the normal process and production of intelligence that normally they do not see.”

Most accusations of intelligence failures are failures to properly warn about an attack or to overstate a threat. And it is those warnings that this time proved prescient.

“The warning analysts have the hardest job in analysis because they are trying to figure out intentions — whether the attack will come, when it will come, how it will come,” Dr. Dujmovic said. “The best way to penetrate that fog is with a human source close to the decision maker, in this case, Putin — and it’s also the hardest kind of collection to acquire.”

The intelligence agencies succeeded in divining Mr. Putin’s intentions early on. And that was no easy feat. It is simply not publicly known how strong is America’s source network in Russia or how close those people are to Putin, but it is clear Mr. Putin shares his counsel with very few.

Monday’s televised meeting of Russia’s national security aides showed the foreign intelligence chief being berated by Mr. Putin for failing to endorse recognition of the breakaway enclaves in Eastern Ukraine. Juxtaposed with the months of American disclosures, the scene suggested that people atop America’s spy agencies, for once, may have understood Mr. Putin’s intentions better than his own intelligence officers.

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U.S., Allies Poised to Hit Russia With Broad Sanctions for Ukraine Invasion

The U.S. and its allies are poised to unveil further, sweeping sanctions against Russia after Moscow launched what President Biden called “an unprovoked and unjustified attack” on Ukraine, hoping a fresh tranche of penalties will punish Russia and persuade it to ratchet down hostilities.

European Commission President Ursula von der Leyen said Thursday morning that the European Union will place “massive and targeted” sanctions on Russia over its aggression in Ukraine, aiming at its financial sector, freezing Russia assets and banning the export of technology to Russia. Mr. Biden condemned the attack and said the U.S. and its allies and partners would impose “severe sanctions on Russia.” Leaders from the Group of Seven countries will meet Thursday.

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Russia-Ukraine: What to know as Russia attacks Ukraine

WARSAW, Poland (AP) — Russian troops launched a broad assault on Ukraine from three sides Thursday, an attack that brought explosions before dawn to the country’s capital, Kyiv, and other cities.

Ukraine’s leadership said at least 40 people had been killed so far in what it called a “full-scale war” targeting the country from the east, north and south. It said Russia’s intent was to destroy the state of Ukraine, a Western-looking democracy intent on moving out of Moscow’s orbit.

As civilians piled into trains and cars to flee, NATO and European leaders rushed to respond, if not directly in Ukraine, with strong financial sanctions against Russia and moves to strengthen their own borders.

Here are the things to know about the conflict over Ukraine and the security crisis in Eastern Europe:

PUTIN MAKES HIS MOVE

In a televised address as the attack began, Russian President Vladimir Putin said it was needed to protect civilians in eastern Ukraine, where Ukrainian forces and Russia-backed separatists have been fighting for almost eight years.

The U.S. had predicted Putin would falsely claim that the rebel-held regions were under attack to justify an invasion.

The Russian leader warned other countries that any attempt to interfere in Ukraine would “lead to consequences you have never seen in history” — a dark threat implying Russia was prepared to use its nuclear weapons.

Putin accused the U.S. and its allies of ignoring Russia’s demands to block Ukraine from ever joining NATO and offer Moscow security guarantees.

Putin said Russia does not intend to occupy Ukraine but plans to “demilitarize” it. Soon after his address, explosions were heard in the cities of Kyiv, Kharkiv and Odesa. Russia said it was attacking military targets.

He urged Ukrainian servicemen to “immediately put down arms and go home.”

Ukraine’s border guard agency said the Russian military attacked from neighboring Belarus, unleashing a barrage of artillery. The agency said Ukrainian border guards fired back. Russian troops had been in Belarus, a Moscow ally, for what Russian and Belarusian officials had described as joint military drills.

THE WEST REACTS QUICKLY

World leaders decried the start of an invasion that could cause massive casualties, topple Ukraine’s democratically elected government and threaten the post-Cold War balance.

NATO Secretary General Jens Stoltenberg called Russia’s attack “a brutal act of war” and said Moscow had shattered peace on the European continent.

U.S. President Joe Biden said Putin “has chosen a premeditated war that will bring a catastrophic loss of life and human suffering.”

In Lithuania, a small Baltic nation and NATO member that borders Russia’s Kaliningrad region to the southwest, Belarus to the east, Latvia to the north and Poland to the south. President Gitanas Nauseda signed a decree declaring a state of emergency. The country’s parliament was expected to approve the measure later in the day.

