Tag Archives: RussiaUkraine

Russia-Ukraine: Russian warships heading to Black Sea for naval drills: LIVE UPDATES

Russia ‘has all the chips’ in Ukraine standoff: McFarland

Rep. Rosendale introduces bill to block military assistance to Ukraine until US border is secured

FIRST ON FOX: Rep. Matt Rosendale, R-Mont., on Tuesday introduced legislation that would block security and military assistance to Ukraine until the U.S. southern border is secured — the latest example of Republican concern that Ukraine’s border security is being prioritized over American border security.

The Secure America’s Border First Act would prohibit the expenditure or obligation of military and security assistance to Kyiv until there is “operation control” of the U.S.-Mexico border – where the border crisis is moving into its second year.

There is growing concern in Washington D.C. about the Russian buildup of forces at the Ukrainian border. U.S. combat forces have arrived in Poland this week amid fears that a Russian invasion of Ukraine could see Kyiv fall within days. 

But Rosendale’s bill seeks to bring attention back to the southern border, where there were 178,840 migrant apprehensions in December alone, capping a year that saw massive migrant numbers as well as drugs such as fentanyl pouring into the U.S.

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Russian warships heading to Black Sea for naval drills

Six Russian warships are currently heading to the Black Sea — which borders Ukraine
— for previously-planned naval drills, Reuters reports, citing the Russian Interfax news agency.

Moscow last month announced military exercises involving all of its fleets in the Pacific and Atlantic, according to Reuters.

The ships are expected to travel though Turkey’s straits today and tomorrow in order to enter the Black Sea, sources told the news agency.

Russia will pull troops from Belarus after exercises, Paris says

Russian President Vladimir Putin agreed during a meeting with French President Emmanuel Macron in Moscow that the troops stationed in Belarus will be pulled back once their war-game exercises are completed. 

Reuters reported that Putin did not mention the agreement after the marathon, seven-hour meeting with his French counterpart in the Kremlin on Monday. A French official told the news service about Moscow’s plan to pull back the troops. Macron’s diplomatic gamble to meet with Putin– who has clashed with Western countries– may have paid off.

Dmitry Peskov, a spokesman for Putin, told Tass, the Russian news agency, that there was never any talk of the soldiers staying in the country after the war games.

“No one has ever said that Russian troops will remain on the territory of Belarus, this has never been discussed,” Peskov said. “We are talking about allied exercises and, of course, it is understood that upon completion of these exercises, the troops will return to their permanent places of deployment.” 

The deployment raised concerns that Russia could be planning an Ukraine invasion from multiple fronts. – Edmund DeMarche

Biden warns Nord Stream 2 pipeline will not be operational if Russia invades Ukraine

The United States and Germany announced their “united approach” to deterring further Russian aggression against Ukraine, with President Biden warning that the Nord Stream 2 pipeline will not be operational if Russia follows through with an invasion of Ukraine.

Biden welcomed German Chancellor Olaf Sholz to the White House for his first official visit to Washington on Monday for what he described as a “very productive meeting” in which the two discussed their countries’ “shared values that shape how each of us approaches leadership.”

Both Biden and Scholz, during a joint press conference Monday, said they spent a significant amount of time discussing the situation between Russia and Ukraine, maintaining their preference to pursue a diplomatic approach to prevent an incursion.

Nikki Haley: Putin, dictators know Biden is ‘weakest president in history,’ so they want to act now

Former U.S. Ambassador to the United Nations Nikki Haley said Monday that Russian President Vladimir Putin and other autocrats know Joe Biden is “the weakest president in history” and therefore understand that if they want to take drastic actions like invading Ukraine, “this is the time to do it.”

Haley, a former South Carolina governor, told “Special Report” it was important for Biden to meet with Germany’s new left-leaning chancellor, Olaf Scholz – as Berlin is in a sensitive diplomatic position given its place in NATO and Western democracy while also being reliant on Russian energy.

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Russia-Ukraine Crisis and Macron News: Live Updates

Image
Credit…Ukrainian Presidency, via Associated Press

KYIV, Ukraine — The Kremlin on Tuesday rebuffed the idea that President Emanuel Macron of France and President Vladimir V. Putin of Russia had made meaningful progress toward defusing the Ukraine crisis in their high-stakes meeting in Moscow.

Statements by Russian leaders appeared to undercut French diplomatic authority, and even credibility, just as Mr. Macron arrived in Ukraine to continue his shuttle diplomacy, with 130,000 Russian troops just outside Ukraine and the White House warning that an attack on Ukraine could be imminent.

Even before Mr. Macron’s plane touched down in Kyiv, the Ukrainian capital, Dmitri S. Peskov, the Kremlin spokesman, rejected reports that the two presidents had reached any agreement to de-escalate, suggesting that it was the United States, not France, that had standing to negotiate such a deal.

“In the current situation, Moscow and Paris could not make a deal. France is an E.U. and NATO member,” he said, adding: “France is not leading NATO.”

