Tuesday, July 5

Ukraine Latest: Merkel Warns on Putin; Kyiv Wary of Grain Talks


Former German Chancellor Angela Merkel made a return to the public arena, saying President Vladimir Putin made a “big mistake” by invading Ukraine and warning that isolating Russia isn’t possible over the long term.

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(Bloomberg) — Former German Chancellor Angela Merkel made a return to the public arena, saying President Vladimir Putin made a “big mistake” by invading Ukraine and warning that isolating Russia isn’t possible over the long term.

Russian Foreign Minister Sergei Lavrov is in Ankara for talks that may restart grain shipments out of Ukrainian ports on the Black Sea. But Kyiv is skeptical of the Kremlin’s intentions and seeking strong security guarantees that would allow it to export a key commodity.

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

Key Developments

(All times in CET)

  • Russia Is in Topsy-Turvy World Where Belarus Tops German Exports
  • Merkel Warns of Isolating Russia After Putin’s ‘Big Mistake’
  • US Seeks $4.3 Billion for Nuclear Fuel to Wean Off Russia Supply
  • Ukraine’s $27 Million War Bond Sale Is the Weakest on Record
  • The US Is Now Sending the Bulk of Its Export Gas to Europe

Fight for Sievierodonetsk Goes On (8:43 am)

Ukrainian troops held back the Russian assault in Sievierodonetsk, while fighting in the city and in the villages to the south of it continues, the General Staff of the Ukrainian Armed Forces said.

The city and its nearby area have seen heavy fighting in recent weeks as they are holding out against Russian forces. Russia said its military had occupied 97% of Luhansk, one of two regions comprising the Donbas that is the focus of Putin’s war.

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Merkel Warns of Isolating Russia (5:00 am)

Merkel said in an on-stage interview at a theater in central Berlin that “there’s no excuse for this brutal aggression.” While she has remained active behind the scenes, it was her first public appearance in front of a larger audience since leaving office in December.

Asked whether she had interacted with Putin, she dodged a direct response, saying she wouldn’t do anything that government didn’t ask her to do.

Read more: Merkel Warns of Isolating Russia After Putin’s ‘Big Mistake’

World Bank Approves $1.49 Billion for Ukraine (11:26 pm)

The new financing is part of a total support package of more than $4 billion that the World Bank is mobilizing.

Almost $2 billion of the funding has been disbursed, the World Bank said in a statement on its website. The money from the latest project will be used to pay for wages for government and social workers, it said.

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Russian Oil Output Set to Dive in 2023, EIA Says (11:25 pm)

The European Union’s ban on seaborne imports of Russian oil will lead to an 18% drop in the country’s fuel output by the end of next year, according to the Energy Information Administration.

Production of liquid fuels will drop to 9.3 million barrels a day in the fourth quarter of 2023 from 11.3 million in the first quarter of this year, the US government agency said in a monthly report.

Russia Returns 210 Bodies of Ukrainian soldiers (9:46 pm)

Mariupol was devastated under Russia’s siege, which lasted almost three months. Azovstal, owned by Ukraine’s richest businessman, was the city’s last holdout of Ukrainian troops, who surrendered at the end of May. It’s unclear how many Ukrainian defenders were killed there, and Russia said it’s holding more than 2,000 prisoners after supplies of weapons, food and medicine were cut off.

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Ukraine is working for the release of the prisoners, according to the intelligence statement.

Ukraine Says It Needs Strong Security Guarantees in Black Sea (7:10 pm)

A Russian attack that destroyed a warehouse at a grain terminal in southern Ukraine over the weekend shows the need for guarantees that would be provided “by supplying Ukraine with weapons to protect its shores from naval threats and by involving navies of third parties to patrol certain water areas in the Black Sea,” the Foreign Ministry said in an emailed statement.

The ministry said Ukraine values ​​Turkey’s efforts for an accord to permit food shipments but Ukraine’s interests must be protected.

Kuleba: No Deal on Unblocking Ports Without Ukraine (6 pm)

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Ukrainian Foreign Minister Dmytro Kuleba reiterated that no agreement has been reached among Kyiv, Ankara and Moscow on unblocking grain exports from the Black Sea.

Ukraine is in talks with the UN and other partners over corridors for grain exports. Russian Foreign Minister Lavrov arrived in Ankara Tuesday for talks with Turkish counterpart Mevlut Cavusoglu, Russian news agency TASS reported.

Zelenskiy: Ukraine Lacks Weapons for Counteroffensive (5:40 pm)

Ukrainian troops have slowed down their liberation of Russian-occupied territories as they lack fire-power and manpower, Zelenskiy said in an interview with the Financial Times, according to a transcript of his remarks provided by the president’s office.

Ukraine needs 10 times the amount of weapons and people to move forward with its counteroffensive, he said. Even so, Zelenskiy reiterated his country needs to defeat Russia on the battlefield. Having Russian troops pushed back to their Feb. 24 positions would only be a temporary victory as Ukraine has to regain control over all of its territories, he said.

“So far I don’t see a configuration which could force Russia to halt this war,” he said when asked about calls to negotiate a resolution.

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