British Prime Minister Boris Johnson said Putin has “unleashed war in our European continent” and Britain “cannot and will not just look away.”

“Our mission is clear: diplomatically, politically, economically and eventually militarily, this hideous and barbaric venture of Vladimir Putin must end in failure,” Johnson said.

German Chancellor Olaf Scholz sharply condemned Russia’s attack, calling it “a terrible day for Ukraine and a dark day for Europe.”

Japanese Prime Minister Fumio Kishida said: “This Russian invasion stands to put at risk the basic principle of international order that forbids one-sided action of force in an attempt to change the status quo.”

UKRAINE’S PRESIDENT URGES CALM

Residents of Ukraine’s capital, Kyiv, could be heard shouting in the streets when the first explosions sounded. Cars nonetheless circulated in the streets during the early morning commute.

President Volodymyr Zelenskyy issued a video statement declaring martial law. He told Ukrainians that the United States was gathering international support to respond to Russia. He urged residents to remain calm and to stay at home.

Zelenskyy had repeatedly appealed to Putin in recent days to pursue a diplomatic path instead of taking military action. He urged world leaders Thursday to provide defense assistance and help protect Ukraine’s airspace from Russia

Mykhailo Podolyak, a presidential adviser, said fighting was taking place Thursday along practically the entire perimeter of the country’s border.

WORLD MARKETS FALL

World stock markets plunged and oil prices surged by nearly $6 per barrel after Putin launched Russian military action in Ukraine.

Market benchmarks tumbled in Europe and Asia and U.S. futures were sharply lower. Brent crude oil jumped to over $100 per barrel Thursday on unease about possible disruption of Russian supplies.

The ruble sank 7.5% to more than $87 to the U.S. dollar. Earlier, Wall Street’s benchmark S&P 500 index fell 1.8% to an eight-month low after the Kremlin said rebels in eastern Ukraine asked for military assistance.

PUTIN’S DECLARATION OVERTAKES EMERGENCY U.N. SECURITY COUNCIL SESSION

At an emergency meeting of the U.N. Security Council called by Ukraine that opened just before Putin’s announcement, U.N. Secretary-General Antonio Guterres told Putin: “Stop your troops from attacking Ukraine. Give peace a chance. Too many people have already died.”

Guterres later pleaded with Putin, “In the name of humanity, bring your troops back to Russia.”

WHEN WILL THE WEST IMPOSE MORE SANCTIONS?

Ukraine’s forces are no match for Moscow’s military might, so Kyiv is counting on other countries to hit Russia hard — with sanctions.

Biden on Wednesday allowed sanctions to move forward against the company that built the Russia-to-Germany Nord Stream 2 gas pipeline and against the company’s CEO.

Biden waived sanctions last year when the project was almost completed, in return for an agreement from Germany to take action against Russia if it used gas as a weapon or attacked Ukraine. Germany said Tuesday it was indefinitely suspending the pipeline.

Biden said more sanctions would be announced on Thursday.

Meanwhile, the European Union planned the “strongest, the harshest package” ever, to be considered at a summit on Thursday, according to EU foreign policy chief Josep Borrell.

“A major nuclear power has attacked a neighbor country and is threatening reprisals of any other states that may come to the rescue,” Borrell said.

“This is not only the greatest violation of international law, it’s a violation of the basic principles of human co-existence. It’s costing many lives with unknown consequences ahead of us. The European Union will respond in the strongest possible terms.”

WHAT SANCTIONS WERE UNDER U.S. CONSIDERATION IF RUSSIA INVADED?

The Biden administration had made clear it was holding tough financial penalties in reserve in case of just such a Russian invasion.

The U.S. hasn’t specified just what measures it will take now, although administration officials have made clear that all-out sanctions against Russia’s major banks are among the likely options. So are export limits that would deny Russia U.S. high tech for its industries and military.

Another tough measure under consideration would effectively shut Russia out of much of the global financial system.

___

CHINA’S SUPPORT FOR RUSSIA

China’s customs agency on Thursday approved imports of wheat from all regions of Russia, a move that could help to reduce the impact of possible Western sanctions.

China’s populous market is a growth area for other farm goods suppliers, but Beijing had barred imports until now from Russia’s main wheat-growing areas due to concern about possible fungus and other contamination.