He also took issue with news reports quoting French officials as saying that Mr. Macron had left Moscow with commitments that Russian troops would not stay in neighboring Belarus after the completion of military exercises this month, and that Russia would not conduct any new military maneuvers near Ukraine in the near future.

The deployment to Ukraine was always intended to be temporary, but Russia made no promise about when it would end, Mr. Peskov said. He declined to comment on the report about new maneuvers, but Russia said on Tuesday that elements of its navy had been dispatched to the Black Sea waters near Ukraine.





Border with Russian units

Transnistria, a

Russian-backed

breakaway region

of Moldova.

Russia invaded and

annexed the Crimean

Peninsula from

Ukraine in 2014.

Approximate line

separating Ukrainian and

Russian-backed forces near

two breakaway provinces.

Border with

Russian units

Russia annexed

the Crimean

Peninsula from

Ukraine in 2014.

Transnistria, a

Russian-backed

breakaway region

of Moldova.

Approximate line

separating Ukrainian

and Russian-backed

forces.


Mr. Putin and Mr. Macron held a five-hour, one-on-one meeting at the Kremlin on Monday night, and then a joint news conference that went well past midnight. Mr. Putin swung between ominous and something verging on optimistic, keeping his comments vague enough to keep the world guessing.

“A number of his ideas or proposals — which it is probably too early to speak about — I see as rather feasible for creating a foundation for our further steps,” he said of Mr. Macron. But he also warned of war with NATO if Ukraine joins the alliance, and did not rule out an invasion, though the Kremlin has insisted it has no plans for one.

In Kyiv on Tuesday to meet with Ukraine’s president, Volodymyr Zelensky, Mr. Macron said: “You must not underestimate the tension that surrounds the situation that we are living through, its unprecedented nature. I do not believe this crisis can be solved thanks to a few hours of discussions.”

Mr. Peskov said that Mr. Putin was prepared to keep negotiating over Russia’s security demands in Eastern Europe, but added: “So far, we don’t see and feel the readiness of our Western counterparts to take our concerns into account.” The United States and NATO have flatly rejected Russian demands to cease the bloc’s expansion into parts of Eastern Europe that Moscow considers part of its sphere of influence.

Mr. Macron emphasized that addressing Russia’s concerns about NATO and its presence in Eastern Europe was only one half of the diplomatic approach he was pursuing. The other, to address the continuing conflict between Ukraine and Russian-backed separatists in two breakaway eastern Ukrainian provinces through the so-called Normandy Format, showed more signs of promise. Negotiators from France, Germany, Ukraine and Russia are expected to meet again in Berlin this week to continue to work through disagreements around the terms of a 2015 cease-fire.

Mr. Zelensky said that he viewed the upcoming Berlin meeting positively, although he did not yet see an indication that Russia was willing to end its occupation of Crimea, the peninsula that Russia seized in a 2014 invasion, and pull Russian troops from the eastern Ukraine region known as Donbas. Ukraine has said that a Russian withdrawal is a prerequisite for any deal.

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US and EU ‘fully aligned’ in response to Russia-Ukraine tensions, says Blinken – live | US news

Donald Trump was never one for following protocol. In fact, he seemed to delight in flouting the very rules and regulations that guided his predecessors throughout their time in office. That applied to the retention of his presidential records.

According to a new report from the Washington Post, presidential records including “love letters” from Kim Jong-un had to be retrieved from Mar-a-Lago after Trump “improperly removed” them from the White House.

According to the Post, advisers to the former president “denied any nefarious intent and said the boxes contained mementos, gifts, letters from world leaders and other correspondence.

“The items included correspondence with North Korean leader Kim Jong-un, which Trump once described as ‘love letters’, as well as a letter left for his successor by Barack Obama, according to two people familiar with the contents.”

The Archives and a Trump spokesman did not comment. The records were returned to the National Archives in January, the Post said.

Trump’s treatment of White House records has been under the spotlight recently, as a House investigation continues into the January 6 insurrection he incited.

Trump went to the supreme court but failed to stop records relevant to January 6 being transferred to the House committee. Some records the panel obtained were reportedly ripped up and taped back together – according to Trump’s widely reported practice.

Lindsay Chervinski, a presidential historian, told the Post: “The only way that a president can really be held accountable long term is to preserve a record about who said what, who did what, what policies were encouraged or adopted, and that is such an important part of the long-term scope of accountability – beyond just elections and campaigns.”

Lack of access to documents about issues of national security could “pose a real concern if the next administration is flying blind without that information”, Chervinski said.

Trump’s correspondence with Kim, during attempts to negotiate with the North Korean leader, was the subject of widespread conjecture – and ridicule.

In September 2018, Trump told a rally in West Virginia: “We fell in love. No, really. He wrote me beautiful letters.”

The Washington Post reporter Bob Woodward obtained 25 such letters for his second book on the Trump White House, Rage. His publisher, Simon & Schuster, described “an extraordinary diplomatic minuet”.

On Monday, Stephanie Murphy, a Florida Democrat who sits on the 6 January committee, told the Post of Trump’s handling of records: “That they didn’t follow rules is not a shock. As for how this development relates to the committee’s work, we have different sources and methods for obtaining documents and information that we are seeking.”

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Russia-Ukraine Crisis Live Updates: Putin and Xi to Meet in China

Credit…Brendan Hoffman for The New York Times

The Kremlin denounced the United States on Thursday for deploying additional troops to Eastern Europe, saying the move was intended to “stir up tensions,” even as American officials and satellite imagery indicated that Russia had not slowed its large-scale buildup of military forces that threaten an invasion of Ukraine.

Pentagon officials said on Wednesday that Russia had amassed more troops and military hardware over the past 24 hours near the Ukrainian border and in neighboring Belarus, and that 3,000 additional American troops would be sent to help defend NATO allies from the threat of Russian aggression.

The Kremlin spokesman, Dmitri S. Peskov, accused the United States of “igniting tensions on the European continent,” and described the U.S. deployment to Poland and Romania as a threatening act “in the vicinity of our borders.”

“Clearly, Russian concerns are justified and understandable,” Mr. Peskov told reporters on Thursday. “All measures to ensure Russia’s security and interests are also understandable.”

The Biden administration said the troops would ensure the “robust defense of NATO territory” in light of Russia’s refusal to de-escalate tensions surrounding Ukraine, which have built to a fever pitch since Moscow began gathering forces on three sides of its smaller neighbor late last year.

“These are not permanent moves — they are precisely in response to the current security environment in light of this increasing threatening behavior by the Russian Federation,” said Ned Price, the State Department spokesman. Mr. Price emphasized that the United States would not send troops into Ukraine.





Border with Russian units

Transnistria, a

Russian-backed

breakaway region

of Moldova.

Russia invaded and

annexed the Crimean

Peninsula from

Ukraine in 2014.

Approximate line

separating Ukrainian and

Russian-backed forces near

two breakaway provinces.

Border with

Russian units

Russia annexed

the Crimean

Peninsula from

Ukraine in 2014.

Transnistria, a

Russian-backed

breakaway region

of Moldova.

Approximate line

separating Ukrainian

and Russian-backed

forces.


The recriminations on Wednesday illustrated that the threat of conflict remained high despite weeks of high-stakes diplomacy, as several European allies made overtures to President Vladimir V. Putin of Russia in an effort to cool tensions. President Emmanuel Macron of France was scheduled to speak with Mr. Putin later on Thursday, their fourth phone call in a week.

Mr. Putin signaled this week that he was open to a diplomatic resolution, but continued to portray the United States and its Western allies as aggressors and to demand a halt to NATO expansion in former Soviet states.

The United States and NATO have rejected Moscow’s main security demands, but indicated that there could be room for discussion on limited security issues, including arms-control measures and the placement of missiles in some Eastern European states that Moscow views as threatening.

Russian officials have said that Mr. Putin is still studying the American and NATO proposals.

At the same time, Russia has sought to show that it is not alone in its confrontation with the United States and its allies.

On Thursday, Russia’s defense minister, Sergei K. Shoigu, arrived in Belarus ahead of joint military exercises planned for this month. Moscow has massed a large amount of troops and hardware in Belarus — which shares a border with Ukraine and lies a little over 100 miles from the Ukrainian capital, Kyiv — for what it says are routine drills. But American officials have described the buildup as far larger than what has been seen in previous exercises.

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Russia-Ukraine tensions could prove a buying opportunity, strategists say

A view shows Russian BMP-3 infantry fighting vehicles during drills held by the armed forces of the Southern Military District at the Kadamovsky range in the Rostov region, Russia January 27, 2022.

Sergey Pivovarov | Reuters

LONDON — The recent ratcheting up of tensions between Russia and Ukraine could spillover into the European economy, but may also present a buying opportunity, strategists have suggested.

The massive build-up of Russian troops and military hardware around the country’s border with Ukraine has drawn ire from NATO and the West, though Moscow has repeatedly denied any intent to invade its neighbor.

In a press conference with U.K. Prime Minister Boris Johnson on Tuesday, Ukrainian President Volodymyr Zelenskyy warned that any conflict would extend beyond the two countries and become a “full-scale war.”

In a research note Monday, Goldman Sachs chief European economist Sven Jari Stehn suggested an escalation could spill into the European economy in the form of lower trade with the region, tighter financial conditions and lower gas supply.

Goldman Sachs does not expect a significant impact on trade given that the euro area’s export exposure to Russia and Ukraine is relatively small. Stehn also noted that “while tighter financial conditions could, in principle, have notable effects on European growth, euro area financial conditions have not tightened meaningfully during past episodes of Russia-Ukraine tensions.”

“A reason for the limited financial spillovers is that the Euro area has weak cross-border banking exposure to Russia and Ukraine,” he added.

However, the Wall Street giant believes that spillovers via the gas market are the most important possibility to watch.

“While the effect of higher wholesale gas prices on consumers would likely be mitigated by limited wholesale-to-retail passthrough and government support schemes, we find that reduced gas supply could cause significant (although temporary) production disruptions across Europe,” Stehn said.