Russia is one of the biggest wheat producers, but its exports would be vulnerable if its foreign markets block shipments in response to its attack on Ukraine.

Thursday’s announcement said Russia would “take all measures” to prevent contamination by wheat smut fungus and would suspend exports to China if it was found.

UKRAINE SEES MORE CYBERATTACKS

The websites of Ukraine’s defense, foreign and interior ministries were unreachable or painfully slow to load Thursday morning after a punishing wave of distributed-denial-of-service attacks as Russia struck at its neighbor.

In addition to DDoS attacks on Wednesday, cybersecurity researchers said unidentified attackers had infected hundreds of computers with destructive malware, some in neighboring Latvia and Lithuania.

Officials have long expected cyberattacks to precede and accompany any Russian military incursion.

___

Associated Press writers around the world contributed to this report.

___

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Live updates: Romania: Putin threatens peace of whole planet

The latest on the Russia-Ukraine crisis:

——

BUCHAREST, Romania — The president of Romania has condemned Russia’s “reprehensible” attack on Ukraine and said that Russian President Vladimir Putin “threatens the peace of the entire planet.”

Romania borders Ukraine and is a member of NATO and the European Union. Romanian President Klaus Iohannis said that Russia “chose the reprehensible and completely illegal path of massive armed violence against an independent and sovereign state.”

Iohannis said that Romania, a country of about 19.5 million people, is ready to deal with economic and humanitarian consequences that the conflict could generate.

He stressed that Romania will not be drawn into the military conflict in Ukraine and said Romanian authorities will take “absolutely all the necessary measures” to ensure the safety of the country’s citizens.

——

PRAGUE — Czech President Milos Zeman, who has been a leading pro-Russian voice among European Union leaders, has condemned Russia’s invasion of Ukraine as “an unprovoked act of aggression.”

Zeman said in an address to the nation that “Russia has committed a crime against peace.”

A week ago, Zeman said that warnings of an imminent Russian invasion of Ukraine were a failure by CIA. He said repeatedly he didn’t believe Russian wanted to attack Ukraine.

“I admit I was wrong,” Zeman said Thursday. “An irrational decision by the leadership of the Russian Federation will cause significant damages to the Russian state.”

He called for harder sanctions against Russia, declaring that “it’s necessary to isolate a lunatic and not just to defend ourselves by words but also by deeds.”

——

BRUSSELS — NATO’s secretary-general says Russia has launched war on Ukraine and shattered peace on the European continent.

Jens Stoltenberg called for a summit of NATO alliance leaders for Friday.

Stoltenberg said that “this is a deliberate, cold-blooded and long-planned invasion.” And he charged that “Russia is using force to try to rewrite history.”

Russia launched a wide-ranging attack on Ukraine earlier Thursday, hitting cities and bases with airstrikes or shelling. Ukraine’s government said Russian tanks and troops rolled across the border.

——

HELSINKI — NATO member Lithuania, which has borders with Russian ally Belarus and Russia’s exclave of Kaliningrad on the Baltic Sea, has declared a state of emergency effective early Thursday afternoon due to the situation in Ukraine.

The decree signed Thursday by Lithuanian President Gitanas Nauseda steps up border protection. It gives authorities, among other things, the right to check and inspect vehicles, persons and luggage in the border area.

Lithuania also borders fellow NATO and European Union members Poland and Latvia.

——

ANKARA, Turkey — Turkey has called on Russia to halt what it describes as “unfair and unlawful” actions in Ukraine.

A Turkish Foreign Ministry statement on Thursday said the Russian attacks were “unacceptable” and that Turkey “rejects” them.

“This attack, beyond destroying the Minsk agreements, is a grave violation of international law and poses a serious threat to the security of our region and of the world,” the ministry statement said, referring to deals that aimed to restore peace in eastern Ukraine.

The statement added that Turkey opposes moves that “change borders through the use of weapons.”

——

BERLIN — German Chancellor Olaf Scholz has condemned Russia’s attack on Ukraine, calling it a “dark day for Europe” and expressing his country’s “full solidarity with Kyiv.”

Scholz said in a statement at the chancellery in Berlin on Thursday that new sanctions to be imposed on Russia by Germany and its allies would show that “Putin has made a serious mistake with his war.”

Addressing NATO allies in eastern Europe, Scholz said Germany understood their worries in light of the latest developments and stands by its commitments within the alliance.