Russia is Europe’s largest gas provider, typically supplying 30-40% of the continent’s gas demand via its pipelines, but the euro area has recently begun shifting consumption away from Russian pipes toward liquified natural gas (LNG). Meanwhile, Russian gas flowing through Ukraine has reduced significantly in recent years, Goldman strategists highlighted.

“However, there is a potential risk that any escalation could result in sanctions on Russia’s Nord Stream 2 (NS2) pipeline, which would potentially end up curtailing flows to Europe for an indefinite period, exacerbating the tightness in European gas markets that our commodity strategists expect through 2025,” Stehn said.

“Taken together, our analysis therefore suggests that the growth risks from ongoing Russia-Ukraine tensions look manageable unless the tensions escalate and lead to sharply tighter financial conditions and/or energy supply cuts across Europe,” Stehn said.

‘Buying opportunities’

The constructive medium-term outlook, barring any sudden escalations, was echoed last week by strategists at Oxford Economics, who said that the balance of probabilities implies a “buying opportunity” for affected regional and global assets.

However, they noted that there would be significant effects on asset prices and volatility in the near term if Russia was to make a further incursion beyond Crimea and its western border.

In this worst-case scenario, Oxford Economics believes the Russian ruble would weaken significantly, testing its 2015 high against the U.S. dollar of 83, while Russian stocks would also suffer.

“Euro zone equities would also see modest downside in this scenario as higher gas prices weigh on growth and squeeze profit margins. The Energy sector could provide relative shelter for investors wishing to hedge against this risk,” the strategists added.

However, in the base case scenario that the situation is resolved through diplomatic means, Oxford Economics expects markets to gradually calm down, Nord Stream 2 to get the green light, and asset prices to bounce back given Russia’s “strong fundamentals.”

In the event of a limited incursion, possibly in the form of air raids to destroy military infrastructure, the firm expects the U.S. to react with “biting” sanctions while the EU is consumed by internal divisions, and therefore deploys only mild sanctions such as a ban on electronic and semiconductor exports to Russia, or measures targeting Russian banks.

It would be this eventuality that sends the ruble to 83 against the dollar, at which point it could “easily be on a trajectory to 100, especially if there is a decisive breach,” the research note added.

In all three of these more moderate scenarios, the impact on stocks would likely be “relatively benign,” somewhat akin to the Crimean crisis in 2014, when Russian markets sold off in the short term, but a spillover to the euro zone was minimal and the bloc actually performed better than the global index for a six-month spell.

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Russia-Ukraine crisis: Kremlin accuses US of stoking ‘hysteria’ over Ukraine, as UN Security Council prepares to meet

Kremlin spokesman Dmitry Peskov told reporters that Washington and US outlets have played up fears of a Russian invasion.

“To our dismay, American media have lately been publishing a very large amount of unverified, distorted and deliberately deceitful information about what’s happening in Ukraine and around it,” Peskov said Monday.

Zelensky, however, restated his position that the threat from Russia remains “dangerous but ambiguous,” and it is not certain that an attack will take place, the official said.

On Monday, Peskov called on the US and its European allies “to take a more constructive approach,” and said the recent threat of sanctions from the United Kingdom is “extremely worrying.”

“It’s cause for serious concern for international financial structures and businesses,” Peskov said. “It’s an open attack on business.”

UK Foreign Secretary Liz Truss said this weekend that the country would introduce new legislation broadening sanctions and targeting specific individuals close to the Kremlin if Russia invades Ukraine.

The Biden administration has also identified several elite Russian government officials and business leaders that the US intends to sanction if Russia invades Ukraine, a senior administration official told CNN.

“In general, the Anglo-Saxons are widely escalating tensions on the European continent,” Peskov said.

Diplomatic efforts to de-escalate the situation are ongoing. Last week both the US and NATO presented Moscow with written responses aimed at deterring a Russian incursion of Ukraine. Russian Foreign Minister Sergey Lavrov said Thursday that the letters failed to address Moscow’s concerns over the eastward expansion of the military alliance.

On Monday, a senior US State Department official said that Russia responded in writing to the US’ written response.

Moscow’s response comes ahead of a planned phone conversation between US Secretary of State Antony Blinken and Russian Foreign Minister Sergey Lavrov on Tuesday.

Also on Tuesday, UK Prime Minister Boris Johnson will fly to Ukraine for talks, where he will announce £88 million (approximately $118 million) in new funding, according to a Downing Street statement.

United Nations Security Council meets

The United Nations Security Council (UNSC) met to discuss the crisis on Monday, and US Ambassador to the UN Linda Thomas-Greenfield said Russia’s actions could have widespread consequences.

“Russia’s aggression today not only threatens Ukraine. It not only threatens Europe. It threatens the international order this body is charged with upholding,” she said. “It is crucial that this Council address the risks that their aggressive and destabilizing behavior poses across the globe.”

Thomas-Greenfield emphasized the impact on those who are already suffering due to Russia’s invasion of eastern Ukraine, which has already killed more than 14,000 Ukrainians, she said.

“If Russia further invades Ukraine, none of us will be able to say we didn’t see it coming. And the consequences will be horrific, which is why this meeting is so important today,” she added.

“Nearly 3 million Ukrainians — half of whom are elderly people and children — need food, shelter, and life-saving assistance. Devastating as this situation is, it would pale in comparison to the humanitarian impact of the full-scale land invasion Russia is currently planning in Ukraine,” Thomas-Greenfield said.

Zhang Jun, China’s Ambassador to the United Nations, condemned the UNSC for holding an open meeting on the tensions, which Russia and China attempted to block, and backed Russia’s claim that it would not attack Ukraine.

Zhang also backed Russia’s “legitimate security concerns” over NATO’s open membership, and called the military alliance “the product of the Cold War.”

“We believe that the security of one country cannot be achieved at the expense of the security of other countries. Still less can regional security be guaranteed by the intensifying or even expanding military groups,” said Zhang.

“Today in the 21st century, all parties should completely abandon the Cold War mentality and come up with a balanced, effective and sustainable European security mechanism through negotiations.”

The US last week called for the meeting. It is the first venue at the United Nations where American and Russian officials both speak about what is happening.

The council comprises 15 members, each of whom has one vote. It is responsible “for the maintenance of international peace and security,” according to the UN website. Every UN member state has to comply with the council’s decisions.

On Sunday, Ukrainian Foreign Minister Dmytro Kuleba called on Russia to demonstrate its commitment to avoiding conflict.

“If Russian officials are serious when they say they don’t want a new war, Russia must continue diplomatic engagement and pull back military forces it amassed along Ukraine’s borders and in the temporarily occupied territories of Ukraine,” he wrote on Twitter. “Diplomacy is the only responsible way.”

Also on Sunday, Russian Foreign Minister Lavrov placed the blame on the eastward expansion of NATO.

Lavrov rejected the suggestion that NATO is a defensive organization.

“The line of defense has already come close to us,” Lavrov told Russia’s Channel One evening show on Sunday.

“It turns out each time that the line they are supposed to defend is moving further east. Now, it has already come close to Ukraine.”

CNN’s Katya Krebs, Arnaud Siad, Kylie Atwood, Luke McGee and Vasco Cotovio contributed to this report.

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Europe sidelined as U.S. tries to stop Russia-Ukraine war

U.S. army soldiers stand in formation during a joint military tactical training exercise Blowback 2016 with Bulgaria’s army at Novo Selo military ground on April 11, 2016.

NIKOLAY DOYCHINOV | AFP | Getty Images

Crisis talks aimed at averting a military confrontation between Russia and Ukraine appear to be faltering, as Western allies prepare for a possible conflict between the neighbors that could be “painful, violent and bloody.”

Western allies are preparing for some kind of military confrontation, with NATO putting more forces on standby and looking to reinforce Eastern Europe with more ships and fighter jets. The U.S. Department of Defense, meanwhile, said Monday that about 8,500 American troops are on heightened alert and awaiting orders to deploy to the region in the event that Russia does invade Ukraine.

The 8,500 troops are based in the U.S. and would be part of the NATO Response Force if that group is activated, the U.S. Department of Defense said on Monday.

The NATO Response Force is a 40,000-strong, multinational force made up of land, air, maritime and Special Operations Forces that NATO can deploy quickly, wherever needed. Its overarching purpose is “to provide a rapid military response to an emerging crisis,” NATO says. It has not yet been activated.

Pentagon Press Secretary John F. Kirby stated on Monday that the American forces being put on standby would be in addition to the significant combat-capable U.S. forces already based in Europe “to deter aggression and enhance the alliance’s ability to defend allies and defeat aggression if necessary.”

“Secretary [of Defense Lloyd] Austin has placed a range of units in the United States on a heightened preparedness to deploy, which increases our readiness to provide forces if NATO should activate the NRF or if other situations develop,” the press secretary said. 

If it is activated, Austin’s order would enable the U.S. to rapidly deploy additional brigade combat teams, along with units specializing in logistics, aviation, intelligence, surveillance, reconnaissance, transportation and more, Kirby noted. 

U.K. Prime Minister Boris Johnson, meanwhile, warned on Monday that a Russian invasion of Ukraine would be a “painful, violent and bloody, business” and a “disastrous step.”

“The intelligence is very clear that there are 60 Russian battle groups on the border of Ukraine. The plan for a lightning war that could take out Kyiv is one that everybody can see. We need to make it very clear to the Kremlin that that would be a disastrous step,” he told reporters.

Europe in the back seat

But as the U.S. and NATO officials plan for a potential conflict, Europe seems to have been conspicuously absent from many of the proceedings leading up to this point.

Many last-ditch negotiations aimed at preventing tensions between Russia and Ukraine from spilling into conflict have gone ahead without the bloc, leading Eurasia Group’s Emre Peker and Alex Brideau to believe that Europe has been “sidelined on its own turf.”