Scholz said he and French President Emmanuel Macron proposed soon holding an in-person meeting of the heads of government of NATO member states.

——

BRUSSELS — NATO has agreed to beef up its land, sea and air forces on its eastern flank near Ukraine and Russia after Russian President Vladimir Putin ordered a military offensive in Ukraine.

NATO ambassadors said in a statement after emergency talks Thursday that “we have increased the readiness of our forces to respond to all contingencies.”

While some of NATO’s 30 member countries are supplying arms, ammunition and other equipment to Ukraine, NATO as an organization is not. It will not launch any military action in support of Ukraine.

Countries closest to the conflict – Estonia, Latvia, Lithuania and Poland – are among those to have triggered rare consultations under Article 4 of NATO’s founding treaty, which can be launched when “the territorial integrity, political independence or security of any of the (NATO) parties is threatened.”

“We have decided, in line with our defensive planning to protect all allies, to take additional steps to further strengthen deterrence and defense across the Alliance,” the envoys said in a statement. “Our measures are and remain preventive, proportionate and non-escalatory.”

——

KYIV, Ukraine — An adviser to Ukraine’s president says that Russian forces forged 10-20 kilometers (6-12 miles) deep into the Chernihiv region of northern Ukraine and are regrouping to continue the offensive.

But Oleksiy Arestovich said Thursday that “Kyiv is under reliable protection” and “they will face tough battles.”

Arestovich said that fighting is going on 4-5 kilometers (2 ½-3 miles) north of Ukraine’s second-largest city of Kharkiv, in the country’s northeast. He said Ukrainian troops destroyed four Russian tanks there.

The adviser said that Russian troops that moved into Ukraine from Russian-annexed Crimea are trying to advance toward Melitopol and Kherson.

——

JERUSALEM— Israeli Foreign Minister Yair Lapid has condemned Russia’s attack on Ukraine as “a grave violation of the international order.”

Lapid told reporters on Thursday that Israel is prepared to send humanitarian aid to Ukraine and urged Israeli citizens to leave the country.

“Israel is a country well-versed in war. War is not the way to resolve conflicts,” he said, adding that there was still a chance for a negotiated solution.

——

BUCHAREST, Romania — Moldova’s president says the country’s Supreme Security Council has decided to ask parliament to introduce a state of emergency following Russia’s attack on neighbouring Ukraine.

President Maia Sandu said Thursday that Russia’s attack on Ukraine is a “flagrant violation of international norms.”

Sandu urged Moldovan citizens in Ukraine to return home. Moldova, a former Soviet republic and one of Europe’s poorest nations, has a population of around 3.5 million and is not a NATO member.

There are now concerns in Moldova that the neighboring conflict could trigger an influx of refugees. Sandu said that “at the border crossing points with Ukraine there is an increase in traffic flow.”

She added that “we will help people who need our support. At this moment, we are ready to accommodate tens of thousands of people.”

——

KYIV, Ukraine — An adviser to Ukraine’s president says about 40 people have been killed so far in the Russian attack on the country.

Oleksiy Arestovich, an adviser to President Volodymyr Zelenskyy said Thursday that several dozen people have been wounded.

He didn’t specify whether the casualties included civilians.

Zelenskyy said the Ukrainian authorities will hand weapons to all those willing to defend the country.

“The future of the Ukrainian people depends on every Ukrainian,” he said, urging all those who can defend the country to come to the Interior Ministry’s assembly facilities.

——

ANKARA, Turkey — Ukraine’s ambassador to Turkey has called on the NATO member country to close its airspace and to shut down the straits at the entrance of the Black Sea to Russian ships.

“We are calling for the airspace, Bosporus and Dardanelles straits to be closed,” Ambassador Vasyl Bodnar told reporters on Thursday. “We have conveyed our relevant demand to the Turkish side. At the same time, we want sanctions imposed on the Russian side.”

A 1936 convention gives Turkey control over the straits connecting the Aegean Sea to the Sea of Marmara and the Black Sea, and allows it to limit the passage of warships during wartime or if Turkey is threatened.

Turkish President Recep Tayyip Erdogan convened an emergency security meeting to discuss the Russian attack on Ukraine.

Turkey, which enjoys close relations with both Ukraine and Russia, had been pressing for a diplomatic solution to the tensions.