“The EU has failed to unequivocally rally behind a strategy to counter Russia’s increasingly aggressive posture against Ukraine, and will struggle to do so going forward. That will relegate Brussels to the sidelines as the U.S. and Russia discuss the future of Europe’s security architecture,” they noted on Monday.

Several European officials have complained that the EU has been sidelined during discussions on Ukraine between the U.S. and Russian officials; Ukraine has also complained that it has also been left out of talks in which it is the central focus and concern.

But part of the European Union’s difficulties when it comes to dealing with its bellicose neighbor Russia is that there is division within the bloc over how to deal with Moscow. Some countries take a more dovish stance toward Russia (such as France and Germany), whereas others, such as those in Eastern Europe or those that used to be part of the Soviet Union like the Baltics, are more hawkish.

In addition, the EU has an awkward reliance on Russia for a large chunk (around 40%) of its natural gas supplies, meaning that Russia can use this resource, particularly in winter, to its own advantage. Germany in particular is in a difficult situation because the Nord Stream 2 gas pipeline, which is yet to be approved, will transport gas directly into Germany and is designed to boost Russian gas supplies to the continent.

Another part of the problem is that there is no consensus in the EU over its future security landscape. Some countries, like France, are pushing for more strategic autonomy from the U.S. and NATO, while others (again those in Eastern Europe and the Baltics where NATO troops are deployed) are more comfortable with remaining under the aegis of the military alliance.

Europe won’t act ‘unless there’s an invasion’

“Barring invasion, Europe can’t and won’t mobilize,’ Eurasia Group’s analysts warned, predicting that the EU “will struggle to bridge internal divides between Russia hawks and doves over Ukraine tensions.”

“These dynamics will put yet another nail in the coffin of EU defense integration, and exacerbate the bloc’s split into pro-U.S. and more-Europe camps on security,” Peker and Brideau noted, effectively meaning that “U.S.-Russia talks will decide the future of Europe’s security architecture, which the EU will follow.”

Crisis talks between Western officials and Russia have been taking place for a number of weeks now, and follow high-profile discussions between U.S. President Joe Biden and his Russian counterpart Vladimir Putin.

Concerns over Russia’s behavior toward Ukraine grew amid reports that it had deployed around 100,000 troops and military hardware to various positions along its border with Ukraine. There have also been some intelligence reports that it is planning to invade.

Russia has denied these reports repeatedly.

In talks with the U.S. and NATO, Russia sought legal assurances that Ukraine will never be allowed to join NATO, as Putin seeks to stop any eastward expansion of the military organization, and pushes NATO to roll back deployments in Eastern Europe and the Baltics. So far, the U.S. and NATO have refused such demands, among others.

As Ukraine is not a member of NATO, the military alliance is not obliged to defend it, posing the question over just how far the U.S. and EU are willing to go to defend the country — one that aspires to both membership of the EU and NATO. Russia vehemently opposes these aspirations.

While the U.S., Europe and NATO have all talked tough when it comes to Russia, vowing “massive consequences” as U.S. State Secretary Antony Blinken said on Sunday, if Russia does invade, so far it looks like more sanctions on key Russian sectors would be the primary response deployed by the international community.

While the U.S. and U.K. have sent military equipment to Ukraine to help it defend itself, the response from EU nations has been more nuanced — Germany has refused to provide Ukraine with direct military support and reportedly blocked Estonia from sending German-made weapons to Ukraine.

NATO has itself been bolstering its military capabilities in Eastern Europe by putting forces on standby and deploying more ships and fighter jets to the area. Some European countries, including Spain, Denmark and the Netherlands, have announced their intention to send military hardware to bolster NATO defense capabilities.

Mariana, 52, a marketing researcher who for the past two years has been a volunteer in a Kyiv Territorial Defence unit, trains on a Saturday in a forest on January 22, 2022 in Kyiv, Ukraine.

Sean Gallup | Getty Images

The Kremlin accused the U.S. and its allies on Monday of escalating East-West tensions by announcing plans to boost NATO forces and the U.S.’ decision to evacuate the families of diplomats from its embassy in Ukraine.

Europe preparing for conflict

The EU said on Monday that it will continue to stand by Ukraine’s side and, despite preparations for conflict, diplomats in Europe continue to push for peace.

A flurry of diplomatic meetings has continued in the region this week, with the EU’s Foreign Affairs Council meeting on Monday and NATO Secretary General Jens Stoltenberg holding talks with foreign affairs ministers from Finland and Sweden.

On Monday afternoon, Biden held a video call with a number of European leaders and NATO chief Stoltenberg.

In a statement, the European Commission said the meeting “aimed at coordinating the collective response to the aggressive behaviour of Russia with regards to Ukraine. Leaders shared the assessment on the seriousness of the situation. They wished for diplomacy to succeed but are undertaking preparations for all eventualities.”

It added that it was “working on a wide array of sectoral and individual sanctions in the case of further military aggression by Russia against Ukraine,” as well as working with EU states and allies on preparedness, from energy to cyber-security.

On Monday, the EU announced a new financial aid package for Ukraine of 1.2 billion euros ($1.36 billion) in the form of an emergency financial assistance package and 120 million euros in additional grants. European Commission President Von der Leyen said the aid was aimed at helping Ukraine “address its financing needs due to the conflict,” adding: “Let me be clear once more: Ukraine is a free and sovereign country. It makes its own choices. The EU will continue to stand by its side.”

European leaders are also looking to try their hand at bringing Russia and Ukraine closer together this week, with political advisors from Russia, Ukraine, France and Germany due to hold “Normandy format” talks on eastern Ukraine in Paris on Tuesday or Wednesday.

Such talks have in the past produced the so-called ‘Minsk Agreements’ — peace deals to stop the ongoing lower-level conflict in eastern Ukraine — but the accords did not stop ongoing skirmishes and some fighting in the Donbass region between pro-Russian separatists and Ukrainian troops, and both sides have accused the other of flouting the agreements.

As such, there is not much expectation that the Normandy talks will be fruitful. Timothy Ash, senior emerging markets sovereign strategist at Bluebay Asset Management, said that “Normandy and Minsk processes are dead,” with Moscow showing what he said was “zero interest” in the peace talks continuing.

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Asian markets fall as global investors worry about Russia-Ukraine tensions and upcoming Fed plans

Markets in Asia Pacific fell sharply during morning trade, with Australia’s S&P/ASX 200 and Japan’s benchmark Nikkei (N225) sliding 2.9% and 1.9%, respectively. South Korea’s Kospi (KOSPI) dropped 2.3%.
Chinese markets were more muted, with the benchmark Shanghai Composite (SHCOMP) Index down 0.7%. Hong Kong’s Hang Seng Index (HSI) fell 1.6%.
The dip in Asian markets comes after Europe saw a substantial selloff on Monday over escalating fears about the possibility of a Russian invasion of Ukraine. France’s CAC 40 (CAC40) and Germany’s DAX (DAX) plunged as much as 4% and 3.8%, respectively, while London’s FTSE 100 (UKX) tumbled 2.6%.

Meanwhile, US stocks seesawed dramatically as investors tried to make sense of a multitude of issues, from geopolitical tensions to an upcoming Fed meeting to earnings season. The ongoing fear of inflation also persists.

Initially, stocks opened in the red on Monday, continuing a turbulent couple of days on Wall Street.

At the low point of the session, the market was on track for its worst day since October 2020, with the Dow down more than 1,000 points.

But with just minutes to go before close, the major indexes reversed course and turned green. The Dow (INDU) finished 0.3%, or 99 points, higher.
The S&P 500 (SPX), the broadest measure of the US equities market, also ended up 0.3%.
The Nasdaq Composite (COMP), which entered correction territory last week, closed up 0.6%.
However, US futures pointed down overnight on Tuesday, with Dow futures, S&P 500 futures, and Nasdaq futures tracking 0.8%, 1.2% and 1.7% lower, respectively.

A lot to digest

Investors have a lot on their plate this week.

Traders are anxiously watching the situation in Ukraine as fears mount that the country could be invaded by Russia.

The news that the United States and United Kingdom are withdrawing some staff from the local embassies has led to fears over an escalation of the situation, according to Michael Hewson, chief market analyst at CMC Markets.

“That’s really given European markets a really hard nudge lower,” he told CNN Business.

In the United States, “stocks tried to claw their way back from a massive Monday liquidation that stemmed from rising fears of aggressive Fed tightening and on fears of Russian invasion of Ukraine,” said Edward Moya, senior market analyst of the Americas at Oanda.

He noted in a report to clients on Monday that the mood had also spread to the oil market, as “uncertainty over coordinated efforts by Russia with Ukraine and China with Taiwan could lead to added risk aversion selling days in the coming weeks.”

Brent crude, the global benchmark, was up 0.7% on Tuesday to $86.89 a barrel.

Investors are also on guard over earnings season, which has moved on to Big Tech, including Microsoft (MSFT), IBM (IBM), Intel (INTC) and Apple (AAPL) this week.

Then there is the Fed meeting, concluding with Wednesday’s policy statement and subsequent press conference.

Uncertainty around the Fed’s plans just drove Wall Street to its worst week since the start of the pandemic.

— CNN Business’ Anneken Tappe and Julia Horowitz contributed to this report.

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Russia-Ukraine crisis could spark rise in Europe’s gas prices

Growing tensions between Russia and Ukraine have cast a shadow over energy markets, and the uncertainty could mean a prolonged period of high gas prices for Europe, analysts say.

“It’s a very tight gas market … and there’s no question that this sense of imminent crisis building with Russia and Ukraine is also hanging over the market, particularly since Russia does provide about 35% of Europe’s gas,” energy expert Dan Yergin told CNBC on Monday.

If the crisis escalates, gas prices in Europe – which soared to highs last year – could surge further, warned research firm Capital Economics in a note over the weekend.

William Jackson, chief emerging markets economist at Capital Economics pointed out that in addition to Europe’s reliance on Russia for gas, stock supplies are also low right now.