——

KYIV, Ukraine — Ukraine’s president says his country has cut diplomatic ties with Russia after it was attacked.

Ukrainian President Volodymyr Zelenskyy announced the decision to rupture ties with Moscow on Thursday after it launched a massive air and missile attack on its neighbor and Russian forces were seen rolling into Ukraine.

Ukrainian officials say the country’s military is fighting back and asked for Western defense assistance.

——

KYIV, Ukraine — A Ukrainian presidential adviser says that Russian forces have launched an attack on Ukraine from the north, east and south. The adviser, Mykhailo Podolyak, said “the Ukrainian military is fighting hard.”

Podolyak said Thursday that “our army is fighting back inflicting significant losses to the enemy.” He said that there have been civilian casualties, but didn’t give details.

He said that “Ukraine now needs a greater and very specific support from the world — military-technical, financial as well as tough sanctions against Russia,” he said.

Another adviser to President Volodymyr Zelenskyy said Russia has targeted air bases and various other military infrastructure.

——

BEIJING — China’s customs agency on Thursday approved imports of wheat from all regions of Russia, a move that could help to reduce the impact of possible Western sanctions imposed over Moscow’s attack on Ukraine.

The two governments announced an agreement Feb. 8 for China to import Russian wheat and barley after Russian President Vladimir became the highest-profile foreign guest to attend the Beijing Winter Olympics.

China’s populous market is a growth area for other farm goods suppliers, but Beijing had barred imports until now from Russia’s main wheat-growing areas due to concern about possible fungus and other contamination.

Russia is one of the biggest wheat producers but its exports would be vulnerable if its foreign markets block shipments in response to its attack on Ukraine.

Thursday’s announcement said Russia would “take all measures” to prevent contamination by wheat smut fungus and would suspend exports to China if it was found.

——

BERLIN — Germany’s foreign minister says that “we woke up in a different world today.”

Foreign Minister Annalena Baerbock said in a televised statement that “after months of preparing lies and propaganda, President Putin decided today to let his threats be followed with terrible deeds.”

Baerbock said that “the Russian government is breaking the most elementary rules of the international order in front of the eyes of the world.”

Baerbock said German diplomats remaining in Kyiv would leave the capital. A decision would be made whether the embassy could resume its work from Lviv.

——

MOSCOW — Security camera footage shows a line of Russian military vehicles crossing into Ukraine from Russian-annexed Crimea.

Russian troops launched a wide-ranging attack on Ukraine on Thursday. President Vladimir Putin cast aside international condemnation and sanctions and warned other countries that any attempt to interfere would lead to “consequences you have never seen.”

——

KYIV, Ukraine — Ukraine’s President Volodymyr Zelenskyy is urging global leaders to provide defense assistance to Ukraine and help protect its airspace from the “aggressor.”

Zelenskyy said Thursday that Russian President Vladimir Putin “has unleased a war with Ukraine and the entire democratic world.” He added that the Russian leader “wants to destroy our state, everything that we have built.”

He praised the nation’s soldiers, hailing their courage and urged civilians not to panic.

“We are starting the creation of an anti-Putin coalition,” he said. “I have already urged global leaders to slam Putin with all possible sanctions, offer large-scale defense support and close the airspace over Ukraine for the aggressor.”

“Together we must save Ukraine, save the democratic world, and we will do it,” Zelenskyy said.

——

BEIJING — World stock markets have plunged and oil prices surged by nearly $6 per barrel after President Vladimir Putin launched Russian military action in Ukraine.

Market benchmarks tumbled in Europe and Asia and U.S. futures were sharply lower. Brent crude oil jumped to over $100 per barrel Thursday on unease about possible disruption of Russian supplies.

The ruble sank 7.5% to more than $87 to the U.S. dollar. Earlier, Wall Street’s benchmark S&P 500 index fell 1.8% to an eight-month low after the Kremlin said rebels in eastern Ukraine asked for military assistance.

Investors already were uneasy about the possible impact of the Federal Reserve’s plans to try to cool inflation.

——

BEIJING — China’s Foreign Ministry is repeating calls for talks to resolve the worsening crisis in Ukraine, while refusing to criticize Russia’s actions and accusing the U.S. and its allies of worsening the crisis.

Spokesperson Hua Chunying told reporters Thursday that “the Ukraine issue is complex in its historical background … what we are seeing today is the interplay of complex factors.”

Hua said China still hopes “that the parties concerned will not shut the door to peace and engage instead in dialogue and consultation and prevent the situation from further escalating,”

Although China has not endorsed Russian President Vladimir Putin’s declaration of independence for Ukraine’s separatist areas or his decision to send Russian forces there, Hua said China “called on parties to respect others’ legitimate security concerns.”

Hua said that “all parties should work for peace instead of escalating the tension or hyping up the possibility of war” — repeating the language China has consistently used to criticize the West in the crisis.

Hua asked: “Those parties who were busy condemning others; what have they done? Have they persuaded others?”

Hua did not describe Russia’s actions as an invasion or directly refer to the movement of Russian forces into Ukraine.

——

PARIS — French President Emmanuel Macron, who had labored until the last minute for a diplomatic solution, says that “France firmly condemns Russia’s decision to wage war” and is promising support for Ukraine.

Macron said Thursday that “Russia must end its military operations immediately.” He spoke by phone to Ukrainian President Volodymyr Zelenskyy, who demanded “united European support” for Ukraine, according to a statement from the French presidency.

Macron said France is “working with its partners and allies to end the war.”

——

BUCHAREST, Romania — Romania’s defense ministry says that two F-16 aircraft from the Romanian military on a NATO air policing mission intercepted a Ukrainian Air Force plane that had entered Romanian airspace, and escorted it to an airbase in Bacau.

The ministry wrote that the Romanian planes “strictly applied national procedures and international rules applicable in such situations, through the interception and visual identification of the aircraft entering the Romanian airspace.”

The ministry said that the Ukrainian military pilot made himself available to Romanian authorities on Thursday morning.

——

BRUSSELS — The European Union says it is planning the “strongest, the harshest package” of sanctions it has ever considered at an emergency summit Thursday, as the Russian military attacked Ukraine.

European Commission President Ursula von der Leyen said that “the target is the stability in Europe and the whole of the international peace order, and we will hold President (Vladimir) Putin accountable for that.”

“We will present a package of massive and targeted sanctions to European leaders for approval,” she said.

EU foreign policy chief Josep Borrell called it the “strongest, the harshest package” ever considered.

——

LONDON — British Prime Minister Boris Johnson says Western allies will not stand by as Russia attacks Ukraine.

In an early morning call, Johnson told Ukrainian President Volodymyr Zelenskyy that he was appalled by events in Ukraine, according to a statement released by the prime minister’s office.

“The Prime Minister said the West would not stand by as President Putin waged his campaign against the Ukrainian people,” Johnson’s office said in the statement.

Johnson added that Ukraine was in the thoughts of everyone in the U.K. “during this dark time.”

___

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Russia invades Ukraine in Europe’s ‘darkest hours’ since WWII

  • Putin authorises military operation in east
  • Explosions heard in Kyiv and across Ukraine
  • Kyiv declares martial law, urges ‘all possible’ sanctions
  • U.N. Security Council to discuss resolution on Thursday

KYIV/OUTSIDE MAIUPOL, Ukraine, Feb 24 (Reuters) – Russian forces invaded Ukraine by land, air and sea on Thursday, confirming the worst fears of the West with the biggest attack by one state against another in Europe since World War Two.

Russian missiles rained down on Ukrainian cities. Ukraine reported columns of troops pouring across its borders into the eastern Chernihiv, Kharkiv and Luhansk regions, and landing by sea at the port cities of Odessa and Mariupol in the south.

Explosions could be heard before dawn in the capital Kyiv. Gunfire rattled, sirens blared across the city and the highway out became choked with traffic as residents tried to flee.

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Ukraine’s President Volodymyr Zelenskiy said Kremlin leader Vladimir Putin’s aim was to destroy his state.

“Putin has just launched a full-scale invasion of Ukraine. Peaceful Ukrainian cities are under strikes,” Ukrainian Foreign Minister Dmytro Kuleba said on Twitter.

“This is a war of aggression. Ukraine will defend itself and will win. The world can and must stop Putin. The time to act is now.”

EU foreign affairs chief Josep Borrell said: “These are among the darkest hours of Europe since the Second World War.”

A resident of Ukraine’s second largest city Kharkiv, the closest big city to the Russian border, said windows in apartment blocks were shaking from constant blasts.

Outside Mariupol, close to the frontline held by Russian-backed separatists, smoke billowed from a fire in a forest targetted by Russian bombing.