“Were sanctions to be placed on Russia’s energy exports or were Russia to use gas exports as a tool for leverage, European natural gas prices would probably soar,” he said.

Tensions between Russia and Ukraine have ratcheted up in recent months amid multiple reports that Russian troops have amassed at the border with Ukraine.

The development prompted speculation that Russia is preparing to invade the country and set off fears of a repeat of Moscow’s illegal annexation and occupation of Crimea in 2014. Moscow has repeatedly denied those allegations.

Ukrainian Territorial Defense Forces, the military reserve of the Ukrainian Armes Forces, holding wooden replicas of Kalashnikov rifles, take part in a military exercise near Kiev on December 25, 2021.

Sergei Supinsky | AFP | Getty Images

Talks aimed at defusing the crisis ended last week without any breakthrough.

U.S. representatives and NATO members emerged from several days of high-stakes discussions with top Russian officials with no resolution – but with warnings that the situation along the Ukraine border is in fact getting worse.

The imminent crisis has sparked talk the U.S. could impose sanctions on Russia to stop the Kremlin from invading Ukraine.

If that happens, according to Capital Economics, European gas prices will probably exceed the peak of 180 pounds per MWh seen late last year.

“And some states that are very heavily dependent on Russian gas, particularly in Eastern Europe, might be forced to ration power,” Jackson added.

A massive gas crunch in Europe in the third quarter last year led to European power prices spiraling to multi-year highs.

As it is, gas supplies from Russia were already lower than usual, Jefferies pointed out in a note on Sunday.

Imports of gas from Russia into Northwestern Europe from the August to December period were down by 38% compared to the same period in 2018, according to the U.S. investment bank.

Gas stockpiles in Europe are also lower than average – and are down by 21% as of Jan. 12, versus the five-year average, the firm said.

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“We expect the period of high natural gas prices to be protracted. Gas flows from Russia will remain low as we enter the 2021/22 heating season with record low stockpiles,” said Jefferies.

“There was this tendency when this crisis began late last year, to say ‘oh it’s a one-off,'” Yergin said, referring to the European gas crunch in 2021. “But if you look at the demand trends, level of investment, you could see this being recurrent.”

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Swedish commander: U.S. should add troops in Europe if Russia-Ukraine crisis deepens

The United States and its European allies have warned Putin that Russia will face severe sanctions and other penalties should he attempt another incursion, and that they will not waver in their military support for Ukraine.

President Joe Biden has indicated, however, that he won’t send American troops to directly fight in that ongoing war.

Bydén, whose country is not part of NATO but works closely with the military alliance, said America should send military reinforcements to Europe if the Russia-Ukraine crisis takes a turn for the worse.

He didn’t define what he meant by that, but responded affirmatively when asked if he’d like to see more U.S. troops in his neighborhood should Russia take the step of once again invading Ukraine.

“If the situation — I wouldn’t say ‘require’ because that’s the wrong word — but if the situation would worsen, I do believe it would be good to have a bigger footprint,” Bydén said.

Asked where the troops should go, the Swede said, “probably where they are today. Because you have bases in Europe. It’s not like you’re not there. It’s more it’s more like… reinforce what you have… More people, more capabilities.”

Sweden does not host any U.S. military bases.

Poland has long been eager to add more U.S. troops to the 5,500 it already hosts under an agreement struck during the Trump administration. Latvia also has appealed for a bigger U.S. presence, either on a rotational basis or permanent, and has suggested it would pay some of the costs to base them there.

Bydén declined to say how many more troops the United States should send. He also declined to give details about his meetings with U.S. officials and what each side pledged to the other.

Asked for comment, a Pentagon spokesperson said: “The Department of Defense and the Sweden Ministry of Defense enjoy long-standing cooperation as highlighted in the 2016 Bilateral Statement of Intent. We also enjoy strong trilateral cooperation with Sweden and Finland, both of which are Nordic NATO Enhanced Opportunity Partners.”

The Swedish military leader stressed that European countries should step up their own coordination and actions in the event of a Russian move against Ukraine. But when asked if Sweden would join NATO, he noted that was not in his country’s current government’s plans.

“If we show that we are able to take care of what we should do, the chance to get support from [the] U.S. to a greater extent, more, a bigger footprint in Europe, I think… the chance would be much better.”

“I don’t take it for granted,” he added. “But the support from your country, the relationship, it’s one of the most important parts also for European security.”

Bydén expressed confidence in the ongoing intelligence sharing between the United States and his country. He also said he believes the United States is capable of maintaining strong ties with Europe even as it infuses more resources toward dealing with an increasingly assertive China.

“It’s not either/or for us,” he said. “And I wouldn’t expect the U.S. just to withdraw from Europe because of China, but it’s obvious that you also need to put more effort in that part of the world. I think you can do both.”

He also noted that China and Russia appear to be deepening their military relationship. “We see more of it than before, and it’s a very good question how far they have come,” he said.

Paul McLeary contributed to this report.

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