A Ukrainian armoured column headed along the road, with soldiers seated atop turrets smiling and flashing victory signs to passing cars which honked their horns in support.

In the nearby towns of Mangush and Berdyansk, people queued for cash and gasoline. Civilians from Mariupol were seen packing bags.

“We are going into hiding,” said a middle-aged woman in a grey sweater.

Initial reports of casualties were sporadic and unconfirmed. Ukraine reported at least eight people killed by Russian shelling and three border guards killed in the southern Kherson region.

Ukraine’s military said it had destroyed four Russian tanks on a road near Kharkiv, killed 50 troops near a town in Luhansk region and downed six Russian warplanes in the east.

Russia denied reports that its aircraft or armoured vehicles had been destroyed. Russian-backed separatists claimed to have downed two Ukrainian planes.

In a televised declaration of war in the early hours, Putin said he had ordered “a special military operation” to protect people, including Russian citizens, subjected to “genocide” in Ukraine, an accusation the West calls absurd propaganda.

“And for this we will strive for the demilitarisation and denazification of Ukraine,” Putin said. “Russia cannot feel safe, develop, and exist with a constant threat emanating from the territory of modern Ukraine…All responsibility for bloodshed will be on the conscience of the ruling regime in Ukraine.” read more

U.S. President Joe Biden said his prayers were with the people of Ukraine “as they suffer an unprovoked and unjustified attack”. He promised tough sanctions in response, and said he would swiftly consult with other world leaders. read more

The prospect of war and sanctions disrupting energy and commodities markets posed an immediate threat to a global economy barely emerging from the pandemic. Stocks and bond yields plunged, while the dollar and gold rocketed higher. Brent oil surged past $100/barrel for the first time since 2014.

“There are no buyers here for risk, and there are a lot of sellers out there, so this market is getting hit very hard,” said Chris Weston, head of research at broker Pepperstone.

Ukraine, a democratic country of 44 million people with more than 1,000 years of history, is Europe’s biggest country by area after Russia itself. It voted overwhelmingly for independence after the fall of the Soviet Union, and aims to join NATO and the European Union, aspirations that infuriate Moscow.

Putin, who denied for months that he was planning an invasion, has called Ukraine an artificial creation carved from Russia by its enemies, a characterisation Ukrainians call shocking and false.

Three hours after Putin gave his order, Russia’s defence ministry said it had taken out military infrastructure at Ukrainian air bases and degraded its air defences.

Earlier, Ukrainian media reported that military command centres in Kyiv and Kharkiv in the northeast had been struck by missiles, while Russian troops had landed in the southern port cities of Odessa and Mariupol. A Reuters witness later heard three loud blasts in Mariupol.

Russia announced it was shutting all shipping in the Azov Sea. Russia controls the strait leading into the sea where Ukraine has ports including Mariupol. Ukraine appealed to Turkey to bar Russian ships from the straits connecting the Black Sea to the Mediterranean.

‘WE’RE AFRAID’

Queues of people waited to withdraw money and buy supplies of food and water in Kyiv. Traffic was jammed going west out of the city of three million people, towards the distant Polish border. Western countries have been preparing for the likelihood of hundreds of thousands of Ukrainians fleeing an assault.

By mid-morning, traffic was at a standstill on the four-lane main road to the western city of Lviv. Cars stretched back for dozens of kilometres (miles), Reuters witnesses said.

Oxana, stuck in a traffic jam with her three-year-old daughter on the backseat, said she was fleeing “because a war has started. Putin has attacked us.”

“We’re afraid of bombardments,” she said. “Tell them: ‘you can’t do this.’ This is so scary.”

Biden, who has ruled out putting U.S. troops on the ground in Ukraine, said Putin had chosen a premeditated war that would bring a catastrophic loss of life and human suffering.

“Russia alone is responsible for the death and destruction this attack will bring, and the United States and its Allies and partners will respond in a united and decisive way,” said Biden, who spoke to Zelenskiy by telephone.

French President Emmanuel Macron condemned Russia’s action while NATO Secretary-General Jens Stoltenberg said NATO allies would meet to tackle the consequences of Russia’s “reckless and unprovoked attack”. British Prime Minister Boris Johnson said Putin had chosen “the path of bloodshed and destruction”.

China, which signed a friendship treaty with Russia three weeks ago, reiterated a call for all parties to exercise restraint and rejected a description of Russia’s action as an invasion.

Ukraine closed its airspace to civilian flights citing a high risk to safety, while Europe’s aviation regulator warned against the hazards to flying in bordering areas of Russia and Belarus. read more

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Reporting by Reuters bureaus; Writing by Stephen Coates, Robert Birsel and Peter Graff, Editing by Angus MacSwan

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Stocks dive, oil jumps above $100 as Russia invades Ukraine

A trader works at the Frankfurt stock exchange in Frankfurt, Germany, February 22, 2022. REUTERS/Timm Reichert

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  • Oil breaches $100 as Russia launches invasion of Ukraine
  • European stocks drop 2.75%, Rouble hits record low
  • MSCI Asia ex-Japan down more than 3%, lowest since Nov. 2020
  • Treasuries, Bunds, dollar rally
  • Gold highest since Jan. 2021

LONDON, Feb 24 (Reuters) – Oil prices broke above $100 a barrel for the first time since 2014, stock markets slumped and the rouble hit a record low on Thursday after Russian President Vladimir Putin launched an invasion of Ukraine. read more

Markets displayed all the predictable reactions. Europe’s , main stock markets opened 2.5%-4% lower and benchmark government bonds, the dollar, Swiss franc, Japanese yen and gold all rallied in a move to safety.

Putin said he had authorised what he called a special military operation and the Ukraine government accused Moscow of launching a full-scale invasion. read more

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The United States and its allies will impose “severe sanctions” on Russia after the attacks, U.S. President Joe Biden said. Europe’s leaders said they would freeze assets and shut Russian banks out of its financial markets. read more

Russian and Ukraine markets went in freefall.

The rouble weakened nearly 7% to an unprecedented 86.98 per dollar and there were 10% plus falls on the Moscow stock exchange when it opened after an initial suspension. The Russian central bank then ordered a ban on short selling and over-the-counter markets until further notice.

The equities rout had started with a 2.6% dive for pan-Asian indexes (.MIAP00000PUS). Europe’s STOXX 600 index (.STOXX) then fell 2.75% – hitting its lowest since May 2021 and 10% below a January record high.

The German DAX (.GDAXI) fell 3.7%, bearing the brunt of the sell-off due to heavy reliance on Russian energy supplies and the amounts its companies sell to Russia. The surge in oil prices helped limit losses on the UK’s commodity-heavy FTSE 100 (.FTSE), although it still slumped 2.3% and futures markets pointed to similar falls for Wall Street later.

S&P 500 e-minis were down 2% and Nasdaq futures were 2.8% lower, which if it materialises, would confirm the tech-focused index it is in a so-called ‘bear’ market.

“In the past when you have had geopolitical flareups you tend to have a very volatile periods on markets then normalisation, but it’s difficult to assess when we will get that,” said LGIM portfolio manager Justin Onuekwusi.

The dollar index was up 0.5% , in the currency markets. Assets have seen a sharp increase in volatility over the deepening crisis, with the Cboe Volatility Index, known as Wall Street’s fear gauge, up more than 55% over the past nine days. (.VIX)

Brent crude futures , jumped more than 3.5% to shoot past $100 a barrel for the first time since September 2014.

West Texas Intermediate leapt 4.6% to $96.22 per barrel, its highest since August 2014, while gold jumped more than 1.7% to hit its highest level since early January 2021.

That dive for safety also saw yields on Germany’s AAA-rated government bonds drop eight basis points to 1.139%, the lowest in three weeks. . the benchmark U.S. 10-year yield was down sharply too, going as low as 1.86% from its U.S. close of 1.977% before edging back up to 1.90%.

Investors have also been grappling with the prospect of imminent policy tightening by the U.S. Federal Reserve aimed at combating surging inflation. The question now is whether the conflict will give central bankers a reason to delay those moves or whether the further rise in energy priced could spur them on.

While expectations of an aggressive 50-basis-point hike at the Fed’s March meeting have eased, Fed funds futures continue to point to at least six rate hikes this year. FEDWATCH

“Markets are now more adequately pricing in the risk of something horrific happening. That combined with the uncertainty is a horrible environment to be in. No one wants risk exposure when that’s floating around,” said Rob Carnell, head of Asia Pacific research at ING.

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Additional reporting by Sujata Rao in London and Andrew Galbraith in Shanghai, Editing by Angus MacSwan

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